The best way to fund a new business is to bootstrap (from personal savings/funds,family,friends and revenue generated by the business.You can do this by simply pitching your idea to close family and friends,get them to believe in the idea and fund it. However some businesses require high start up costs; such businesses cannot be bootstrapped, funds for such business can be acquired from investors, banks, crowdfunding, grants e.t.c ….
2) What kind of business should i start?
Business is easier when you do something you know about, have talent and passion for. Discover your talent and passion,do your research and you will easily identify the right kind of business for you.
3) How should i choose a name for my business?
You need to put some thought into picking a name for your business venture. Don’t just take on a random name for your business. Make an appropriate name choice ; it sets the business apart and protects it.
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4) Do i need a business plan ?
When you are setting up a business on a low budget,you do not need a business plan . Simply do a lot of research on the business , put down a mental model for it;make sure you reconcile this mental model with a bootstrap model as you go along ,this will give you a working business model as you scale up the business. In the case of a business with high startup cost, a business plan is required to create structure; it is therefore important that this business plan allows for flexibility as you go along.
5) How do i employ?
For a bootstrapped business, at the beginning of the venture, try as much as you can to involve yourself with the various aspects of the business so you able to determine the skills required when employing. Except you are on the look out for a specialized skill, employ interns and smart inexperienced people ,they are usually trainable and eager to learn. For bigger startups that are run on business plans,you can hire human resource consultants to work out the employment process. To save on costs you can also use professional networking sites linkedin to find qualified individual for various job roles.
6) What Licenses and /or permits do i require ?
This depends on the kind of business.
Do a research to find out licences,permits and registrations required to legally operate in your chosen business. Find out what permits,licences or registrations clients/customers look out for in your kind of product or service.
To operate within a certain scope some permits/licenses can be obtained from local councils at a minimal cost,that way you can upgrade as you go along in business.
7) What do i need to know about book keeping?
Get a basic knowledge on financial statements – Balance sheet, income statement and statement of cash flow. Keep a close eye on your cash flow. There are some software applications that help with bookkeeping,i use waveapp. Also,keep record of your business activities.
8) Can i operate my business from home?
This depends on the type of business, some businesses require a space where customers can come in freely while others do not. This is one good way to save on cost as a new business so except its absolutely necessary,work from home and let the business grow itself to acquire and maintain a work space.
9) Should i operate a franchise or start a business from scratch?
A Franchise comes with structure , this reduces the amount of risk involved in setting up a business. On the other hand, a franchise requires a good amount of capital to set up,there are usually many clauses in the agreement and you never really get to build the business structure you want instead you manage an already existing structure . Before becoming a franchisee ,make sure the business is viable in your choice area, work with a lawyer, make sure its something you are ready for otherwise simply start your business from scratch.
10) When can i expect to become profitable?
Most new businesses take up to a year to become profitable; Here are a few tips to help you stay afloat during this time
– Keep your expenses low
– Keep a close eye on you cash flow
– Engage in quick cash transactions / turnover
– Generate extra cash along the way by offering products and services relating to your business,make sure this does not distract you from your main business.
11) How will i cope with competition?
– Always stay aware of what your competition is up to.
– Regularly update your knowledge of what’s going on in the industry you operate.
– Listen closely to customers.
These 3 things will enable you create a niche for the business to operate
12) How much do i pay myself?
Put yourself on a minimal salary; even if the business cannot pay you yet, keep a record of it,you can later convert it to sweat equity.
13) How do i pick a partner?
A team can make or break a business,this is why choosing a partner should be done with care. A business partner should complement you in such a way that makes the business stronger. A partner is supposed to bring in something you do not already have . Have a good knowledge of who your business partner is to avoid surprises, make sure you are aware of all the risks involved in partnerships. Make the partnership agreement tidy, involve a lawyer, please do not set up a partnership on a gentleman’s agreement.
What to consider when going into a business partnership