Do you often think you have a good idea, but worry about the risks?
Ideas are easy, getting started is always the hard part.
There is no doubt that starting a business can be fun, hard work and risky, while it takes up most of your time and soaks up all your money.
We all know that there are many things that can send a business broke. The best way to avoid it is to first understand what could send you particular business broke, the risk factors, and then to do something about it as quickly as possible.
Starting an enterprise is about avoiding disaster and creating abundance. It is not about creating a life of luxury for everybody, it’s about creating a life of fulfilment, fun and unlimited possibilities. An enterprise, whether it be a business or a non-profit organisation, can give you the opportunity to follow your dreams.
I had often read about, how successful people and companies have suddenly failed. When conditions change, it is often the most successful people and organisations who are the slowest to adapt to the changes and challenges around them.
The fresh thinking, creativity and leadership that led to their initial success are often replaced by a rigid devotion to the status quo; they refuse to change things that have worked well for them in the past. They become ill-equipped to handle situations beyond their knowledge and control.
What kind of person makes a successful business person?
Successful small business people have certain common characteristics. While this short checklist cannot predict success, it can give you an idea of whether you will have a head start or a handicap with which to work.
- Do I have a strong desire to be your own boss?
- Do I have ambitions?
- Do the decisions I make regularly turn out well?
- Do I have an ability to conceptualise and visualise?
- Do I possess the high level of energy?
- Do I have enough business experience?
- Do I see myself as a negative person and to risk adverse?
- Can I keep on keeping on through tough times?
While not every successful business owner starts with a “yes” answer to all these questions, three or four “no” responses and undecided answers should make you think twice about going into business by yourself. But, don’t be discouraged, if you are prepared to seek advice, training and support, and enlist the help of a skilled business advisor.
“It is much easier for someone to tell you how to start a business when they have never started one, or worked in a small business. Be on your guard “. Peter Sergeant
Compare your skills and expertise with others who are successful in similar businesses. Can you duplicate and surpass the capability of other successful businesses? What unique skills can you provide to ensure you can handle the competition?
Review, information and studies that identify the requirements to operate the type and size of enterprise you are planning. From that information, start your business planning and start seeking out people who can help you. If you are one of those people who always leans on their own understanding, you could be in for a rough time.
As a modern business, you will need to have a quality website, be involved with social media, looking to virtual operations to keep costs down and content marketing to get your messages out. Often, the quality of your content marketing efforts is going to be the only thing that really differentiates you.
Ensure you have enough working capital to sustain you throughout the start-up phase. Make sure you include a wage for yourself as you will need running money in order to put everything together.
During your budgeting process ensure that your sales will have sufficient margin to sustain the enterprise. You don’t have to be the cheapest in town, so strive to be the best and charge a fair price for your efforts.
Don’t try to grow too fast, before you learn the ropes. As you move forward keep the cash traps under control (debtors and inventory). Many businesses have gone broke selling more than their working capital can keep up with.
Take time to find the right Business Model to achieve your objectives. Technology has opened up an infinite array of models to choose from. The important thing is that you want you model to involve automation of basic processes and to work well all day every day, and be scalable as required for the future.
An important aspect of starting a new enterprise is to look at the lifestyle you want and tailor your new enterprise to it, not the other way around. There are many examples of ‘lifestyle business’ you can take advantage of.
This information has been put together to help you gather your thoughts about starting a new enterprise. Obviously, there is a lot in starting a new enterprise and this can be found in our business kit, “Startup Easily and Well”.
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Imagine for a minute, that you are sitting with your family and close friends watching the headline story on the TV news, “Today one of Australia’s largest agricultural machinery dealers closes its doors”. Your worst nightmare exposed to the world.
For the first 20 years of my business career failure was an unfamiliar word to me. I had no personal experiences associated with going broke.
I always believed that most advances in business and individual achievements have been made by people who would not accept that something could not be done. I was about to be sorely tested.
Our business had been going for thirteen years and the way we operated our business or our ‘business model’ had served us well in generating income to grow and deliver improving customer services and benefits.
The business model had been adjusted many times over the years in order to cope with droughts and other adversities and improve our sustainability.
There’s always an element of risk in business and even though we had our ‘tsunami warning system’ (long-range weather forecasts), all was to no avail, in what we were about to face. At the ripe old age of 38 failure hit me with a vengeance.
In 1977 the worst drought in over 100 years started in Central and Western NSW, it was the epicentre and so was our business. The stress and pressure began and by 1979 the business was no longer fun anymore, farmers had started to curtail their activities and stopped spending. The machinery and farm supply businesses are the ones affected first during any drought and the farmers were not even buying spare parts or services, they just sat to wait it out.
Suddenly I felt I was ‘owned’ by the business and working for everyone else. My vision had turned into my worst nightmare. I missed my family, I missed my freedom, I became very tired and I longed for a holiday. It was beyond my control, far worse than anything I had experienced previously. After all those years in the machinery business and growing up on the farm, I was never prepared for the severity of this drought.
It is important to understand that it doesn’t matter how well you prepare, how much experience you have under your belt, there will be catastrophes that can wipe you out. Mind you, you should never start up anything without good preparation.
Having given you the dark side of starting an enterprise, let me assure you it can still be the best thing you will ever do. It’s far better to wear out than rust out in a job you are not happy in. It is the ups and downs in life that keep it interesting.