What Entrepreneurs Should Know Before Starting Their First Business

2.3K

Starting a business is not your average stroll in the park. It takes tenacity to move from a business idea to an active business. Things will not always go as planned and it is crucial for one to think on their feet. Especially now in this digital age, we find ourselves in – the turn of events and developments is very rapid. What used to work for other entrepreneurs then might not work for you today.

An approach that was applicable this week can be swept away overnight by a sudden development. Societal dynamics along with technological advancements are making it difficult to operate with constants. This and more are some of the reasons why many people hesitate to start their own businesses. Fear of the landscape and even of the unknown get the better of most people. Herein we discuss some of the things you ought to know before starting a business.

These Things Take Time – Patience Is Needed

This might sound like conventional wisdom but you must appreciate this intimately. Incubating on a business idea and working on it till it is an actionable business takes time. You would think that when you reach that point then the waiting game is over, well, not as yet. Putting it together, finding a suitable spot, getting the word out, landing your first customers, and so on – this is not instant, it is a gradual process.

At that point, you will still have to wait even longer for the business to start realizing profits. For instance, a business can start realizing profits after at least 6 months or 1 year of operation; even more. In short, you must prime yourself to be very patient because setting up a business takes time. If you hurry you will make a lot of mistakes which can cost you dearly. Patience is a virtue.

Regulatory Frameworks – Be Compliant

Starting a business entails adhering to various regulatory frameworks. I, for one, have always encouraged people to register their business from the onset. This saves you a lot of trouble ahead and even sourcing funding is made easier because being registered makes you a credible entity.

You must also appreciate that rules of engagement differ from locality to locality. Wherever applicable, it is vital that you engage institutions, local authorities or any regulatory bodies pertaining to your line of business. Do not also forget about revenue authorities – you might dodge them for a while but once they catch up with you, you might regret it. Overall, know that you will or might be required to comply with certain regulations; do not be found wanting.

Financial Aspects Of Running A Business Are Paramount

The overwhelming majority of people whose businesses fail to attribute their failure to cash flow problems. Cash is King. You must know that running a business demands you to be frugal and very smart in handling finances. It all starts from the beginning when you put your business idea on paper.

By the way, whether you will seek funding or not, we encourage you to draft a business plan. In drafting that business plan you will get a good appreciation of the financial aspects as you work on the cash flow projections. Visit www.startupbizglobal.com for business plan templates.

Did you know that there several businesses that operate at a loss without even realizing it because of poor financial management? You must be prepared to learn about business accounting and financial management. Even when potential investors are looking to fund a business they are most concerned with the financials.

That shows you how important they are. Effective financial management also means you must have effective record keeping. Data collection and management are so central to this. You have to acquaint yourself with financial terms e.g. equity, gross margins, net profit, turnover and so on. You must also learn to write and also read financial statements – it is imperative.

Sales And Marketing Dynamics

Before starting a business you must know that business is all about realizing sales. Never mind how well your business idea or how fancy your premises are, if cannot sell it is all pointless. People tend to lose sight of what really matters and direct their energies to not so important things. The major focus of your efforts when getting into business is realizing sales. Do not be hung up on optics and visually impressing people – sell! This means you must have a solid sales and marketing framework.

What you must know in this day and age is that digital marketing is running the show. The most successful businesses nowadays know how to leverage on the internet and social media to land customers and to drive sales. If these are domains you are not well-versed with we would encourage you to undergo short course training programs on areas such as social media management, digital marketing, content creation, just to mention a few.

Running A Business Requires Adept People Management

One of the most complex management endeavours on earth is people management. Any initiative you can ever think of entails human interactions. If you are not conversant with the demands of people management then starting let alone running a business can be a tall order for you. Running a business involves various human engagements on various levels. Those interactions are internal and external to the business e.g. human resource management and customer relationship management.

You might not really appreciate it from this standpoint but managing all those interactions boils down to managing people. How you deal with employees might not necessarily be the same with customers. It will also differ from other people such as business partners, suppliers, investors and so on. Getting into business is riddled with dealing with all kinds of people from all kinds of backgrounds. You must know how to manage these people effectively in a way that keeps the integrity and potency of the business intact.

These are some of the things that entrepreneurs should know before starting their businesses. Raising capital is also something that gets into the fold. You must be prepared to raise funds through various legitimate means.