Daily, entrepreneurs around the island are starting up businesses. Many of them tend to be under-capitalized and others suffer demise before starting since they just can’t get the needed capital injection. It got me thinking about it a bit more and I realized that we are just getting into business without truly understanding the strategies and techniques available to us when we are in business. In other words, it is like playing dominoes with a matcher [someone who matches the dots without understanding the strategies based on the information of what was played and by whom]
The majority of people seeking start up capital for their businesses tend to do the following:
- Use their own money – this is just the worst approach that provides absolutely no leverage for the business owner.
- Borrow from banks – or at least try. Most banks will lend money for doodads more easily that they would for starting a business where the owner has no track record of running. At least when you borrow money for a car you need to show proof of driver’s license.
- Borrow from family – most family members especially decide that they will never see that money again. There are little to no accountability measures put in place; the beginning of bad habits if left unchecked.
Many entrepreneurs will bring their skill / gift to the business; what many of them lack is an understanding of how their revenue is made and a clear idea of where it comes from. It almost seems that many entrepreneurs have this sort of wishful thinking. Hoping that their business will be successful.
But what can entrepreneurs do?
- Allocate some time each day to work on their business rather than constantly in their business.
- Create enough avenues for their revenues to reach them.
So many entrepreneurs are so myopic that they are focused on their product / service and its delivery. They see exactly how they will deliver their offering, however especially in smaller economies like ours, they do not examine the various ways in which they can earn their revenue. In short, their revenue channels are too limited.
Just a recent visit to the supermarket revealed why they seem to remain in business. They had lots of revenue collection points all streamlined to be passed before the customer left the store without too much of a wait on the customer’s part. They also know their stats and can identify your savings, if any, right on the receipt the customer receives.
Many entrepreneurs do not adequately plan for the sources and uses of funds within their businesses. Far too many operate in crisis mode giving rise to stress, which begins the downward spiral in many instances. Sit and carefully examine if you have enough cash to satisfy your needs and wants. You may be surprised that you need to get moving just when you thought you could rest on your laurels.