Decisions Aspiring Entrepreneurs Must Make Before Starting A Business

Each year, talented and creative individuals establish thousands of businesses. A business can be a wonderful thing; watching an idea blossom and the impact it can make in people’s lives or the change in an industry.

This year alone five Nigerians were listed on the Forbes Africa’s 30 Most Young Promising Entrepreneurs list...

There are always risks in everything that we do, but with the advent of start-up culture, many beginners have been able to pick vital tips on lessons and training on acquiring the right mind-set, planning and self-development. Depending on the nature of the individual—the person can move to quickly or move to slow—no one is the same, but what remains is that there are fundamental steps, or call them decisions, to consider going ahead.

We have seen examples of successful business people with small beginnings that inspire us. This year alone five Nigerians were listed on the Forbes Africa’s 30 Most Young Promising Entrepreneurs list such as Aigbe Omoregie, founder of Intercontinental Paints, who started his business with an initial capital of N18, 000 (less than $100) in 2006, but who currently hires 50,000 people today. So the beginning before the launch of a venture is important. Today, more people are more qualified than ever to run businesses: they are educated; some even have advanced degrees; they are experts in their fields, and they are ready to transfer this experience and knowledge to pursue their interests or passions.

Therefore, for the aspiring entrepreneur, preparation is key as a quote from Mark Caine states: “Meticulous planning will enable everything a man does to appear spontaneous.” Here are thoughts on what to consider while making decisions that can shape your business life, and maybe your success.

To act on an idea or not

The life of an entrepreneur is all about creating ideas to create businesses centered on their interests or passions. These ideas can turn a lot of profit or make a dent in the world. Entrepreneurs recognize that not all ideas are viable because it’s a big decision, and a risk. Though the preliminary preparation is important—business plan and adequate research, an aspiring entrepreneur must understand that a business on paper is very different than its actual operation. The actual operation requires a dynamic personality, a person who can shape shift to adapt and be spontaneous, quick thinking, make tough decisions, and be comfortable with uncertainty. It is a tough decision to make when deciding to act out that idea or not. 

To partner or not

When you decide to act, you may wonder if you should have a partner, after all two heads are better than one. Also, there is value in working with someone who complements your skill-sets – handling aspects of the business that you would regard as your weakness. A partnership can be fruitful, for instance the fashion designer duo, the Okunuren twins; and the notable media moguls of Red Media, Chude Jideonwo and Adedebola Williams. But it can also be problematic; there could be constant friction between you and a partner. Can you deal with the possibility of a fall out? In that case, you may consider getting legal advice and entering agreements to define the partnership and its operation. Otherwise there is collaboration as another option to explore. These are decisions that require refection. Like someone said: “Business is easy, but people are difficult.”

Products, Pricing and Competition

Another tough call is pricing the products to be competitive. What will be the value of your offering? This is important because pricing could be your first test on becoming competitive with others in your space. Quality and other kinds of value given to customers matter, but the price of your products or services can make or break you, especially at the beginning as you build your brand. Customers are always appreciative of quality products that are on offer, but the price is most times the definitive factor that determines if they will keep coming, for instance the supermarket retail business. Research would be appropriate at this point. Pricing should be competitive enough with the standards in your industry space or categories of what you offer (luxury or mainstream), and the caliber of customers that you hope to attract. It’s important because if people do not buy your products, you will be out of business soon.

To hire or not

If you have a big budget or start-up capital, hiring would definitely be on your agenda, especially if you are working in an industry that requires collaboration such as technology. Hiring may involve only a single employee or more. But it’s a critical decision to make because its one of the first recurrent expenditure/overhead that you take on—that is remuneration for staff members. The other option is to outsource tasks until you are ready to hire. But, a word of caution: being a new business, you may hire down, that is, not hire very experienced people to keep your payout low; however, it is important to acknowledge that people are not perfect, and you will have to train to the standards that you have set for yourself and business.

To borrow or not

There is the case of money. You will always need money to keep things going. But if you require a huge amount of capital to start your business, then step back, revaluate your plans and scale back. A loan may not be right at the beginning. The cost of money you want to borrow could be too high—30% to 33% interest rate from the banks. That would be an un-necessary burden if you could pull it off and get a loan from a financial institution without proving your worth first. Family and friends first— that’s a good option instead.

In all, when making tough business decisions, be prepared with adequate information to make your decisions. There is no blue-print on the perfect way to start a business, there is no crystal ball that can tell you if you will be successful, but you can be prepared on the things that matter; things with a high chance of affecting you, so you can make those decisions that can shape your business life, and even maybe your success.

 This article was originally published in the Guardian Newspaper Nigeria