How to start your own business?
Do you want to start your own business?
Andy asked: “can I start a business after forty?” My answer: “Please do not!” Did I give good advice?
Was my advice good?
Starting a business has nothing to do with age. If you are concerned about your age, you should invest in a wheelchair. You will have more value for your money.
Many people start a new career after retirement. Did you notice the difference between pensioners sitting in their lazy boy chairs watching television all day and the active oldies joining the gym?
The saying is, you are as old as you think you are. If you think you are ancient at the age of forty, you do not have the energy to start a business. Thinking of your age rather than to start the company proves you do not have the passion. You will fail.
Starting a business requires a strong desire. You do not care what others think or say. When you ask advice about whether you should or should not, you are not a leader. You will need somebody to make the decisions for your business.
You must be courageous, bold, daring, and capable of making decisions. Can you take responsibility for failure?
Did you ever fail a test? What was your reaction? Did you cry? Maybe you sulked two weeks after the failure. Or were you cross at yourself for not doing the job correctly. Now you must do it all over again. And you did!
If you felt miserable, you care about what other people think of you. Do not start a business. If you were cross at yourself, you expect better of yourself and are willing to learn. Start a business.
What does it take to start a business?
To start a successful business, you need to do excellent planning. Make sure you think of everything you will need. Here I can say you will slip up. You will not be able to think of everything. Therefore, it is crucial to prepare for the unknown.
Do you have enough money the business will need for the set-up? Do you have enough cash to carry you through for at least three to six months? You will be lucky to make a profit within the first year.
Do your research well. A flourishing business in one area will go bankrupt in another. Is there a need for your product? How will you advertise?
Are you prepared to work through the night? Are you willing to work like a maniac for twenty or thirty years and then go bankrupt because of unforeseen circumstances beyond your control? When you are sixty-three years old, you realize you have just lost your pension you saved up over so many years!
Are you prepared to work with people who do not care about your business? What will you do if your best employee resigns to start his own business in opposition to you?
What do you notice?
Did you notice everything seems to be negative? If you think it is wrong to be negative, you must reconsider. When planning a business, you need to be exceptionally pessimistic. Why?
Why do you have to be pessimistic before starting a business?
Believing you are extraordinary and can beat any challenge will not make you a success. There is nothing to prepare you for the challenges of starting a new business. In the end, you will have to give what it takes. Therefore, you stand a better chance if you prepare for a possible problem before it happens.
Rather be safe than sorry.
The six generic processes in management
Business consist of six generic processes.
1.) Planning.
2.) organization.
3.) financing.
4.) personnel.
5.) procedure.
6.) and marketing.
Each process is a department in your business made up of the other five.
Planning
Planning the business is the how and where. What will the product be? Will you manufacture, in which case you need to know who will supply the ingredients. Are you selling products from other manufacturers? Which products and from which suppliers? Where will the business be situated?
During your groundwork, think of
- The product
- The name
- Sole proprietor or corporation
You cannot start a business if you do not know the product. When thinking of a product, make sure there is a need for such a product. To open a coffee shop in a shopping center with ten other coffee shops are not the best choice. To start a coffee shop in a poor community where people cannot afford the cupcake with the coffee can also be dangerous.
Decide on a name. The name of your business is crucial. Let’s say you choose the name Johnnie’s quality products. Ten years later-on you decide to sell your business to James. Will James change the name of the company to ‘James’s best products’? Shakespeare’s Juliet asked what is in a name? In the business world, the name of the business is relevant. Compare My Special Coffee Shop to Coffee Delicacies.
Will your business be a sole proprietor or a company?
There are advantages and disadvantages for both. Even when you trade as a corporation, you will still be liable for any overdraft on your bank account. You sign security for the loan. With a cash business such as a coffee shop, it may be better to start a sole owner. You should not have creditors to whom you own thousands of dollars. With a business where you buy from suppliers where you pay the account a month or two later, it may be safer to start a company.
Design a business plan covering every possible scenario which you can give to your Bank.
Organization
The structure of the organization. Who will be the leader, and who will be the workers? What will the function of the individual be? Decide who your accountant will be. Draw an organizational structure outlining the rules, roles, and responsibilities of each position.
Financing
From where will all the money come?
Firstly, you will have to find a Bank believing in you. That is where your business plan must be impressive and realistic.
Before you start your company, you must be sure you have a backup.
It takes three months for a start-up to go bankrupt. The first month seems exceptionally profitable because you do not have expenses. You paid the rent in advance. You also paid for the products, and you have the money to pay salaries or wages.
The second month starts with the profit of the first month and therefore you have enough money to pay all the expenses.
The third month you realize you used the profit for private living expenses. At the end of the third month, you use the available funds. In the fourth month, you cannot even pay the overdraft.
You are busted!
Make sure you have enough backup to last at least six months. It will be better if you have enough for a year.
If you are married, it is a good idea that your spouse keeps on working with a regular income. Your spouse can join you when you are sure you make a profit.
Personnel
Who will work for you? Will they be permanent, contractors, or part-time? Where will you find the workers? Will you advertise, or will you use an agency. What will the remuneration be? Will you make use of specific age groups?
Be sure you have the best employees possible.
Marketing
As it is crucial to market your company effectively, you must use all possibilities. Do not waste your money on outdated ways. Putting pamphlets in post boxes do not have the same result as twenty years ago.
Find a qualified copywriter to help you with your website or blog. Sometimes it is worth spending money to make money.
Procedure
What is the procedure your company will follow?
1.) How will you start?
2.) How will the company grow?
3.) What steps will you follow to reach your end goal?
This process looks at the previous procedures. Define each step to reach the ultimate result.
Good luck with your new company!
