5 Things to watch out for when starting up
5 Things to watch out for when starting up
5 Things to watch out for when starting up - Starting up a business is a decision that is tough for anyone, even for the seasoned entrepreneur it still takes quite some thinking and considering before you make the leap. When an entrepreneur decides to take the entrepreneurial risk, it is always a calculated risk that the investments placed in it will be able to generate profits for the investor himself.
For the first timer there are many things that you should be aware of because you are not familiar with how things can change for the worse and what you should watch out for when you first run into certain problems. Here are some of the common items and the not so common items that you should watch out for when you beginning on your entrepreneurial journey
Always make sure you have a proper understanding and contracts with your partners
People feel comfortable working with those around you, especially friends, but this is also one of the things that can lead to the end of a friendship. Make sure if you are working with your friends on a partnership in a business, you should be aware of how much funding is each going to contribute, when to contribute, what are your responsibilities and make sure there is some kind of contract that keeps both of you or all of you in check. Money and Commitment levels are the two main things that can cause unhappiness when working with someone else so set this straight and set out targets or goals together to make sure everyone is on the same page.
Setting boundaries and limits that you have for the business and your partners
Are both expected to work 24/7 on the business? Are both expected to not take breaks and to work until the business turns a good turnover? Business life is tough, you might not be able to spend time with your loved ones that often anymore, you might even have to rest in the office to rush out all the work that need to be done. If you have expectations for the other person, voice it out so that he/she can change and or make compromises if it helps the business and the partnership relationship. This things are best to have been pre-agreed upon and that would help you solve the headaches that might come about in future.
Discuss the ideas and topics with someone more experienced
You might have a great idea (or so you think), always be prepared to share it with someone who has more experience than you in the business world. Not everyone is going to take your idea and run with it, especially a more experienced entrepreneur with his/her own commitments and businesses to run. Get ideas, get opinions, dont get disappointed, work on the suggestions and improve your product so that you offer the best to your clients. Your senior might also be able to help you realise similar products in the market and point you out on shortcomings in your design, that saves you time and energy that you might spend trying to create something that might already have been around for many years.
To fund or not to fund
Many entrepreneurs prefer to slog their way up, no funding at all! But with this time and age, funds are everywhere. The world is flushed with cash right now with the tumbling stock market and unstable real estate markets. Money is available if you dare to grab it. Don't fear losing some control of your business, because without this cash you might not even be able to take your idea off the ground and this is something you do not want to experience and miss the boat on.
Depending on your industry and also your experience, you might be able to get funding relatively easily and also a free mentor coming on board to help you with contacts and suppliers/vendors.
Know when to pull the plug
Not all businesses will end up in millions or billions, some fail, in fact, many fail. But what is worse is to hold on to something that is hurting you and still trying to make it work. Cut it lose when you realise that things are not working. If you are not going to spiral down into something even worse, there is always a time when you can come back to the business world again and try again. But if you hold on, take loans and try to finance something that does not work it might hurt you for life. Know when to let go.
Business can be something that makes a big change in your life, for good or for worse but you only live once (YOLO), do something that you can be proud of when you are young and have the energy to pursue. All the best in your endeavors!
Koh Management is a corporate services company providing financial and management accounting related services as well as secretarial and management services.