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Tips and Guides

Do You Have What It Takes To Start A Business?

Prepare to set aside your fears and take a leap

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Original Article: Tisha Alvarez Photography: Pixabay.com (Main Photo)

Most people are afraid or apprehensive to start a business. After all, not everyone has the money nor the time that they can afford to lose in case the business doesn't succeed. But this shouldn't hinder you from trying. Here are some tips to motivate you:

1. Cliché as it may sound, have the passion for it.

Setting up a business isn't exclusive only to one personality type, background, or age group. Anyone who is determined to start a business can do so. Professor Andy Ferreria, who also wrote the book Go Negosyo: 50 Inspiring Entrepreneurial Stories, says that a business can begin when these three factors are present: passion, market opportunity, and capablity. Any of these three can push you to start a business, but all three should be there for a business to have the potential to succeed. Find what you're passionate about, and you can turn this into a business idea.

2. Draft a business plan. 

Even if you're opening a simple sari-sari store or karinderya, you still have to come up with a business plan. A business plan helps you figure things out before making the big leap. For example, when you're opening a small eatery, you have to plan what dishes you are going to serve, what your price points will be, who will man the eatery, and what your sales target will be so you can break even. Make sure you have the answers to all these questions before you start a business. 

3. Find sources of funding. 

You don't need to have a big amount of cash on hand in order to start a business, unless you don't like to loan money from a bank or from your relatives and friends. Professor AB Ilano, who teaches marketing strategy at the University of the Philippines Diliman, says that here in the country, borrowing money from relatives and friends is the way to go because "banks here are averse to lending on the basis of an idea." When you borrow money from other people, you can let them have equity of part ownership of the business. This means they own a percentage of your business, and their profit will correspond to how big this percentage is. 

4. Consider approaching venture capitalists. 

Ilano says these are people "with investment pools who are looking for a great idea to finance." Start small and present your business plan to them so you can build your track record. Then, slowly build it up until it becomes profitable. But remember this: you must let your venture capitalists control at least 51 percent of your business idea. At the moment, because you are a new entrepreneur, let them have more say on the direction your business is going. Learn from these people, so when you start another business, you will more control over it.

5. Prioritize the goods or services that you are going to deliver to your customers.

Forget about having an office, a secretary, a messenger, a driver, and other "nice-to-haves." Focus on your product. Pour your resources into developing it. And when your business grows, that's the time you can think of those "nice-to-haves." 

6. Whether you have to quit your day job or not depends on you.

Ilano's advice is to be practical. "Remember that you are managing your time. So if you have a job that takes a lot of time, then don't start a business that demands a lot of your time, too." Don't forget that if you have a day job and you're starting a business, you will have to do all the legwork required, all the dealings with customers, and making sure your product reaches them. If you think your business is already stable and that you feel that you no longer need to have a backup job a.k.a your day job, then you can quit your job and focus on your business. 

7. Know when to close shop. 

Look at your cash flow, sales trends, see if you can still afford to give it one final push, and check your level of determination. Ilano says that if three or all four of these are on the negative, maybe it's time to close down your business. But this doesn't mean that you have failed. Sometimes, things just don't work out. If your idea doesn't click, come up with a new one, and then try setting up a business again. 

Read the original article ("Getting Down To Business") in the October 2015 issue of Good 
Housekeeping Philippines. Log on to summitnewsstand.com.ph/good-housekeeping for 
more details. 

PHOTOS: Pixabay.com

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