Not every entrepreneur has the funds to start or purchase a large business with highly paid staff and all the “bing” associated with big business. There are many opportunities that are, easy to fund, easy to start and easy to run.
Selling luxury products or services does not currently have a big market, due to the ongoing recession. This means that businesses that sell luxury products can run into financial difficulties. You’ll have a bigger market and more customers if you sell products and services that are essential. Death, food, coffins, caskets, funeral services and cleaning products are examples of essential products and services.
Keeping the business uncomplicated, and your business strategy simple, will make the business easier to run until you get accustomed to how things should be done. If you do make mistakes it will not break the bank and if anything goes wrong you will not lose everything that you own.
If you start a sole proprietary and something goes wrong with the business, you risk losing a lot of money. Rather start the business by setting up a Close Corporation. Yes, a close corporation do have slightly more admin work than a sole proprietor, but it has other advantages that a sole proprietor do not have.
If things do not work out and the business has to close its doors, the creditors can only take what the Close Corporation owns. This means they cannot take the assets that you have, your personal belonging, such as your personal vehicle, furnisher or house.
IMPORTANT: Make sure that you protect your personal assets by not using your personal assets as surety for a business loan.
You can change the business entity as your business grows. The advantages of starting a Close Corporation from the start are that the name that you choose to use for your business will be legally registered. This means that this name cannot be used by any other company.
Other businesses and the public in general will also view the company in a better light than a sole proprietor due to the fact that the registered address and the names of the business owners will be registered in a database that is accessible to the general public. Registering a Close corporation will also open doors to tenders from the government. Government tender are only given to companies that are NOT sole proprietors.
Keep in mind that starting small does not mean less commitment. You still need to have absolute faith in what your business does and commit yourself fully to the business. This means lots of hard work, dedication and good management.
Good business management also includes financial management. Many entrepreneurs think that because they will run a very small business, they do not have to have a well thought out business plan. Sadly most small start-up business closes their doors within the first year due to financial mismanagement.
After having to live on a salary that barely stretched until the end of the month, many first time entrepreneurs battle to keep their hands out of the till. They think of their business as a piggy bank. My daughter used to tell me that she did not understand why I did not want to meet her every need since we did have a business. The money did not come from me, she argued, the business gave it to me!
Another mistake made by start-up entrepreneurs is that they use their good credit standing to purchase services and goods for the business. After all, working for a boss meant that you had a steady income and a bank account from which all your debit orders were discharged. Why not use this good credit record to start the business? Along the way, they forget about the debit orders, to busy spending money on all the things that they always wanted and could never have when they worked for a boss.
Do not buy what you do not absolutely need or cannot afford. Allow your business to grow and reach its full potential by ploughing money back in the business. All things come to those who work hard and are willing to be patient. Treat your business with respect and do not plunder it while it is growing and all the other things that you want and more will be yours in time.