By Tunde Owoeye-Phoster.
It is the entrepreneurial deception that causes for a lot of copy-cat businesses. Ngozi sees that there is a store on her street that sells flour (for baking) in bags, she sees a lot of truckload of flour being delivered into this store and at the same time hundreds of customers trooping into the shop to buy flour, then she think, “There’s a lot of money in the flour business; this maybe an opportunity for me.”
Unfortunately, she is not the only one having those thoughts on her street; tens of others have the same thought and are already researching how to get a shop opened on the same street. Before long, three other flour shops pop open and ‘spoil’ the business for the initial entrepreneur, however, if the initial entrepreneur can be patient enough, she/he may overcome, because most of the copy-cat businesses have no roots.
I believe the first reason why some small businesses fail in the first place is because the entrepreneur is in the wrong business. That a business has the potential to generate a lot of income does not mean it is the right business for you. There are a lot more intricacies to any business venture that a mere money grubbing eye cannot see.
There are several things to consider before starting a business, but three will be mentioned in this article;
1. Personal Vision
I’m sorry for using this over-stretched title called Vision, but what do you want to achieve when starting the business you want to start? Make money? It is absolutely not bad to start a business because you want to make money, but have you thought about how much, in how long? Most businesses today start out just to make money, but they don’t even declare how much, in what period and for how long.
This is it, you must first have a personal vision (and goals) that determines the business you should start and the way you want to run that business. So, there must first of all be a personal vision, and the business start-up is one of the tools to achieve the personal vision. Every other point that will be mentioned is an offshoot of this particular point.
Your business will definitely have its own vision, but if it does not agree with your personal goals and vision as an entrepreneur, you will continue to have other interests in other businesses apart from the one you have started.
In alignment with your personal vision are also your personal strengths and weaknesses. What can you do, what can you not stand, what kind of life do you wish to live daily, time requirements, family commitments.
Passion is a pointer basically to what you can handle. Business is like travelling across the ocean in a ship. Seeing that you do not know the future (what will happen in the middle of the sea), the best you can do yourself is to be sure you’re on a good ship. Obviously, your passion is what you deeply appreciate or hate. Passion is not the same thing as skill. A skill is a special way to get something done that you acquire through education or through experience… Passion on the other hand is what you find yourself thinking, talking, doing on and on, it is then profitable to develop a skill around your passion.
Can you stand the profits in this business? What people see every day is turnover not profits. After you deduct the turnover/sales from the cost of goods sold is when you have the gross profits, and the remaining money after other expenses are deducted from the gross profits is net profit. Do your research carefully, will you do a business with N100,000 sales and N2,000 profit? If you will, what are you going to do to mitigate against the risk of losing goods (since one of it can take away profits for another 50 units)? Watch the profits.
Other things you will need to watch will be coming up in one of the subsequent articles.
See you at the top!
About The Author
Tunde Owoeye-Phoster (www.twitter.com/tundephoster ) is the CEO of Phoster Solutions (www.phosterng.com) a branding and advertising firm with. Co-founder of two other companies, he is a business coach and one of the lead facilitators and consultants at Orange Academy where he lectures both new and experienced staff of Nigeria’s largest companies.
He is a LEAP Africa Awardee (for empowering youths through entrepreneurship education) and is also a FATE Foundation Alumnus. He is a graduate of Management and Accounting from Obafemi Awolowo University, Nigeria. He is a dynamic and practical speaker who possesses the ability to bring insights to the minds of both the young and old about entrepreneurship, branding and innovation. He is married and lives in Lagos with his beautiful wife.
He can be contacted through his email: firstname.lastname@example.org