Starting a business of your own is an exciting concept. It’s an opportunity to turn your dreams into a reality. All this excitement and passion is, however, blinding sometimes, as we do not see that it takes time to start a successful business. Some entrepreneurs want to start big, for instance, establish a farming operation that has cattle, pigs, chicken and maize all in a single venture, but has never experienced the displeasure of cleaning a pig pen or can’t tell you anything about maize price trends in South Africa.
In our experience working with clients we have come across many aspiring business owners that are thinking big (which is great), but are wanting to start big when they have minimal experience in the industry that they want to operate in. There are very few, if any, that have started a successful business in this way.
I watched a very interesting interview of one of South Africa’s most successful entrepreneurs, Vusi Thembekwayo. Also known for being one of the dragons in ‘Dragons Den South Africa’, Vusi made a point in this interview that has stuck with me. When wanting to start any business when one has a lack of experience or knowledge in the particular industry is to start small in an area of the business that you are least likely to fail in until you have gained enough experience to be fit to start your business where you initially intended.
Vusi makes an example of an entrepreneur who wants to start a chicken farm that can produce 10 000 eggs a month, employing over 100 people and selling the eggs to big retailers, such as Spar, Pick n Pay and Checkers. However, the entrepreneur has never been involved in chicken farming. What’s advisable in this situation is that rather than borrowing R10 million to start the fam that will most likely fail due to the lack of experience, rather borrow R5 000 and sell eggs in a stall. This will teach you basic business concepts, such as stock control, accounting and marketing your product. It will also help the entrepreneur understand the chicken egg market and market trends; therefore, building an understanding of the retail end of the chicken market. The business owner will also learn about what is expected in the end-product by consumers.
Once the entrepreneur has started turning a profit then they can borrow an additional R10 000 to expand the business and increase their profits. Over time the aspiring entrepreneur has gained valuable insight and experience into the chicken egg market. Once they can tell you everything there is to know about retailing chicken eggs, then establishing a chicken farm becomes an achievable goal.
The message here is to not start small and stay small. There is no value in staying small. However, you need to be patient as an entrepreneur and gradually build on your progress towards your ultimate dream of having a large business. Do not make time your downfall, rather use it wisely and have that big dream in your mind while going through the arduous journey of obtaining the tools you need to start something big and successful.
Written by Stephen Thring (M.S.S Economics; Project Manager at Funding Connection Pty Ltd)