Starting a small business in itself is a huge and difficult task, it becomes more difficult in a tough and slow economy, especially in a recession. When an economy is experiencing recession it simply mean without mincing words that such economy is broke. This cause a ripple effect on everybody in the economy. We all know what pose a threat to most small business startups is finance.
Sequel to this I encourage anybody with the intention to start a small business to have a good business plan, you must know what you need to get started and how you want to go about starting the business. I won’t be mincing words to say that entrepreneurs will have to work very hard to find their startup finance, you must know how much you need to start, know your cash projections, know the volume of sales you must make to break-even, how much personal money to invest, know when to allow the business carter for itself, know the price that will make you break-even and if it is competitive, evaluate to know your sales projections are feasible and realistic, how much will be your operating costs, above all what you need to do to make a profit.
Starting up a small business can be so difficult and stressful, reason why most people do not want to create one, but rather look for those who have created one and seek an employment. The truth is that it is almost impossible to create wealth living on salaries alone. I think I need to emphasize that every human should be an entrepreneur in the 21st century, regardless of who you are or what your profession is. If it lacks economic content, it just won’t go far. A doctor must see himself as an entrepreneur – it is that simple, a doctor cannot efficiently manage an hospital, but a doctor that is an entrepreneur.
If you have the intention or idea to start up a small business, especially when you are in a rough economy or a recession like Nigeria my beloved country is going through now, then consider the tips below, it sure will help:
I tell people with the intention to start a small business or whichever business that capital or finance is not the first thing to worry about. It saddens my heart to discuss with young minds about business and the first thing they ask is where will I get capital? This is what I tell young aspiring entrepreneurs like myself: Get an idea first, a marketable and economic idea. This is the first task for starting a small business, and where many startups fail. Before worrying about capital or finance, have an idea and a business plan, then seek advice from professionals ahead. You can ask:
- A friend or relative that owns his or her own business
- An accountant or business analyst
- Your mentor or someone who have done what you want to do before or something close.
The reason this is imperative is that they must help you review your plans to see if there are no unrealistic targets or vague ideas. You must be sure you are not missing out something crucial and might hinder the growth of the business if not planned for.
This is the biggest part for most entrepreneurs starting a small business, their usual complaints is where do I get the capital from? To me I think it is not something to bother about, it is the easiest thing to do. What is most important to me is to have a well reviewed and approve business plan. I was shocked in my final year in school studying business when Professor S.S. Maimako now the VC of the University of Jos, took us a course called “Principle of Finance”, one thing I cannot forget about the course, as much as I do not have strong interest in finance is this: “He said all business must borrow”, borrowing sometimes is more profitable than financing with earned income. He taught us that most reputable organizations borrow not because they do not have but borrowing seem the best options – I enjoyed that course.
Please take a loan, micro finance banks still gives loans to good business ideas. I am one person who do like taking loans – I detest it so much, but professionally, I have realized that it cannot be done without. Entrepreneurs must have personal savings, meet family and friends for loans. Bootstrapping is another part of finance that is key.
Start Small, Grow Big
Every tendency of entrepreneurial starting business is likely for them to want to start very big, but in reality it doesn’t not happen like that most times. I have always wanted to start a business venture upon getting my admission into the university in my first year. I had intentions to open a small outfit and have a good business – I wanted not just a small business but a brand, every attempt to get capital was abortive – I begged my mom for financial assistance but she refused, she must have felt I was too naive but should learn before starting.
My pastor said something in church that liberated me that Sunday, it was simple “your readiness to start as small as you have is a proof that you have faith in God” it should religious, but wrapped around it is a mighty economic principle. Immediately I knew I had to start business, that was how I started my business life in my 2nd year in school.
Manage your expenses and expectations by starting as small as you can. Start locally but with a global picture in mind. Expanding business after startup is very important for a business life. I started my business life in school just with a bag loaded with packaged ties with cuff-links and pocket handkerchiefs for fellow students. We use to have several business presentations back then and as groups members choose the best outfit for presentations which leaves no male without a tie, so I decided to get a very good one at the cheapest price and I made some money, before I finished in my final year I had managed a business worth millions.
Create a Niche
Creating a niche is something I find very important in starting a small business. There are one million and one things a business can do, but you have to choose something specific to focus on. There are a million and one people that will need your product or services but you have to choose a particular target audience. You can go as far as choosing a particular demographic. More like: women in Nigeria within the age of 30-40 are your target audience. It help you keep focus.
In my place of work, I noticed we are in a highly commercial environment, hence getting lunch seem very expensive, what some colleague find more stressful is the pain of going down to a restaurant down the road that have a good food and a relatively good price. Suddenly a young man walked into the office someday with a flier with the message to solve or lunch problems, all we need to do is make a call and food will be brought down in 10 minutes, it was amazing, we gave it a try and it worked. The food was not just good, a little more expensive but it was worth it.
I learnt so much from that, I saw a business man who created a niche by solving people’s lunch problems, he did not need to spend too much money on a location for restaurant, he also had a target market of the office workers around Allen, Ikeja, Lagos. That business sold far more than all restaurant around, with less operating expenses.
Use Technology to Your Advantage
In a recession technology can help you save money and increase profits. I’ll tell you how:
- Social media is very powerful and a platform to sell your goods and services.
- Do email marketing instead of more expensive form of marketing, we all know sending a mail is as free as having an internet connection on our devices.
- Optimize your online platform with search engine optimization
- Sell your products and services through multiple online channels – there are so many free of them
Networking is an integral part of business that should not be taking likely. Highly successful entrepreneurs knows this and do not joke with it. Create good relationships with friends and families that can help sell your business, never stop talking about what you do. Tell friends and family or get to know more people in your community who can refer customers to your business – you can join a local business networking group or association around you. It is very important to have people referred to your business without spending much.
I visited a the Ikeja Golf Club recently, and I saw how accomplished people behave. It was so obvious to me that most of them just pretend to like golf, what they really like is the networking and business part of it. They will do not anything to make sure they are there.
It is just very true that there are several opportunities in starting a business in a recession or tough economy, entrepreneurs just need to do their home work well, take strategic opportunities, learn to bootstrap yet maximize the value rendered to customers. We must seize this opportunity recession brings along to build our economy. If entrepreneurs do nothing, the condition of the economy remains the same.