An Idea does not make you an Entrepreneur
There are so many people who consider themselves entrepreneurs.
I am here to say, that entrepreneurs are few and far between.
Having a great idea, does not an entrepreneur make.
Ideas are a dime a dozen and there are so many ideas floating around the universe, but what there is a shortage of, are people willing to take those ideas and put specific plans in place to actually make them happen.
I come across so many potential new business owners. People who have an idea, but are not spending the time and energy to get them to a point that they are a feasible company.
So many potential business owners have not even taken the first step, registering a company with CIPC.
Starting a business
Starting with the basics is critical. The legalities of a company, taxation and tax clearance, bank accounts and all the registration documents that come with it take time. Often there is a thought that this can be done overnight and they will wait until they have landed their first project or client, and this is often too late and causes unnecessary and unprofessional delays.
Doing things “on the side”
It is frowned upon in Silicon Valley to have a full time job and work on a side project and try get funding for the project. The funders and venture capitalists won’t back someone who is not 100% committed to the game. In SA, even though there are many funders out there, they don’t necessarily back start up’s, so unless you have some great savings or family money, quitting your job for your great idea is not necessarily the option.
What the budding entrepreneur needs to realise, is that this needs to be “on the side” and not in lieu of time spent at your current employer’s expense. When people think that nobody notices they are spending company time and resources on building another option, they are grossly misinformed.
The Side project needs to be worked on after hours and weekends, and this is where it normally falls down. The “work/life balance” that so many people search for are not synonymous with the title of entrepreneur.
The myth of funding
So many times, we hear that it is too expensive to start a business. That it takes Millions of Rands to get something going. This is only the case if you are expecting to drive a fancy car and pay a high salary off the bat (Business and industry dependent of course). But many companies can bootstrap themselves for years before either earning enough to start paying salaries or get funding.
Many of the venture capitalists are looking for certain basics before even considering putting their hard earned money into a business.
There needs to be a good business strategy in place, a grounded person who knows the industry, the market and has the gumption to make it work no matter what. (t is also important to have some “skin in the game” as they won’t put their money in if you are not prepared to do the same.
It cannot be expected to come to potential funders with an “idea” and expect them to come up with the strategy to make it work.
Learning the Lingo
It is not enough to rely on a specialist to do some of the work for you, when you don’t understand at least the basics. For me, it is the finance modules. It is critical to have a basic understanding of the finance role, terminology, margins, budgets etc, so that when you as the “owner/entrepreneur” gets asked the difficult questions, there is some semblance of coherence and understanding of where the company stands.
It is not critical to have a degree in finance, but there is so much content available for free online that explains the concepts and terminology to be able to grasp the critical basics required.
Closing the loop
Whatever the final loop may be, sending invoices, reports, feedback to the customer or the members of the business, it is critical to be evaluating all the time to gauge what is working and what is not.
It is not important to “pivot” often, as you need time to collect data, but tweaking aspects of the business all the time is critical to ensuring you are on the right path all the time.
Time and temperament
Allocating time to building the business is essential. Giving up time with friends and family in lieu of working on the strategy and plan is going to be necessary in the beginning. What you focus on will grow. Being or becoming an entrepreneur is a horribly lonely place sometimes and this is part of the process.
Building businesses with friends
It may seem like a great idea to have a project with a bunch of your mates, but unless you are all bringing a core skill to the table, it is easy to get caught up in the hype of a cool idea and land up with a bunch of leaches who all want the glory and are not prepared to put in the work.
Partnership agreements need to be done upfront with key focus on input and remuneration.
Becoming a jack of all trades
In the beginning it may be necessary to wear more than a few hats. If there is no budget to have people in core functions, then it is up to you the entrepreneur to become all those people.
Getting friends and connections to offer free advice in the beginning is crucial and using your network to build your business is normally not frowned upon too much, when your friends and family can see you are working hard at making it a success.
Finally, it is a personality type that has the staying power and energy to keep going under the harshest of circumstances and life pressures. Starting and building a business is not easy, it is damn hard. Sleepless nights and lack of cash flow are just some of the pressures. Being fluid and adaptable is a crucial personality trait to develop.
So when you are thinking of that cool new idea, really consider if you are prepared to put in the time, sweat and energy to see it through. Nothing is an overnight success. Three to five years is required to have a stable entity, so make a call. It can be the most rewarding thing you do.