8 things you need to know before you start a business

 
 

Author's note

Growing up I took the idea of not having to work if I'm doing something I love quite literally. And because of that, I eschewed the idea of getting a job, and instead dabbled in business early in life. My history with business started since I was a young boy but I'd save the stories for another time.

It's been 10 years since and I now run two businesses and I'm still learning, all the time but the most valuable lessons were those that I learnt early on which gave me wings to fly.

So, if you're thinking of starting your own business, here are 8 things you need to have in your personal starter kit:

1. Negotiation skills

Running your own business, you would need to deal with people all the time and negotiation skills are essential to the success of your business.

If you've gone to Bangkok or Kuala Lumpur to shop, I'm sure you don't pay for whatever price is quoted by the shopkeeper. You'll bargain as low as possible before you both agree on a price. That bargaining you do, you'll have to do a lot when you run your own business to negotiate with your customers to agree to a price that you'd sell it for.

2. Resources

The best businesses are those that require minimum resources but capitalise on the most number of businesses. Your resources could include time, money, materials and manpower.

Think of a filter funnel. The way you normally use it, only allows for a minimal flow of liquid to pass through regardless of how much you pour into it. That large amount of liquid is your resource and the liquid that passes through at the end is your output. Now, invert the filter funnel. You want to be able to put in as little resource as possible but generate a big output. Your initial investment may be high, but in the long run, you'll save up on it.

3. Selling techniques

A business can only survive if it can sell. Need I explain more on its importance?

What motivates you to buy a certain product or service? Is it because of the product or is it because of the salesperson. People have different motivations to buy: price, product, after-sales service, colour, etc. To sell, you'd need to learn and know everything about your product and understand the needs of your client first. And one more thing, don't sell something your client doesn't need just because you want to make more money.

4. Business Partners

Having partners to run a business could be a boon or a bane; your partners' personal issues could also affect your business. Think about this very very carefully because it could have the potential to determine your business's success or failure.

If you have personal problems, will that distract you at work? If your partners constantly have personal problems, will that not affect you as well? Remember, you are partners and the decisions made by any of you with a client or to your employees, is a decision made by the company and you have to honour it. You don't want to have to call back and apologise because that shows how unprepared and unprofessional you are.

On the flipside, if your partners are great team players, you'll run like clockwork. That said, no human is perfect, entering into a business partnership is also like being in a relationship.

5. Network

Starting a business also means you need some people to begin selling to. That's where your network comes in to help you get your first leg up! I just hope that your network likes you enough to help you out!

Ever had to call someone from a long time back for a favour? How did that work out? Your network consists of your family, friends, colleagues and basically anyone else you have access to. There's a rule that states that you are only 5 friends away from the 6th person. You don't know the 6th person but you can. And why is it so important that your networks like you enough to help you out? Would you buy from someone who's a jerk? Start being nice to people if you haven't started on it yet.

6. Profits

Sales is what keeps the business going and profits is what keeps you afloat and growing. You cannot be running a business if you are not making profits.

Profits is simply described as Selling Price minus Cost Price. How you want to determine your selling price is dependent on the value that a buyer gets from paying for your goods and/or services.

7. Skills

If you don't have any skills to sell, then make sure you have someone or money to hire people with the right skills to help you!

A lot of people have a lot of great ideas and talk about what they know and how it can be done but when push comes to shove, they may not know how to do it at all because they lack the skills. It could be as simple as an idea of how to sew a shirt. I know that to sew a shirt, I need a needle, a thread and the cloth but if I can't put the thread through the needle or know how to tie the end of the thread before I sew, my shirt will never get sewn because the needle and thread will continue to pass through the cloth over and over again.

8 . YOU

The last element here is all about YOU. You could have the other 7 covered and I'm sure you already do but if YOU are not willing to take the risk into the unknown, then you will never know your potential!

As the saying goes, you can lead a horse to water but you can't make it drink.

Remember how I started my journey? I knew what I wanted, do YOU?

Concluding thoughts

Of course, there are more things that I could add on but these are the key things that you probably need to know before you embark on starting a business.

So, if you still have a day job, and you're planning to be an entrepreneur, make sure you have these covered! Otherwise, it's a great time to sign up for self-development courses through your company and pick up some of those skills that you are lacking in!

If you want to learn more about the points above, I'll be going into greater detail over the course of the next few articles and will be sharing with you my stories. Take it that I'm guiding you along the months as you prepare for your journey into entrepreneurship.