Starting a Business

Time to time, I get to meet people who have the intent to start their own business. They come to me with some of the following popular questions:

What do you think is a good business to do currently?
Shall I leave the company I am working with and start a similar business?
I do wish to someday start a business, but I am not sure what business to do.
I like to start a café business because I see it being very profitable.
My boss started this business from scratch ten years ago. I think I have enough experience now to start a similar business. What do you think I should do?
I want to start slowly an independent business, but I am afraid I cannot focus on two things at a time. I am scared I will not succeed or have nothing to fall back to.
I saved some money and want to start a business. I don’t know when I should resign from my current job.
I am not sure, but I want to start a small business. Can you suggest me some nice and attractive company names?
I have seen many suppliers get good contracts with the company I am working with. I want to resign and start a trading business to be a supplier too. It is very profitable.
I will be receiving my voluntary separation scheme (VSS) next month. I don’t know what to do. I am too old to start from scratch or look for another job. I want to do some sort of business with the money I am receiving.

For all the above questions, if you read between the lines, you can see that the answers are already there. It says that you are not sure and confident of yourself. That is not the way to start a business. Just because you see that some companies are getting big contracts, you are thinking that they are yielding high profits too. This may not be true at all.

To start a business, you need to be courageous. Only then you can gain confidence in what you want to do. You brave up and take the first step. To do this, you need to do at least a few of the followings.

Experience
If you read up most success stories, the owners of the café businesses are people who had worked as engineers, lawyers and some even doctors. They had a deep passion in drinking coffee, baking and cooking. At some point of their lives, they decided to venture into this business, two friends or more, who had similar passion but contradicting work experiences. An engineer and a doctor friend, a lawyer and a chef for example.

They all have something in common; strong passion and confidence to succeed. Failure is not an option for them. They were able to analyze, craft, create and establish a business that will have consistent growth by inducing their deep passion in understanding the business model well.

Homework
Did you do your homework? Have you done any form of market research? Are you documenting details from your observations, keeping business contact lists, resource list of people who will be able to guide or assist you? Are you bringing in new solutions to a market sector that you are confident will bring out fruitful results due to demand and supply?

Business Plan
Do you have written a business plan? Look, even if you are not asking for a bank loan or proposing your spark of an idea to a venture capitalist, you still need a business plan in writing. There are so many websites today that offers free downloadable business plan templates you can take benefit of, if you have not done your business plan documentation so far.

Financial Resources
How will you finance your business? How much do you need as an initial start up capital? Are you going to beg and borrow or you have some form of savings that you can use whilst not having yourself or your family being in dire difficulty for the next six months to one year?

Many banks offer small and medium scale business start up loans. However, you may not get the full start-up capital even if you wrote a very convincing business plan and its related paperwork as needed by the bank. If you are planning to borrow from friends or family members, remember there are risks of indebtedness, abuse and strained relationship, if things turn sour.

Is there someone who is having excess fund and they have confidence in investing in your business venture? Will they be able to offer you a low-interest free startup capital? Are they willing to back you up in times of need? Do they believe in your vision of being successful in the business you are starting up? Then, you have already got one quarter of the boost needed. The balance three quarters are the efforts that you are taking to keep in line with your business plan that you have put forward.

This opinion of mine is a personal one, but my primary advice is, “never start a business with borrowings, unless you are sure that the repayment is absolutely possible”. You on the other hand, may differ in my opinion and it is all well and fine as long as you are confident of your resources and returns.

Expense Budget
Do you have an expense budget planned out? This is also derived for use in your business plan and your personal expenses. Remember one key factor here, I say it loud and clear, “ Company’s earning, is not your money! “. You only derive a reasonable salary paid by the company, just like your employees. Your company is an independent entity and must be free from your abuses.

Most commonly, business owners manage their companies, as if, it is their free-will wallet or cash cow. They bring forward the earnings to immediately purchase luxury cars, start moving to a new bungalow house, charge their home grocery purchases to the company’s account with the thought that the company will and should pay for it. If this is how you are visualizing your possible business and its financial resources, you have got it all wrong indeed.

Location
Where do you plan to house your business? Are you planning an online business, operating from a rented shop-lot, or working from home?

Regulatory Requirements
Part of your business plan paperwork, you will also need to identify if your business will require additional registrations with local council, business permit, signage and more. Do not give the excuse when you receive a summon from the council saying you did not know about it. Ignorance is not bliss.

Business Name
You need to have a catchy business name. Please, do not write a thesis title to your company’s name like, “ Total Solution for Running A Business Private Limited ”. You will find that long names don’t even get to fill in the limited text space given on an online registration form.

Bookkeeping
Have you looked into appointing Tax Accountant, Auditor and Company Secretary? Who will be managing your company’s book keeping or account management? Have you got a Registered Tax Accountant to oversee your records? Do you have an Auditor to review your business operations as needed and by regulatory requirements?

Make sure you get a Registered Tax Accountant who can advise you with the tax and financial regulations so that you will not be tempted to abuse company funds. Tax Accountant will be responsible to file in your company’s annual tax filing. A good Company Secretary will be able to guide you with proper documentations when you exercise certain decisions within your company, that requires director resolutions to be documented and signed.

Courage
This is the ability to overcome matters that frightens you. Without courage, you cannot move forward, especially if you want to start your own business. If you do not have the brave instinct to make the relevant progresses in your life plans, you are also not able to make the changes from within. Only you can make the change if you are resourceful enough. You are looking for guidance, keeping people with Positive Attitude around you always, do not hesitate to ask questions on your doubts, and most of all, be able to believe in yourself. Read the acronym for Courage.

Summary
Review your answers to the above questions. You must be able to do so, in good sense, logically and factually with your feet on the ground. Stop the illusion of just dreaming one day you want to start your business, but the day does not seem to appear anywhere in your real timeline because it remains only in your dreams. Be on the right track.

Keeping a proper timeline in your plan is crucial. You may say that in five years from today, you plan to start your own business. So, in reality, you are starting your homework now!

You have 60 months of your time, which you divide into two. Take the first 30 months to plan and save up your start-up capital. Then, the other 30 months to provide back-up funds needed for your personal and or family budget expenses. You will need at least 18 months of fall back cash in reserve that will provide you enough funds to keep you afloat.

If you have followed Positive Attitude Success Pyramid^© path so far and established the core essentials indicated in the related blogs, you will be able visualize the end results clearly. Ready to start a business or are you just comfortable with where you are?