Are you ready for the business challenge

Why be your own boss?

Many entrants to business start off with very general goals and aspirations:

“I wanted to be my own boss”

“I was tired of taking orders from someone else”

“I want the freedom to do my own thing”

“It just seemed like a good idea (almost a whim) at the time.”

Unfortunately, these are often the wrong reasons and their businesses are destined to fail!

The only reason for going into business should be that you have a great business opportunity, or a concept that neatly fills a gap in the market and is feasible. You need to be able to back this up with good commercial skills and a burning determination – and the diligence – to make it work. It’s also handy if you’re an excellent communicator, a good time manager and either happy to work alone or understand the value of delegating. And that’s just for starters – the full set of skills that you will need is much longer.

But you need to be realistic, too. You need to evaluate your skills and determine whether you have all the ones you’ll need, or whether you can develop them (or hire someone who already has them).

Evaluating your suitability for owning a business is an important step that you need to face. In evaluating not only your desire for a business of your own, you’ll need to consider what’s involved in running a business, and what roles you will have to play as the owner/manager.

Finally, you also need to have a good understanding of what you want to get out of your business. More time with the family? A stable income? Something to call your own? Simply having a desire to succeed isn’t enough – you need a goal to measure your success with.

Once you have faced up to these tough but important questions, you will be ready to move on to the next step – enjoy!

Responsibilities of business ownership

Business ownership is not just another job. It’s a totally different lifestyle. You have to ask yourself whether you’re ready for a complete commitment to the success of your business. As the owner of a business, you have a considerable responsibility – to customers, employees, the community, your family and importantly, to yourself. You may have less time for your personal life. You may need a loan and need to use much of what you own as collateral. If you are willing to make these sacrifices, then let’s move on to some of the advantages and disadvantages of business ownership.

Advantages

You’ll be your own boss and make all the crucial business decisions.

You may be the boss of other people.

You’ll have the chance to put your ideas into practice.

You’ll learn about every part of the business and gain experience in a variety of areas.

You’ll get the opportunity to work directly with your customers.

You’ll have the personal satisfaction of creating and running your own business.

You’ll be able to work in an area you really enjoy.

You’ll have the chance to build a nest egg for retirement.

Disadvantages

You may have to take a large financial risk.

You may have to work long hours with little chance of taking time off.

You may end up spending a lot of time attending to the details of running your business and less time on the things you really enjoy.

You may find that your income is not steady and that there are times when you have no income at all.

You may have periods of self doubt and become anxious that you’ve made the wrong decision.

You may have to undertake unpleasant tasks, such as firing staff.

You may have to learn many new disciplines, like bookkeeping, production planning, advertising and promotion, and inventory control.

The many roles and tasks of a business owner

You’ve probably heard people complaining about being overworked because they have to juggle two or three different roles in their job. Most business owners would be happy if they only had to juggle two or three roles! Here are some of the roles and tasks a business owner can expect to be involved in:

Tax collector: you’re responsible for collecting and paying GST on goods and services sold and on purchases for your business. You will also have to collect personal income tax on behalf of your employees and pay tax on your profits.

Manager/boss: if you have employees you will be responsible for all of the human resources related functions, including recruiting, hiring, firing, wages and salaries, coaching, counselling and record-keeping. Remember, it is the lack of management skills rather than the lack of technical or sales skills that is one of the major contributors to business failure.

Marketing executive: you’ll not only be responsible for planning your marketing and advertising campaigns, you’ll also have to carry them out. You may have to write advertising brochures, do market research, visit existing and potential customers, and generally network and stay in touch with what’s happening in your industry.

Accountant: even if you have an accountant, you’ll need to know which records to keep and how to keep them. You’ll also need to have a good understanding of your finances to enable you to make effective decisions.

Legal adviser: even if you have a legal adviser, you’ll need to know a lot about the law, including understanding and drafting contracts, and knowing your legal obligations to staff, customers and suppliers.

Business planner: you’ll need to be able to plan and execute necessary changes to your business to reflect changes in the business environment, competitors or even government policy.

Debt collector: when customers don’t pay, you’ll have to collect from them. You’ll need to understand what you can and can’t do, and when to give up.

Market researcher: before you start you’ll need to find out who your customers are, where they are and what they want. An existing business also needs to conduct market research to gauge customer/client satisfaction of existing products and services, to gauge interest in a new product or service, or to test the reaction when planning changes to an existing line.

Technology expert: you will probably come to depend on your computer and other equipment and you may need to fix them if they break down (which will usually be at the most inconvenient time).

Receptionist/secretary: even if you have administrative help, you’ll inevitably need to get involved with filing, answering the telephone and doing the banking.

Customer relationship manager: essentially, customer relationship management is vital to ensure that customers receive good service. And giving good service doesn’t just mean being nice to the customers when they are parting with their hard-earned cash. It requires taking an interest in the customers or clients before they make the decision to purchase products or services from you. Secondly, it requires showing a genuine interest in a customer or client during the time you are in contact with them. Lastly, it requires selling the quality product or service to the customer in a professional manner. As an added step, excellent customer relationship management requires you to follow up, with genuine interest, your clients or customers, and selling yourself for the next opportunity or a customer’s recommendation.

Product or service development expert: while service and customer focus are important, your business is unlikely to be successful without a product or service that is unique or totally compelling. Make sure that whatever it is you are selling, it can be tailored to suit the individual needs of your customers or clients – if the product can’t be, maybe the service associated with the product can.

Do you have what it takes?

If asked whether they have what it takes to run a successful small business, most people who are interested would answer “yes”. The purpose of this section is to help you evaluate your strengths and weaknesses, so you’re in a better position to decide if you have what it takes to be a successful business owner.

Successful business owners know their own strengths and weaknesses. The key to their success is often the fact that they have built on their strengths and compensated for their weaknesses.