Getting Started In Business

For a number of months now, I have shared ideas, inspiration, and opinions on running a business, business planning, business tendering, procurement, and the supply chain as a whole. Some of the readers have contacted me for feedback and assistance. I have come to the realisation that there is a part of the basic foundation to entrepreneurship development I haven’t shared about, and it is how to get started in business. With all resources in place, especially capital, or with opportunities for raising capital available, the next stage would be to decide how to get started. Let me introduce you to a few of the many ways to get started in business.

Building a new business
This is the most common way of venturing into business. Registering your company, deciding on the type of company, what you will be doing, and who you will be working with You will be starting from zero. Everything will be done by you, from choosing the name of the business to the legal status of the business, the objectives, and whether you will be the sole owner or co-owner of the company. Starting everything by yourself gives you the freedom of choice in many aspects of the business.

Starting a completely new business means building customers from scratch. You will need to work extra hard to penetrate the market. Some businesses are easy to start from “scratch”. If you understand your target market and the industry you will be venturing into, you can hit the ground running. Some people register and start businesses when they already have customers. Some identify opportunities, such as tenders, and then prepare to start knowing what they will be doing. Besides that, starting a new business requires you to build the clientele, and to build the clientele, you need to work hard on gaining people’s trust in you. People will buy into you before they buy into your business.

It usually takes a few years for the business to grow from zero, depending on many factors. Many new startup businesses fail in their second to fifth year due to a lack of sustainability and mismanagement. Basically, starting a new business comes with many challenges but also offers many opportunities. You invest what you can afford, and it takes time to scale up the business. Lack of experience and expertise can affect your business. The chances of success and growth will be determined by how you manage the business and how the industry and economy are performing.

Buying an existing business
The other option for getting started in business is buying an existing one. Some people are selling their businesses for various reasons. Chance of career goals, repatriation, financial challenges, and family issues are some of the reasons people sell their businesses. When buying an existing business, you need to know what you are buying. Doing a business evaluation and checking the financial statements of the business are important before you make your final decision. You also need to know the tax affairs or status of that business’s clientele and make projections for the next 3 years or so to ascertain its viability. You don’t want to spend $100,000 on buying a business that will not even generate that amount in sales in 3 years and that has no assets. If it’s a retail business, the evaluation will take into account the stock in trade and the stock of all assets. The financial statements should provide you with information such as who the company owes and how much, as well as who owes the company and how much. You may be in trouble with suppliers and other creditors, and you will still be liable to pay them. If the company owes creditors, the price of the business sale should take that into account. Either the seller will pay all creditors upon selling the business to you or you will take over the creditors and debtors alike.

The advantage of buying an existing business with good standing is that there will be some built-in profits and ready sales. Yours will be to maintain and grow the business. You will still need to do a lot of work before buying the business. The reason why the seller is selling the business can help you make a decision. Some people sell businesses when they see that they are no longer profitable and want to cash out something before they lose it all. So, you need to be careful when buying losses. Obviously, there are downsides to buying an existing business, and you need to look at them.

Buying a franchise
Buying a franchise is one of the most common ways to start a business. A franchise comes with lucrative opportunities and advantages, but you need to be prepared to pay for them upfront. You have to pay the franchise fees before you start paying for the supplies. The fees will cover training, setup, equipment, marketing, uniforms, and business support, among other things. This is ideal if you have good funding. Profits are generally guaranteed. It is important to decide the type of business you want to venture into and then choose the franchise carefully.

Buying shares in another business
Maybe coming up with ideas for a new business is difficult, and you don’t want to be involved in the hassle. Buying shares in an existing business can be ideal. This is different from buying the existing business outright. You will be joining something and running the business together. Exiting business owners sell shares for various reasons. Many do so to raise capital for the business if they are facing cash flow challenges or need assistance in the affairs of the business. I have people who have sold me shares not because they wanted the capital in the form of cash but because they wanted my expertise. Someone might need your experience and expertise either for a certain period of time or for as long as the business exists.

When buying shares in an exiting private company, due diligence is still needed. You don’t want to find yourself in a mess that you have no idea about. Business evaluation, assessment of financial reports and records, as well as forecasting business growth, will help you get a picture of what you are getting yourself into. If the business has good standing, goodwill, and good profits, then you might be hitting the ground running.