Starting your own business isn’t easy. South Africa has one of the highest failure rates of new SMEs (Small and Medium Enterprises) in the world. According to an online article in Moneyweb, approximately 70% to 80% of small businesses fail within the first 5 years. Despite this, SMEs are considered to be an important contributor to South Africa’s economy, providing employment to about 60% of the labour force.
To make a business successful, hard work is not only required, its expected. Regardless of the type of business you own, it’s always a constant learning experience. Finance is, of course, a major part of starting a business, but it’s not the only part. Many business owners underestimate the capital needed to start a business. In a bid to stay ahead of the competition, businesses often price products and/or services at a lower rate to entice customers. While this may work for a while, a successful business needs good revenue.
There’s this quote “If you fail to plan, you plan to fail.” Opening a business without doing any research, whether it involves location, the product or service you’re providing, or even the kind of image you want to project, is a mistake many new business owners make. Be aware of your strengths and weaknesses. Being comfortable in the knowledge that your employees are skilled or has a good work ethic and understanding of the business is also important.
There are also a number of government initiatives who supports and recognises the importance of SMEs, helping them secure funding through various financial enterprises. There are so many mistakes new business owners make, and while it’s true that we learn from our mistakes, how many of us can afford it? Know what you’re getting yourself into. Educate yourself on what you need, how much you’re going to need and how often you’re going to need it. Be prepared.