In 2019, entrepreneur, Jeff Bezos, the founder of eCommerce giant, Amazon, became the first centi-billionaire (with a minimum net worth of $100 billion.)
So, you’re a budding entrepreneur, wanting to start your own business to bring you wealth and prestige? That’s great! Three of the richest men in the world had exactly the same ambition, namely Jeff Bezos, Bill Gates and Mark Zuckerberg. Besides this accolade, they also have another trait in common: none of them has advanced business degrees. Bezos and Gates dropped out of high school to create their respective eCommerce (Amazon) and technology (Microsoft) empires from their garages. Facebook was born out of Zuckerberg’s dorm room at Harvard University. It was through pure passion, determination as well as the conceptualisation and execution of technically-sound strategies that catapulted them to the top spot within their industries.
In this article series, we’re going to discuss and provide insights into how you can start your own business. It all begins with an empty room, which we’re going to help you build from the ground upwards with each article. What do we mean by an empty room? Well, within four walls (be it a garage or dorm), Bezos, Gates and Zuckerberg took their idea, nurtured it and grew it into the multi-billion-dollar companies that they are today.
Chapter 1: Four walls and an idea
If you want to be the best, you need to learn from the best. Therefore, we’re using the analogy of filling an ‘empty room’ with everything that is required to start a business that, operates proficiently and has the ability to evolve to adapt to dynamic changes. We’re going to look at this holistically so that we can unpack the topics throughout the article series.
You know that you want to start a business, but you’re struggling to find that golden idea, does this sound familiar? Before we go any further, it’s essential to answer the most basic questions, ‘why do you want to start a business and what problem are you solving?’ Sit back and take some reflective time to think about this question. Without a definitive reason, you may as well stop reading now. Even if you already have a nifty business idea in mind, don’t skip this section. It may help you re-assess and/or refine your current thought processes.
Being an entrepreneur is also not for everyone. If being an employee for a company is just as fulfilling for you as being a business owner, then opening a business might not be for you. One of the mistakes entrepreneurs make when starting their businesses is thinking that he/she will work far less and that he/she will no longer have an 8 to 5 job and no boss. I’ve got news for you! Having your own business is much harder than working for a boss that takes all the responsibility for the bills, income, growth and sales of the business. You will now need to take on those responsibilities. You might have your personal reasons for leaving your job and starting a business, but understanding what those reasons are and how they will influence the growth of your business is paramount. Remember, you will now be self-employed person, be your own boss and you will always have to be working to make money.
You will need a very high level of discipline to keep motivating yourself to perform. This is not impossible, and there is nothing wrong with working this way if you are just looking for more freedom and enough money to sustain your desired lifestyle. If you are looking to become a millionaire or a billionaire, you will have to prepare yourself to scale your business at a much higher level. This will challenge all that freedom. You will not be able to work four to eight hours a day, five days a week anymore. Your business will become your lifestyle seven days a week, and you will work between 10 and 16 hours a day for at least for six days of the week. It’s essential that you can make this sacrifice and have the loving support of your family.
When you start your business, everything rests on your shoulders. You will be the product developer, researcher, marketing manager, salesperson, lawyer and accountant until you have grown to a point where you can employ specialists who can facilitate the core areas of your business to ensure its survival.
Our team of consultants can assist you with the hiring process and help you understand precisely when you will need them in your business growth cycle. The understanding of what problem you are going to solve in the marketplace is even more important than your personal business goals and lifestyle.
If you are not going to solve a real problem or make an existing solution more convenient to the consumer, you will not have people buying your product or service, and business without customers is unsustainable. You need to think out of the box and stay laser-focused on solving a visible problem for the consumer that improves their lives radically or even minimally.
Make sure you always put yourself in your customers’ shoes. They need to see the value of your product or service to convince them to pay for that value. Your idea may require you to change the mindset of the consumer so that they understand the problem it’s solving. In these cases, it will be more challenging to grow your business. So, before you move ahead, ask yourself ‘WHY AM I DOING THIS?’. Watch the following TED Talk by Simon Sinek for inspiration.
The ‘why’ sets the benchmark for every decision and process implementation needed to move forward. An article published by Entrepreneur South Africa recommends that you go through a process of self-evaluation. Ask yourself the following questions to help formulate a complete structure about the type of business you want to start.
- What skills do you have?
- Where does your passion lie?
- Where is your area of expertise?
- How much can you afford to spend, knowing that most businesses fail?
- How much capital do you need?
- What sort of lifestyle do you want to live?
- Are you even ready to be an entrepreneur?
Each answer is a stepping stone to defining the generic empty room and making it your own. Keep these answers close to you while reading the rest of this article.
1.2 Finding a business idea
Finding a business idea that is ahead of its time, as well as sustainable in competitive industries, is daunting. However, now that you have a good idea of your ‘why’, you have a context in which you can think of business ideas that you’re passionate about. Some of the most successful businesses have emerged from thinking about a problem that people never knew they had and providing them with the answer. You may even make an existing idea better.
Let’s take Uber, for example. Since its inception in 2009, Uber (formerly known as UberCab) has become a multibillion-dollar corporation in the public transportation sector; one of the most competitive, saturated industries in the world; not to mention it’s been an idea that’s been implemented for hundreds of years. So, the question is, ‘how did Uber manage to penetrate and gobble up the market share?’ It’s actually quite simple when you look at it from a logical perspective. Uber saw a ‘problem’ in the public transport industry. Even though it’s a profoundly saturated industry, they created their own space by capitalising on today’s advanced mobile technology developing a more convenient, reliable as well as safe transport experience for the public. The benefit of their business model is that it was scalable as well as measurable due to the variety of real-time analytical tools available. Therefore, they could keep up with user demand, and any problems could be picked up and resolved quickly.
For Uber, it became clear that their service could integrate its presence through other marketing channels such as social media: Uber partnered with Facebook Messenger allowing users to request rides directly from the popular messaging app. This gave them the ability to tap into a younger, tech-savvy audience demographic that set them apart from competitors. Further insight revealed ways of cross-pollinating their business concept into other industries. Bezos embraced the advancement of technology and integrated Amazon into cloud computing, digital streaming, as well as artificial intelligence (AI). Following suit, Uber took a piece of the food delivery service industry by creating UberEATS which uses their drivers to deliver the food and is now a standalone app. This has its own set own cost-saving benefits which stimulated financial growth.
Uber found a way to streamline an existing industry by using the ‘new tools’ at their disposal. Mobile technology and other online platforms to produce a unique customer-focused experience.
1.3 Market research
Market research is one of the most significant aspects that anyone planning to start a business needs to consider. You may have a fantastic product and/or service, but if you cannot break into your ideal market segment, it renders your business virtually redundant. It’s vital to conduct market research to determine whether there is a gap in the market and/or if you may need to fine-tune your product/service to appeal to your target audience.
The most prosperous companies collect quantitative (objective) data to support the decisions they feel are right for the business. This can be achieved by having a digital marketing audit conducted for you by a professional marketing agency. Key data touchpoints relative to the industry are assessed, gathered, analysed, interpreted and implemented to help the business function more effectively.
Here are a few of the foundational facets that a start-up business requires to take their product and/or service to market successfully.
Know everything you can about your competitors
Who are your competitors? Where are they getting the majority of their customers? How do they engage with their audience? What makes them so accessible? Why do they have a loyal, trusting customer base?
These are five of the most important questions that need to be answered for you to fully comprehend your current market positioning in relation to your competition. Once you have a benchmark, you can further refine your value proposition as well as leverage your strengths and fix any weaknesses.
The aim is not to be a copycat of your competitors. It’s to understand the value that they are bringing to the market place. It will help you break free from being ‘just another business’ that you can find everywhere. The purpose of investigating your competitors enables you to structure your unique value offering and bring even more value to the client. You need the drive and grit want to be the leader in the marketplace with your product or service. Never try to copy your competitors!
Embrace positive – and negative – feedback
This is a part of market research that many entrepreneurs bypass because they fear negative feedback or they think it’s irrelevant because they already have the perfect product and/or service. Don’t be foolish. Let prospective customers give their opinion. Use positive feedback as support, and negative feedback to polish your product/service to enhance its appeal to the audience. Feedback is one of the steps in Uber’s marketing strategy. They implemented rating systems for drivers as well as passengers which proved to be a key differentiator between Uber and traditional public transport. It was a novel way to foster trust between company and client; essentially, serving as a type of conversation – users could see they were valued. All feedback was analysed, and changes were made accordingly.
Define your brand identity
Your brand is your story and needs to reflect your mission, image that you wish to present to the world. Most importantly, it needs to convey passion – an inherent belief in your product and/or service. This includes everything from the colour palette to the design of your logo. So, how do you find your brand’s identity? It’s a good idea to view this from a holistic perspective – everything that’s been discussed up until this point contributes to your brand’s identity. Mainly, you want people to get a sense of your character and personality. Make sure your audience knows who you are.
It’s all about creating curiosity, engagement and consistent brand messaging with a unique voice and tone that resonates with your ideal audience. These are vital indicators that will dictate the relatability as well as the reliability of your business. Your brand’s identity will always need to evolve with changes in market stimuli and customer expectations. Please remember the powerful statement, ‘consistent marketing and messaging leads to consistent brand identity and, therefore, consistent sales.’
Look back at the answers to your self-evaluation questions to see if you’ve ticked the necessary boxes so far.
Achieve maximum online visibility
The reality is that if your audience can’t find your website, all the hard work you’ve put into the attempt to start a business may as well be scrapped. You need to be visible online. What do we mean?
Online visibility is the overall presence of a brand’s services and/or products on the internet. The vast majority of users enter queries into search engines such as Google which, in turn, generates search engine results pages (SERP). This achieved through search engine optimisation (SEO), which is the process of gaining website traffic from a search engine’s organic (unpaid) results. Today, your website is your new business card. It’s the core of your business, and therefore, it has to perform correctly to engage with your ideal audience and in turn, receive relevant, quality traffic that has a greater potential to convert. So, it’s critical that your website is search engine-friendly.
So, as you can see, accurate, contextually-relevant market research is the cornerstone on the journey to start a new business. It’s a time-consuming process, but that’s exactly where an experienced marketing agency can assist you.
1.4 Make it legal
There are specific legal processes that need to be completed as well as implemented for your business to be able to trade legally. When starting a business in South Africa, make sure it’s registered with the Companies and Intellectual Property Commission (CIPC). This is the government agency responsible for the registration of companies, co-operatives and intellectual property rights which includes trademarks, patents, designs as well as copyright. You’ll need to enlist the services of a professional legal team to ensure all processes and procedures are followed correctly.
The rules and regulations for company registration may differ in other countries.
1.5 Draw up a business plan
Do yourself a favour and watch the BBC series, Dragon’s Den. In this show, eager entrepreneurs pitch business ideas to five multimillionaire industry tycoons (known as Dragons) in the hopes of securing a financial investment from them that will provide the means to skyrocket his/her business into the mainstream market. Entrepreneurs who secure financial investment, as well as the expertise of one (or more) of the Dragons, have two things in common.
- They’ve come up with a novel idea that answers a problem that people didn’t know they had and;
- They had a comprehensive business plan that had supporting data to back up financial projections as well as goals to be achieved in specific timeframes.
So, it’s fair to deduce that meticulous, realistic financial planning and an in-depth, objective understanding of the specific industry’s market are vital if you wish to start a business. Do your homework so that you can incorporate all of the elements discussed in this article into a formidable business plan. This business plan does not have to be a 90-page document containing every single detail of your company. The dynamics of a start-up company will change a 1000 times in the first year of business, but you need to have a solid of plan nevertheless. A 10 or 15-page document outlining your goals, opportunities, threats, culture, financial projections, sales forecasting, will be enough. This will be a working document that you will continually adjust and align with your business growth.
We know this is a lot of information to process, but there’s no need to get flustered. Our team of experts can assist you with everything that you need to start turning an empty room into a revenue churning business. All you need to do is open the door. We’ll help you with the rest.