For the last 12 years, I have worked with hundreds of small businesses across the world learning what things work, and what things work even better. Over the next few months I hope to share with you what makes a business successful and how to go about starting your own.
Last week the Unemployment rate was announced and it’s the highest figure reported since 2008. Our economy and businesses are struggling, people are getting retrenched and the situation appears to only be getting worse.
There is, however, a perfect solution; more people should start small businesses. Entrepreneurship is on the increase and fast becoming a worldwide trend but the success rate for those entrepreneurs aren’t too great; 9 out of 10 businesses fail within the first 12 months.
One can go on for days about what the government could do differently to help entrepreneurs, but the reality is they are trying their best. If you do own a small business, I urge you to look at the following:
- Small Business Corporation Tax offers small businesses the opportunity to pay a reduced tax, offering savings up to R100K p/y.
- Small businesses qualify for an Employment Tax Incentive (ETI) where the Government encourages them to employ young people.
It may sound complex but fear not your accountant can assist you with this very easily.
If you don’t own a small business yet, and you’re considering starting one, allow me to help you avoid making the biggest mistakes most new entrepreneurs make, which is to start off TOO BIG.
New entrepreneurs very often resort to commenting that a lack of capital has held them back, and its plausible if their intention is to run a large business with big machinery and a healthy staff compliment. These large components require a lot of capital.
If your intention is to start your business that way; then there’s a good chance that you shouldn’t be in the business world. New entrepreneurs today can’t and aren’t able to start that way.
Entrepreneurs need to start small; find their first clients and prove their products/services are valuable. Once they’ve build up enough capital they can align and adjust their products/services accordingly and growing organically into successful business. If they choose to expand and have a sound reputation, people will want to invest in them, the proof is in the pudding.
Should capital be required by then; let’s be honest Banks won’t be the answer. New businesses seldom are able to secure loans, they have a better chance of securing a personal loan or being offered financing if they have some assets to put up. Banks don’t want to take chances with new entrepreneurs – End of story.
Small business ideas have a greater chance at success when they are scaled down. Should the requirement to raise some money arise, I would urge owners to save up, use their pension funds, credit cards, lend money from family and or get friends to invest. Do whatever you must, but the answer doesn’t lie with the bank.
Forget the big dreams and start small, try to generate enough funds on your own first and you’ll have a better chance succeeding. The world of entrepreneurship is challenging but the reward of freedom and success makes it worthwhile.
Visit my website at www.marnusbroodryk.com and let’s discuss small businesses and the interesting world of entrepreneurship.