Are you ready to quit your job in favour of being your own boss? Here’s what to consider about the reality of the entrepreneurial experience – from people who have started successful businesses.
All the answers to your unique business lifestage questions
A business card that says ‘CEO and Founder’, your own office, having employees executing your vision and closing lucrative business deal isn’t what entrepreneurship is all about.
Yes, you’ll be in charge of your own business, but with the majority of start-ups not surviving past year one, you may want to prepare for your first attempt at business ownership.
“I think a lot of people get into the entrepreneurial space because they want the freedom and they want to feel like you don’t have a boss, but they don’t realise with that comes all the responsibility of you having to provide and make the effort to make it happen.”– Trevor Gosling, co-founder and CEO of Lulalend
Pursuing your passion is exciting, but how ready are you – and your finances, your business acumen and your character – for the transition from employee to entrepreneur?
1. Prepare your pocket
“When I left investment banking to pursue entrepreneurship I made sure I had a six-month runway in terms of personal cash flow to keep me going,” says Gosling. Little did he know that it would be 18 months before he made a profit big enough to earn himself his first pay cheque.
Related: 3 Traits of successful start-up founders
“Those were some dark days but taught me to live lean, which I encourage every entrepreneur to do. Don’t be afraid to eat dirt and get uncomfortable for a couple years, because the pain will all be worth it.”
Two to three years in, you may move beyond breaking even, but for now, take a leaf out of Elon Musk’s book – when he and his brother launched their first business, they slept on a mattress at their start-up’s office and showered at the YMCA. While, you may prefer not to do the same, prepare for some sacrifices that’ll change your life for the better in the long term.
2. Earn a good reputation
The first few months of running a business involve high capital output and – in some instances – only being paid 30-60 days later. You’re going to need some sort of support to help you along until you’re on your feet.
“I think it is all about creating good relationships and people trusting you, because you will find yourself in situations where you can’t deliver things on time and people that trust you will back you up, they will support you because they know at the end of the day you’ll stick to your word. When you’re first starting up as a business, when people invest in the business, they also invest in the person.” Tumi Phake, founder and CEO, Zenzele Fitness Group.
When you form strong relationships with suppliers early on, it’s easier to manage your business’ cash flow. If you’re not a people’s person, hire someone who is, or learn to negotiate and deliver.
Related: Tips to help you keep up your entrepreneurial energy
3. Don’t lose the spark
Steve Jobs famously said: “People say you have to have a lot of passion for what you’re doing and it’s totally true. The reason is because it’s so hard that if you don’t, any rational person would give up.”
Starting your own ecommerce store or even a restaurant could be your dream, but what’s going to stop you from giving up when things don’t go as planned? Gosling agrees with Jobs, drawing from his personal experience as the founder of two start-ups. He advises against allowing the running of your business to take over “and then you don’t enjoy what you signed up to do in the first place.”
- Ensure you have enough runway to see you through at least 18 months into your business venture
- Build strong relationships with clients and suppliers to foster trust.
- Persevere through the less exciting moments of being a business owner by remembering why you started.