30/08/2023
By Llewin
What is the greatest challenge when coming up with a Business Idea? I did a poll and this was the outcome;
1. Capital Requirements - 46%
2. Return on Investment - 29%
3. Day to Day Management - 20%
4. Competition - 5%
* Capital Requirements - Capital is very important when it comes to starting a Business. I have seen some motivational speakers downplay the importance of Capital, however, those who have been in Business will tell you that if you can't cover your costs (such as rent and salaries) you will eat into your stock and within no time your shop will be empty - This is the greatest challenge I faced when I ran my Electronics Shop,. I had very little capital. Important aspects such as marketing also require good capital so it is important to factor in such costs.
* Return on Investment - Some people insist that they do Business for fun and passion. However, we all know that a Business that makes no money leads to frustration, debts and closure. We are all in Business to make money and before you start a Business you need to ask yourself the potential returns and if it meets your needs. There are some Businesses that you can do very comfortably but the returns will be too little compared to your age, lifestyle and family set-up - I was in this situation when I sold flashdisks and memory cards - so don't just do any Business, do a Business that will get you good returns.
* Day to Day Management - This is one aspect that many people overlook. Who will run the Business? When I opened my first Business right after high school (selling sodas), I was working at a carwash so I employed my former classmate to stay in the shop.. I had no time for the Business and the Business ended up failing very quickly since he felt trapped in the shop and I had no way of knowing whether he's at the shop or not. If you are starting a Business, especially a sidehustle, you need to put necessary systems in place to ensure that operations run smoothly whether you are there or not.
* Competition - When I was starting my Electronics shop, I thought competition had no impact on my Business. I was wrong.. some people distort market prices and end up acquiring most customers. Location is also very important..most of my competitors had shops close to the main road and the bus stop so clients would buy from them once they alight the buses in the evening as they came from work.. by the time they reached my shop they had already bought everything they need.
There are also other factors you need to consider such as Government Regulations and Licences, duration of the Business, staff etc.. so before you get into Business, take time to think it through. However, don't overthink because you might end up not starting at all.. you will figure out most of the things along the way.