Many people have a wish to start their businesses, but they have no idea where to start, or how to start. One of the main thing that stops most people from starting a small business is the idea of capital. People think that the most important thing in starting a business is capital, which is the money needed to start up.
Raymond Ackerman of Pick and Pay Chain stores says Capital is only 10% of what you need to start a business, your gut is 90%.
While capital may be important in starting a small business, it is not the most important step to start. The most important step in starting a business is a will to start. You may have a great business idea in your mind however this idea requires lots of money to be able to start. The question is how do you start with little or no capital?
The solution to starting a business with little or no capital is to start small. If you have a great business idea, break it down and find ways of what the first thing you can do in order to be able to start small. Starting small allows you to be able to implement your business with little capital. Let us look at an example to illustrate this point. Assume you want to start a business of producing and selling eggs. You then do your research you realise that to produce the number of eggs you want, you will need to get 100 chickens to start and then you need to get feed for the chickens. You may need to get a property on rent where your business will be based as well as a chicken hut, where your chickens will be accommodated and the necessary equipment to run this business, you may also need an assistant to assist you in running this business. Your business plan tells you that you will need a total of R100 000 for the first 6 months to run this business. This is not a small amount of money and trying to find ways to raise it can take months or even years and end up being discouraging.
In this instance, starting small would mean that instead of starting with 100 chickens, you can start with 5 chickens, buy the feed for the 5 chickens, this will bring down your starting costs drastically, it would be easier to manage the production of 5 chickens from home on your own, which means at this point, you will not need to rent space for your business, nor would you need to pay a salary for an assistant. The money required to start your business in this way will be less than R1000. The eggs production from 5 chickens will obviously be in much smaller quantities as opposed to the eggs production from 100 chickens. The important thing is that your business will have started, and you will be learning important lessons in the process. In businesses there are lessons can only be learned practically once you start.
You can start by supplying eggs to a few clients and start building your client base from there. The key thing in starting small is to set goals and not lose sight of those goals, as you make money, it’simportant to put that money back into the business to grow the business, buy more chickens, and equipment with the money you make from the sales. Of greater importance is ensuring that you service your clients in such a way that they will refer more clients to you and that they will also keep coming back to you for repeat business.
Starting small is possible in any business, whatever business you want to start, ask yourself how you can break it down and ensure that you start small with as little capital as possible.
Written By: Nozipho Ndlovu – 082 752 2673
SMME Bootcamp Facilitator – Azmon Nimrod Consulting