Our columnist Mr Money Bags, who has decades of experience in Finance, an MBA, an advanced diploma in Financial Planning and not to mention his super business skills, is here to give you, our lovely readers some valuable tips and advice on money business matters. He is forthright and can sometimes be stern when it comes to your cash, but when it comes to finance he really is the expert. Read on for your business and finance advice…
As someone who has started his own business I always find beginning something new a task on its own. This is because there are many pitfalls to starting one’s own business. At the moment I am helping a friend with a new business project, and it got me thinking what are the pitfalls/hurdles that he will need to consider.
I guess the first point to make clear is that when someone starts their own business they are actually an employee to themselves. Potentially gone are the 37.5 hours a week with a salary no matter what. Gone are the perks of being an employee, and instead you are now the person who is effectively in charge of ensuring you have an income at the end of the week or month.
So, setting up your own business – well the first thing to consider is that you now need to be a professional in all areas of running a business. In past roles/job, you were probably just in charge of one key role or skill set. As a businessman/woman you are in charge of everything. You might have to learn new skills such as accounting, marketing, strategic skills as well as networking to ensure that your business is a success.
One of the key things I found out when working as a consultant for various businesses was that the most vulnerable businesses are those that are run by one person. This is because there is one person making the decisions, and let’s face it, no matter how good we might think we are, it is always a good idea to have another person’s input. Therefore if this is your very first business perhaps it might be worthwhile to consider a partner.
I would also point that if you are thinking of starting a business, then maybe it might be worthwhile to consider buying into an existing business. This is because in my view buying a business is far easier than starting a business from scratch. A start up business is far more expensive from a time based perspective. This is because it will require time from you to start the business, and in most cases will take several months before the business is running properly.
The other thing I would also consider with reference to time is that when in business, please do not think its a wage earner. I also encourage people to think of a business as a profit making machine, rather than a wage earner. A wage earning business person will more than likely be satisfied with a wage that they feel is adequate, and in my view will not push the business or themselves to ensure further profitability.
Last point I want to make is that as a business person focus on all areas of the business, and do not get yourself into a muddle by focusing on just one thing in isolation. I would split the business into three or four different areas such as: marketing and product sales; administration and financial planning; and lastly business operation be it service or manufacturing related. You will need to keep all three areas of the business actively within your mindset to ensure that your business does not fall behind.