5 Fundamentals You Need to Start A Successful Business
Starting and operating your own business is one of the most exciting and potentially rewarding activities you can engage in. There is no limit to what can be achieved through private enterprise, when it comes to standard of living, self-fulfillment, and self-actualization.
1. Good Planning
The most important success factor for any business, is good planning. Without it, a business is at the mercy of fate and random chance, instead of sound judgment and informed projections. Starting a successful business requires your investment of time, money, and energy, so you will want to think it through before taking the leap.
You must investigate the business and market you are about to venture into by conducting a survey. This will allow you to determine the feasibility of your potential business venture. Such a survey is known as a feasibility report, and you may hire a consultant to prepare one for you.
If the venture is found to be feasible, you must prepare a business plan. The business plan can be used to raise funds from investors or financial institutions, whom you may approach for loans or equity investment.
2. Traits for Success
Becoming a successful Entrepreneur depends heavily on your personality and behaviour. Some important traits you will require, are:-
- Motivation: the mental and physical drive to succeed
- Confidence: the firm belief in your own capabilities and your chances of success
- Courage: the willingness to take risks, and sacrifice your own security if need be, to accomplish your goals
- Decisiveness: the skill to analyze complex situations, and take decisions
- Leadership: the ability to get along with others, and inspire cooperation, confidence, and loyalty
- Communication Skills: The ability to express yourself and understand others so that ideas can be shared
- Competence: the expertise to produce the goods and services of your business
3. The ‘Right’ Business
A business that is right for a friend may not be right for you. To increase your chances of success, you must select a type of business, or a field, that genuinely appeals to you. Generate ideas for businesses you would enjoy running, not just for the money, but also for the fun of doing them. The more ideas the better.
Dig into your background, experience, education, and hobbies for inspiration. You may be surprised at how many different businesses appeal to you. Narrow down your list to those business opportunities that most closely match your qualifications and interests.
If you are determined to start a specific business, even though you have little knowledge of it, think about how you can minimize your risk. Find out as much as possible about the business. This can be done through further education, research, working for someone else, seeking expert advice, talking to existing professionals in the field, etc.
4. The ‘Right’ Legal Structure
The Companies and Allied Matters Act (1990), provides for you to either register a business name, or incorporate a private limited liability company. The business name when registered, may be run as either a sole proprietorship, or as a partnership.
When deciding which legal form to choose, note that each has its own character. The important thing is to decide which legal form will work well for you.
With a sole proprietorship, you are in the driver’s seat. You will have total control of your business, and total responsibility for it. Just as all profits from its operations will be yours, so will all its debts and liabilities. It is very difficult to attract investors to a sole-proprietorship. If you intend to attract investors, then you should register a private limited liability company.
5. Start-Up Capital
Prior to commencing operations, you should estimate as realistically as possible, the amount of capital needed to launch and sustain your business during its first six months. This will be your initial Working Capital requirement.
You may obtain start-up capital via equity or loans from various sources.
Equity options available include:
- Venture Capital
- Your partners & shareholders
- Your personal savings.
- Foreign private equity funds
With loans, you may borrow from:
- Federal and State government intervention funds
- Commercial Banks
- Micro Finance Banks
- Micro Credit Lenders
- Family and Friends
- Supplier Credit
- Foreign Credit sources.
Armed with your business idea, feasibility study, and business plan, we advised you to seek professional assistance as you begin your exciting journey to becoming an Entrepreneur.
Welcome to the world of Enterprise.