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I once heard a friend say he needed money to start up a business. To him, starting a business simply involved having a fat bank account and hiring people to work for him. But experience over time has proved that notion to be “quite easier said than done.”
I got the inspiration to write this post after witnessing the “collapse” of a business that was barely six months old. What could have gone wrong?
A number of factors could be responsible for business failure at early days of existence. In most, if not all the cases, owners of such businesses did not take some basic start-up issues into consideration.
The first thing in business start-up should be identifying a need to satisfy. This is compulsory as the main purpose of setting up a business is to make money; and to make money you need to sell goods and/or services that people are willing to buy. So, there must be a need. Where you chose to sell what is not needed by the consumers, it would take a lot of effort to attract people.
In 2004, Mark Zuckerberg said when he lunched “Thefacebook,” that “everyone’s been talking a lot about a universal face book within Harvard.” He also stated his intention to create a universal website that can contact people around the university.
Zuckerberg was able to identify a need which had to be filled. Today, Facebook has over one billion members !
Once this is settled, the next question should be “can I fix this need? Do I have the ability and skills to fill this need? So many businesses have collapsed simply because their owners were mediocres in their chosen line of businesses. Most successful businesses are those whose owners are producing/rendering high quality goods/services to the consumers, because they have the skills and expertise to do so. Zuckerberg (and many orhers) did not stop at seeing a need; he had the skills and also gathered capable hands to work with him. Blackberry, Nokia, Apple, Microsoft, Sony, Samsung, LG, Toyota, Mercedes Benz, Honda, Facebook, Tweeter, Yahoo, Google, Forbes, CNN, BBC, MTN, Globacom, Etisalat…… These and many more have consistently retained customer loyalty, and hence remained on top, for being synonymous with TOP QUALITY products.
With the twin issues of need identification and ability to deliver settled, it is very compulsory to find out the feasibility of the venture. It is necessary to find out the viability of the business. It would not be worth putting so much money, time and energy into a business that would be profitable only in the short-run ; or a business that will take “forever” to recoup the start-up capital. A critical analysis of the proposed business is necessary here. A lot of research is compulsory. This must be thorough as wrong decisions and steps taken could be far-reaching.
In order to have a business identity, it is necessary to have a business name and register it too. Care must be taken when choosing a name. Apart from not choosing an already existing name, it is good to choose a simple
ts: savings, loans from financial institutions, disposal of properties and many more. For a new business, the options are not as many as existing businesses. Capital will also be dependent on the scale the owner wants to start off – small, medium or large.
Another crucial factor to consider is the location of the business. Businesses have to be located where its customers can easily find them. By extension, some businesses are not suited for some areas. For example, locating a school in a very busy area might not be a good idea; while it will be suitable for a cyber cafe, dry cleaning or trading business. A wrongly located business is like having a very beautiful garden on the last floor of a high rise building that people hardly go to. It’s as good as the garden does not exist at all. In this circumstance, the owner(s) of the business have a lot to do in terms of creating awareness for both the business and its products, using a lot of advertising and personal selling.
Once a suitable location has been found, the next thing would certainly be to put the place in order. Office furniture, electronics, equipment and fittings speaks a lot about you and your business. They give a first impression about you and the business. In fact, it might determine the economic class of customers that would eventually be patronising you later. The rich love going to shops and offices which match their economic status. So, do not be surprised if they prefer the shop or office of a competitor if yours is of low standards. The poor get intimidated by an expensive-looking shop/office. But everyone loves a decent place of business. So the choice is yours.
For a business that is in the service industry, you are good to go. The issue of hiring someone or not is entirely up to you to decide. However, for a medium sized business, you might need to hire someone to reduce your work load. Be careful here because a lot of businesses today are either facing serious problems or have collapsed because of the choice of staff they employed.
For a trading business, it is time to get your supplies and start business. Care must be exercised here too to ensure that you chose reliable suppliers – in terms of quality and timing of supplies.
To cap it all, aggressive promotional efforts is needed at this stage. Advertising, sales promotion, personal selling and public relations activities are needed to :
* Create awareness for the new business and your products
* Win and build up customer loyalty
* Grab and build a share of the market
* Give competitors an early fight
* Impress everyone that has something to do with your business (stakeholders)
A lot of options are available for each promotional effort. Choice is dependent on funds available, nature of product, competitors’ activities, among others.
In the coming days of the business everything has to be done to build up a customer base as well as customer loyalty. It is also necessary to be conscious of practices capable of causing business stagnation and collapse.
However all of these require a lot of patience, determination, resilience, foresight, planning, guts, tolerance, wisdom, and like I always add …..prayers. I cannot do (or advice anyone) anything without God’s direction, involvement and assistance.
In Michael Jackson’s words, “…all is possible, if GOD is on my side…”- (Speechless, Dangerous album)
Good luck to you and thanks for your time.
Related post :
Customer loyalty : A condition for business survival
Small business’ practices and the issues of stagnation and collapse
Decision making : The most sensitive and far reaching function of a manager
Take good care of your employees…
Outsmart your competitors or they will kick you out of business