Therefore, if you have plans or ambitions to start your own business at some point, it is important to start as early as possible.
The nature of the business you start will vary depending on your capital, knowledge and skills, locality, age, and economic opportunities at the time, among others.
However, there are basic things that are a common denominator. Things like clarity of vision, a business plan and basic business management and financial knowledge are a must-have for all entrepreneurs.
Four things are singled out from the many things that you need in preparation to launching your business.
First, you need basic management and financial literacy. These skills can only safely be acquired through learning. Acquiring them through experience is very costly. You don’t really need to study to be an accountant, human resource manager or a marketer to be successful in business. You only need to know the basics and where to get help from professionals when in need.
Most novice entrepreneurs lose out on a lot due to their ignorance or inability to interpret basic reports or even tell the difference between a professional and a quack.
Second, increase your income. This enables you to accumulate capital faster to ensure your business is not starved of cash right from inception. You can increase income by acquiring skills that increase your ability to earn more.
Third, cut waste spending. One of the regrets that most old people have is how they spent their money when they were young. Financial success depends more on how you use the money you earn; the amount you earn doesn’t matter that much. Therefore, even as you focus on increasing your income, don’t lose sight of how you spend your money.
Financial indiscipline and wasteful spending are cited among the top reasons for business failure.
Fourth, save and invest. If you control your spending and ensure you spend less than you earn and only on important things, you will definitely have money to save and increase your money with time.
Investing money is, however a major challenge to many people. If not done with diligence and sobriety, there is a high risk of investing emotionally and being easy prey to fraudsters.
The golden rule is to focus on the return of your investment before the returns on your investment. In other words, the safety of your money is more important than the anticipated gains.
Many people have lost money by investing in sugar-coated deals such as pyramid schemes, commercial papers with very high returns and producing things with a non-existent market such as quail farming.
In any financial dealing, it is said when the deal is too good, think twice. Always remember success in business is a journey and if someone promises you a giant leap, be cautious.
This article was first published in The Business Daily on January 21, 2020.