Thriving businesses use research

Overnight success is not guaranteed

Starting and running a business is not as easy as it might seem from a distance.

People get into entrepreneurship for many reasons, including unemployment, feeling exploited by their current employer and thinking that running their own operation would be fruitful.

There is nothing wrong with hoping that being an entrepreneur will one day generate wealth for your family.

Dreams of a better life and earning big rewards have in many instances driven budding entrepreneurs to withdraw their investments to provide capital to kick start their businesses. However, you must know that many businesses don’t yield overnight success.

International start-up expert Martin Zwilling has noted that businesses such as Microsoft, Facebook, Amazon.com, Yahoo! and Google had to operate for at least six years before making a profit.

This shows that starting and running a business demands sacrifices and there are no guarantees the risks you take will yield positive rewards.

If you want to start a business that already has players operating in that space, like a creche or fast-food outlet, it might help to speak to these players to find out about challenges they faced in the initial stages.

Failing to do so could result in you becoming another statistic. Data show that up to 80% of businesses fail in the first five years.

This number should paint a picture of many challenges ahead and the need to learn how to deal with them.

An entrepreneur should also learn the skill of managing the cash that flows in and out of the business.

Failure to implement basic accounting procedures will most likely result in a cashflow crisis, leading to you closing shop.

It is also vital to determine whether your business stands a good chance of growing. Work out the target you need to reach for your business to survive – for instance, at least 100 customers – and then plan how you are going to survive if that figure proves to be difficult to reach.

Also invest time in listening to how your customers want to be serviced and take stock.