Covid-19 has knocked us all for a six — after a seemingly interminable lockdown process, it’s clear that life will never be the same again. If you’re one of those people who’ve lost their job or got put on short-time, you’re probably still reeling from the impact.
It’s hard now, but it could still work out well for you.
How?
It might provide the impetus you need to start your own business. In this post, we’ll go over the steps that you should take before you invest any of your hard-earned cash.
Step One: Define the Big Idea
You must start with a clearly defined vision of what the big idea is. You might, for example, want to start a business selling food. Is that a clearly defined idea, though? Most certainly not. What will you sell? How will you differentiate yourself from other sellers in the industry?
Without clearly defining the idea in the first place, the business has no clear vision to follow, which is not a good way to start. Successful entrepreneurs take time to refine their business ideas. If you ask them about their vision for the business, they will be able to lay it out clearly.
You could perhaps refine the ecommerce idea by focusing on selling specific merchandise. One might, for example, focus on selling Tant Sanie’s Biltong. To zero in on the core idea, ask yourself what will make your business unique.
What Makes Your Business Idea Unique?
We don’t need to tell you how big biltong is here. You’re competing with everyone from the farm stalls to the big retailers. How will Tant Sanie’s Biltong differentiate itself? You could look into warthog biltong, or chocolate-dipped biltong, or maybe a biltong subscription service.
Think about what the other vendors are doing, and see how you can improve upon that. What are they doing wrong? Is there a gap in the market? Whom will you market your biltong to?
Consider what your target market wants. A good business idea does not necessarily mean reinventing the wheel. There is no need to come up with a revolutionary concept as long as you can find a way to approach the target market from a new angle.
Business’s success or failure depends, to a large extent, on the unique value proposition. What will your business provide that others do not? What sets your business apart?
Step Two: Is This a Sustainable Business?
Many new business owners are so enthusiastic about getting started that they do not think past the first few months of the business’s lifespan. They never ask themselves how sustainable the business is.
With the biltong idea, for example, sustainability would depend on the types of products being sold. That chocolate-dipped biltong, for example, will have novelty value in the beginning, but will it continue to sell afterward?
Creating some novelty biltong, and underpinning it with regte egte boere biltong might be a better strategy for long-term sales. Get your foot in the door with the novelty item, and keep them coming back for more with the tasty product.
Next up, consider how much biltong you might sell in a month. Is there a sustainable market in this area? Considering the current economic downturn, are people still going to buy as much biltong? If it does sell, can you make enough in a month to turn a decent profit?
If not, maybe it’s time to consider adding another line to the mix. Perhaps Tant Sanie’s Rusks could be next in development. What else could “Tant Sanie” make? What about milk tart or perhaps potjie meals? You get the idea.
Step Three: Assess the Competition
You need to examine not only the direct competition but also the indirect competition. Your shop will have to compete with other biltong producers. If you’ve got a great product, this isn’t insurmountable.
You also, however, have to compete for your target market’s disposable income. There are going to be many things that they’ll want to buy, like food, biscuits, and so on. You have to come up with a reason for them to spend their money with you.
Creating an organic biltong line that they can’t get anywhere else might be a good way to start. Offering a convenient subscription delivery service might be another. Finally, you can ensure that you have the very best service out there.
Prospective business owners must work on a strategy to deal with both direct and indirect competition.
Step Four: Conduct a SWOT Analysis
Conducting a SWOT analysis means analyzing the business’s strengths and weaknesses.
- Strengths: Having experience in making biltong might be considered a strength.
- Weaknesses: Needing a lead time of a couple of weeks might be considered a weakness.
- Opportunities: No one else sells chocolate-dipped biltong (Just be aware, that might be because there’s no demand for it.)
- Threats: The Pick n Pay around the corner is a convenient location and can sell biltong for less than you can.
This article by Forbes deals with the topic of a SWOT analysis in a lot more detail.
Step Five: Market Research
You have probably noticed so far that there has been no mention of funding. Before moving onto finding funding, it is critical for business owners to conduct thorough market research. One way to guarantee failure is to assume that the target audience wants to buy these products.
Meticulous research can give you the edge here. Where do people currently buy their biltong? What do they like about the stores that they buy from? What would they change? How easy is it for them to switch to a different seller?
If a business offers an innovative solution to a pain point that consumers have, it is more likely to be successful. A biltong delivery service, for example, could have a significant edge if no one else offers the same solution.
That is, if the people in the area want that service. Test the waters by speaking to your neighbours. Put a message on the neighbourhood Whatsapp group or the town’s Facebook page asking people whether or not they feel that there’s a need for the service you offer.
It’s pointless to go to all the trouble of offering a product that no one will buy, so don’t skip the market research.
Step Six: Create a Business Plan
A business plan is a roadmap to how the business will run. Some people feel that it is an outdated concept because business these days is so fluid. However, that is not an excuse to start a business without a plan. The business plan can change later, but creating a detailed plan provides more insight into what to expect.
A business plan is also an essential part of securing financing. Going through all the steps in creating a business plan is outside the scope of this post. Forbes has covered the topic very well in this article.
Step Seven: Is It Possible to Test the Waters Part-Time?
Can you find another job? While it’s not ideal to work and run your business part-time, it can give you the financial breathing space that you need. Just be sure that your new boss gives you permission to sell your products on the side. Also, ensure that your side hustle doesn’t interfere with your main job.
If you can carry on this way, it’s a good way to understand the business without committing to it entirely. Should you run your business part-time, you get to gauge the market reaction and learn the essentials while mitigating your risk.
You’re assured of your primary income and can invest more in the business. You can create a going concern first and then take the step of resigning.
It is a lot of work, but the upside is that you garner experience. Should the business succeed part-time, it is a good indicator that it will succeed full-time as well. Should more investment be necessary, it is a lot simpler to get it if you can prove that the business is already running and profitable.
Step Eight: Consider Funding Sources
There are several financing options available to entrepreneurs. It is better not to borrow money, but that cannot always be avoided. The traditional sources of financing include:
- Debt Capital
- Equity Funding
- Venture Capital Deals
Less conventional funding can be obtained through crowdfunding platforms. The South African government does have programs to assist entrepreneurs. Where possible, work on a shoestring budget and don’t use credit unless essential.
Speak to family and friends to see if they’d be willing to invest. If they would, draw up a professional contract that details what the agreement is in order to prevent discord later.
Is it All Worthwhile?
Be prepared — you’re going to have to work very hard. If you’re willing to put in the effort, and have done all your research, your business has a good chance of succeeding.
According to Modern Gentlemen, the benefits include:
- Control over your own schedule
- Full access to the benefits of your work
- More freedom
- Better income potential
Final Notes
The research will only get the business so far. At some point, the only option is to get started. Using the steps outlined above will give businesses a head start. Hard work and commitment will ensure that they have the best chance of success.
