Many people intending to go into business usually ask me what is the one thing that is most important. My answer in the recent past has been consistent. START SMALL.
Unfortunately not many people want to hear this, because the reason we go into business is to become rich and to build a BIG humongous money making business.I find it amusing how almost every startup has Safaricom ,Barclays bank or similar big companies on their hit list. They all seem to know someone on the inside who has promised them a contract. 6 months down the line the contract is elusive, and if it comes through they get paid in 120 days,deep in debt and disillusioned.If you are keen on starting big, you might be better off walking into a casino and trying your hand there. Your chances of riches in the casino might be higher,and if you lose all your money, you will not have auctioneers and angry unpaid employees at your doorstep. The only place a business should start big is in your head, DREAM BIG!
The reason I give this advise is because if you have not been an entrepreneur before, the biggest mistake you can make is to go into a big investment right away. These come in the form of plush offices with new furniture, computers,gizmos,randomly hired staff and unnecessarily high rent. Sometimes the entrepreneur will even buy a sleek car on loan to impress their potential clients. Even if you have saved up millions of shillings, or have access to large amounts of money through a partner or investor, I still insist that you start small. Heres why…
Entrepreneurs begin with very unrealistic assumptions about the market. In fact,those who come from big companies and have identified gaps in their industry , are likely to make the biggest mistakes.They bring their big company mentality into their small business. What they dont realise is that their small business is a very different ball game from the big company they worked for, and in a few months the reality begins to sink in. They soon discover that they dont have the bucket loads of cash to waste on lunches that their former employer had, they dont have the trust of the clients, they dont have the brand name and legacy and sometimes, they dont have the capacity to deliver on the same scale.Their may even have their golfing buddies quickly abandon them and even if they move with 1 or 2 big clients, they soon realise that they have to work even harder to attract and retain more clients.
Starting small mitigates unseen risks. Starting small has no prestige in it, and definitely doesnt promise big money in the short term. But it can save you a lot of problems in future. If you want to start a restaurant, before you go and put millions of shillings into a facility, start with outside catering for your friends and see if they like the food. If you want to start a marketing agency,nothing stops you from doing trial jobs while still employed just to see if people are happy with what you do. If you want to start an airline , do what richard branson did and hire a plane and see if you can do one route succesfully even if its from Nairobi to Lodwar several times. The beauty with such low risk ventures is that if something goes terribly wrong, you have the opportunity to rectify it quickly without causing much damage, and also you can manage the growth without losing a lot of money and making lots of enemies in the process in the form of disappointed clients,re-possesive bank, unhappy employees or competitors out to destroy you and your descendants to the third and fourth generation.
2 things to keep in mind today
1. If you are employed , start on a part time basis on weekends and after work or during holidays before quitting.
2.If you were brave enough and already jumped ship ,look for an unserved market or a gap where the industry you are venturing into is doing a bad job. It could be a fully fledged product or service, or a support service to the industry. For example, if you want to venture into insurance, you could either start selling insurance directly or you could go into training insurance sales people if you identified that every company did a bad job in training their people. If you want to go into construction, you could buy a rare piece of construction equipment and hire it out to established players or offer a rare service as a subcontractor to the big companies.If you want to start a school, how about tutoring the neighbours kids and see if their grades improve.
Starting small may take years to yield fruits, so you could do something else in which you have a competency to supplement your income before your company takes off. Lecture at a college, be a freelance consultant to your former employer, be a part time employee at your industry lobby association. Be creative, find something.
There is definitely many people who may start big and make it big ,but I usually find that they either have large sums of money to kickstart them, have venture capital backed by expert advise and management from the investors or have an experienced business partner who has cut his or her teeth in business and therefore can help them navigate the terrain. The rest of us mere mortals have to sweat it out for years. Sometimes one is just lucky to step into something new that is just about to take off that makes them extremely wealthy in a short period of time.Early telecoms dealers made billions by being the first movers in the new industry. However, this is normally the odd story rather than the norm.
Finally, be proud of whatever you do. Dont look down upon yourself. Every great company today started small in a public phone booth, garage, SQ, street corner or at a kind friends office kitchen. My business partner told us today that the only difference between a small elephant and big elephant is time and food.