THREE BLIND SPOTS IN ENTREPRENEURSHIP THAT NO ONE WARNS YOU ABOUT

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FOREWARNED IS FOREARMED.

I enjoy listening to Power FM, because their line-up of DJ’s consist of the crème-de-la-crème of SA talk. From the legendary former SA FM host, Tim Modise to One day leader presenter Masechaba Lekalake, not forgetting  the likes of the sultry radio star Azania Mosaka and the husky-voiced liberal Lawrence Tlhabane as well as Siki Magabadeli to name but a few of these big names. There’s no denying  that even though Power FM is the new kid on block, it is taking over the airwaves like it’s no bodies business.

Power FM sprouted out of nowhere. It literally came out of the woodwork to become the power house, no pun intended that it is now renowned to be.  My favourite show is Power Talk with Eusebius McKaiser. His topics of discussion are so captivating because no topic is off limits and no mystery is left unravelled. It’s a pity that I don’t get to listen to him as often as I would like since the only time I get to listen to the radio is when I am driving to a meeting or when I am early to a meeting and waiting  in the car to pass time.

When Power FM was launched, you could tell that it landed a hefty investment deal because of the names involved in it – Ndalo Media, led by Khanyi Dhlomo, and Zico, led by Sandile Zungu are part-owners of the MSG Africa Investment Holdings Consortium (MAIHC). MAIHC also owns Limpopo-based Capricorn FM. It is clear to see why the founder and chairman of Power FM, Mr Given Mkhari decided to go big, because he has the wallet size to match. If Dhlomo was single-handedly able to strong-arm the National Empowerment Fund out of R34 million seed-capital for her high-end Boutique, Luminance imagine how much more paper the trio syndicate were able to put together.

Now, the same cannot be said for a first-time, no-name brand entrepreneur with the same level of ambition, drive, plan and focus. Without a name and a track record, you are literally invisible to the powers that be; you might as well be non-existent.  This is the inspiration behind this article;  It is about reawakening the fighter in us and reminding us that  getting to the top will take a lot more than a sound business plan and mastering the art of networking. Getting to the top of the game is about understanding that unlike Power FM, most start-ups will not begin their journey with a pool of large investments and access a network of power players who can open unimaginable doors for you.  The secret to how high you go is not in how many more investors and development finance institutions’ doors you can knock on, hoping to get a ‘Yes’, but your success lies heavily in how well you will use what you have to create something of the best quality within your own circumstances..

The success of KICKSTART Magazine has taught me that it is not where you make your product that attracts customers, what matters to your customers and investors, is the quality of your output. This brings us to the first hardship in entrepreneurship that no-one warns you about or prepares  you for , namely, that, in the majority of cases, you are going to have to do like Drake the Canadian Rapper and start from the bottom to get to where you want to be.

  • Starting From The Bottom

If you are trying to keep your overheads as low as possible, it only makes sense that you start running your business from your house or your flat. Entering into office rental agreements or investing in a brand new car without knowing whether your business will thrive or not, is like drinking all your water before taking a 4 hour hike in a desert.

There are many advantages to running a home-based office and one of those benefits is the lack of a commute. Running a business from your home saves you petrol money or bus fare depending on the mode of transportation you are using.

Many small businesses find themselves having to drive to their client’s offices, so there’s no point in having a fancy expensive office if your clients prefer that you go to them. However working from home is a problem if it requires you to bring your customers to your home office and the place is unkempt. It goes without saying that your home office,  should be kept neat and professional

  • Attracting New Business is a Process

It will probably take weeks, sometimes even months before that cheque from the first customer enters your bank account. Some people are lucky enough to go into business only after they have secured their first customer or long term contract but for the majority of small businesses out there who are inexperienced in sales and marketing, the road to getting the first order will be a long and tiring one.  This is because it will take time for you to establish yourself, network and attract new business because people prefer to do business with businesses that have a long term established staying power. Unfortunately when you are new, it’s hard for people to trust you because the quality of your work is untested. Unfortunately, you still have to go out there mingle and market with an empty stomach but smiling as if you’ve just had a full hot meal. That’s hard to do because your confidence takes a serious knock, but you still have to put up a brave face and network with a big smile on your face.

The time it takes between setting up a business and securing your first client and having money in the bank is the number one reason why small businesses fail as soon as they launch.  A lot is expected of them way too early because of the tenderpreneurial culture that’s happening around us. With tenderpreneurs, they register a business today with R2000 in their personal bank account and tomorrow, they have a 2 year government contract worth R2 million without references and a track record. It makes the rest of the sweat-and-tears entrepreneurs look like they are getting it right, as if they are not working hard and not networking enough. If only angel investors knew how hard it is out there, that the one that makes the most money in South Africa is not often the most talented, it is usually the one with the best connections. Comparing tenderpreneurs with sweat-and-tears entrepreneurs is like comparing samp and pasta.[N1]  Totally unfair. They are both starch but one cooks in 2 minutes while the other which is samp takes hours to cook properly. To an angel investor, investing in pasta makes more sense because the return on investment is quite quick as compared to investing in samp. One packet of pasta can only feed so many people whereas one bag of samp, can feed the entire family and they’d still be feasting on the left overs for another day to come. It’s richer, so it stays longer in your tummy and sustains you for longer whereas with pasta, not only is it more expensive than samp, but you have to cook a whole lot more to feed a small number of people.

The best way to avoid business start-up blues is to start your business on a part time basis while you are still employed.  Managing a business on the side reduces the pressure on you to become profitable too soon.  However you have to make up your mind to quit your job once the business becomes profitable.

  • Funding Doesn’t Come Easy

Raising capital is an impossible task when you are a start-up business.  Many young people think that a sound business plan is the key to raising funds for their small business and that once they have their business plan together, that funding will follow in a heartbeat. Little do they know that it usually doesn’t happen this way.

There’s been many instances where aspiring entrepreneurs, put in all their time, effort and money into creating a business plan, only to be flat-out rejected by a small business agency. What they have not been told is that, as Gayton Mckenzie highlighted that “No matter how good your plan is, most people will not give money to a young business person- not while there are so many tried and tested old dogs out there.

This is empowering because now, you are not going to want to slit your throat the moment you realise, the money isn’t coming. This means you have to become resourceful. You have to come up with other ways to raise the money you need even if the alternative revenue generator is not linked to your original vision.  This is what I call hustling your way to the top. You have to be innovative and think on your feet to make your small business efforts a success.

You can alleviate all of the above three blind spots by adopting multiple streams of income approach.  Every small business needs to have more than one revenue stream in order to stay alive because without diversification and developing new product offerings to attract new markets, you may be setting your own business up for failure. One revenue stream is just not enough to sustain you.

Remember, the reluctance of the finance institutions to lend small businesses money is based on the awareness that up to 80% of small businesses fail within 5 years. This is a well known fact that cannot be denied. Then ask yourself, why would they lend you money when they know that the odds are that you will fail and won’t be able to pay them back? If the tables were turned, would you still lend a small business money? I wouldn’t!

So, before you start judging financiers and saying this is not fair, know that complaining about the problem won’t make it go away and it will only discourage you and slow you down. Focus on starting small in order to minimise your operating expenses and by starting small, this mean no long term lease agreements in the beginning. Start within your means. If you don’t have a power wallet, don’t try and be a Power FM. Think Soweto TV and start where you are with the little that you have.

With a good business plan under your arm and patience as your virtue, you will rise – it’s only a matter of time. In the meantime, put all your energy into producing the best quality product your business can afford. It won’t be long, before the right customers are attracted to what you do. Soweto TV didn’t have to change who it was to attract the right advertisers, it simply sourced out innovative advertisers and partners who believed in their vision and wanted to be part of it. It’s as simple as that.


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About Author

Tuming Lee Magongoa simply known as "Tuming Lee" is firstly an award-winning entrepreneur, secondly a multilingual children's book publisher and magazine publisher and thirdly, the Editor of KICKSTART Business Magazine. Her company Tuming Lee Media (TLM) does not only provide grassroots entrepreneurs with knowledge to start their own businesses in the pages of its magazine, but it also gives success classes, business classes and innovation classes to this very market. The decision to supply entrepreneurial education was based on the premise that 70% of businesses don't make it past year one, despite all the information that's available on the internet, in books , on TV, on radio and everywhere else. She discovered that the high failure rate is caused by the failure of entrepreneurs to apply the knowledge they gain. And that's where TLM comes in, to help newbies with the organisation and application of business knowledge in a way that will unlock the entrepreneur's full potential and yield positive results.

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