This is a continuation of the first article The Real Deal About Starting Your Own Business (Part 1).
From my personal experience in business, I continue to advise you on the mistakes not to make when starting your business and what practices to incorporate early on.
Don’t take a loan when starting your business if you don’t have another source of income
It’s so tempting, especially when you have a business plan set up and you are 100% sure that it’s going to work. Business is good, so why wouldn’t you be able to pay back the loan?
That’s the illusion of a loan and business. Business is never guaranteed. You could be doing well while selling meals from home and decide to take a loan to pay for a restaurant. The minute you sign the dotted line, a well-established franchise sets up next door and steals all your potential clients. What and how are you going to pay for the loan?
When starting your business, only take the loan if you have another source of income that can pay back for the loan if the business goes bust. Unless you have a running business that already has a steady stream of revenue, do not take a loan.
For example, if I take a loan to buy a car to use as an Uber, I should have another source of income that should be able to cover my everyday living expenses along with the monthly instalments to pay back the loan AND any expenses that car will incur such as servicing, paying for fuel, etc.
When you resign, don’t burn bridges
For whatever reason you are leaving, leave on good terms. Even if your boss always delayed to pay your or the environment was negative, leave professionally by handing in a letter of resignation and giving the required notice.
You won’t believe it but sometimes those networks may open doors for you in the future or be your biggest supporters. Plus you put in the work by being there for however long, so why not reap from it even after you’ve left.
You will have to be disciplined
Keep daily accounts and make sure you don’t use the business’ money for your own personal needs.
It’s very easy to mix personal money with business money and later on you can’t trace how the business money was spent and how much profit you made. Also, keeping money separate can help you not eat into your business’ profits.
Plough back profits
A lot of times, entrepreneurs don’t plough back the money that they get, back into their business. For example, you are renting out your one bedroom apartment as an Airbnb and you’ve been making good money from it. When you do receive money from guests, all you do is pay expenses and pocket the rest of the money.
It will reach a point where your business will stagnate or start to drop. To avoid this, plough back profits when starting your business. Set up a website and pay someone to market it for you. Put TV’s in the bedrooms so that you are competing with the hotels. Keep reinvesting and growing the business.
Your customers are your business, so invest in them
I cannot emphasize this enough. This is one of the make or break disciplines of the business and it is a habit you should incorporate when starting your business.
One of the ways that you can do this without going out of pocket is by adding a margin to your rates so that it is used to cater to your customers. For example, if you rent out a furnished apartment at US$20 per night on bed only, you could instead charge US$25 per night and use that extra US$5 that you will make per night to pay for their taxi back to the airport or give them “free breakfast” every day.
Your clients are your best marketers. They’ll be touched and if your services are already good, then they will be quick to refer other clients to you. Give your clients a reason to keep coming back.
Keep up with the trends in your industry
In this age of technology, you cannot afford to not know what the latest trends are in your industry. In the hospitality industry, you’ll find there are still establishments that don’t have social media pages or a website to create awareness about their place.
Even if your business is doing well, what happens when someone has heard the name of your establishment and would like to come and spend a night at your place but can’t find your contacts online? What if they have positive feedback that they’d like to post online that could help bring more clients to your door?
Having an online following can keep you going even during the low seasons of the industry.
Get a business partner
This may not always be possible but I strongly believe in getting yourself a business partner when starting your own business. Make sure that this person has the same ideals as you do.
If you are a person that doesn’t believe in cutting corners then it’s not worth partnering with someone that has no qualms with bribing to get a tender, no matter how much they’re bringing to the table. Your different value systems will cause a lot of friction and may lead to the failing of your business.
Make sure your partner compliments your talent. Say you are in the business of baking cakes but you are bogus with social media and taking pictures, then get a partner who thrives at doing that. Someone with an eye for photography and writing catchy posts will help you garner more clients.
Another reason to get a partner is business can get very lonely and disheartening which is why it is great to have someone to go through it with. During the tough times, you’ll be able to encourage each other and not give up.
If you don’t want to get a business partner then hire the right people
Hiring a partner can be risky and if you are wholeheartedly against the idea or haven’t found the right partner for you then hire key people that will make the business operate like a well-oiled machine.
Hire a virtual assistant who is good at making cold calls, following up with clients, writing emails, writing invoices, doing the accounts, hence leaving you to focus on what you are good at and love.
And yes, we do have Kenyan virtual assistants. You can ask on Awesome Transcribers in Kenya on Facebook or you could search for one on Upwork or Linkedin, or state what you are looking for on your social media pages.
When starting your business, keep these tips in mind to guide you and make fewer mistakes on your road to success. Some of them may feel like a nuisance but be consistent and implement these practices early on and they will make your life easier and accelerate the growth of your business.
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