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Starting your own business

Starting your own business

Many young people are thinking of starting their own business as a means of earning an income. Many want to do it because they do not want to work for a boss. On the other hand, many others need to do it because they have to earn an income to survive.

Whatever the reason may be, there are some things you need to know that can help you if you are thinking about starting and running your own business.

Often young people find that the most challenging part of starting their own business is the early phase - the entrepreneurial phase. Where do you start? Where do you get information? Where do you get ideas?

The first step starts with YOU! You need to assess whether you have the qualities and skills that can help you run a business successfully. Once you understand yourself better it will be easier to decide what you want to do.

The second step is to identify business opportunities. Once you have identified a business opportunity, you need to prepare a business plan to help you determine what you need to start and run your business.

Finally, you can register and start your business.

Are you entrepreneurial?

People who are able to identify opportunities and turn them into successful businesses are referred to as entrepreneurs.

What is an entrepreneur? What does it take to be an entrepreneur? How do I know whether I have the potential to be an entrepreneur?

An entrepreneur is�

someone who identifies a need and develops and implements a way of meeting that need. Meeting the need usually involves the creation of a small business enterprise. An entrepreneur is someone who is always looking for new opportunities!

Entrepreneurs have the ability to identify new products or services, use new ways of producing products or services and develop new ways of marketing their ideas, products or services.

Entrepreneurs are good at finding the resources to take their idea and turn it into a winning business.

Studies have shown that there are some attitudes (your outlook on things), characteristics (the way you behave) and skills (your ability to do something) that are found more often in those people who turn business ideas into successful business opportunities.

Assess Your Entrepreneurial Ability

What are these entrepreneurial attitudes, characteristics and skills?

Developing a business plan

Having a great business idea is only half the journey to achieving success in your business venture. The other half is executing or implementing your idea. Implementation starts with PLANNING! Planning is the process of putting together the different pieces of the puzzle from the time of identifying the opportunity to its eventual implementation.

The process of writing your business plan is as important as the outcome itself. Why?

Well, while you write your business plan you are thinking, researching and identifying problems that your business may encounter. It therefore, helps you to understand your business better.

There are simple steps you can take to help you organise the activities for writing the business plan.

Firstly, you need to decide what the objectives are for writing the business plan. This will help you to clarify what you need to put into the business plan and who it is aimed at. Knowing why and whom you want to reach will in turn help you to focus your research and activities.

Secondly, you need to do research. The research is a very important part of writing the business plan. The quality of your research will have a big impact on the quality of your business plan. For this reason, you need to spend as much time and gather as much information as possible in the research process.

Finally, you need to pull together all the information you have gathered and write the business plan.

Young People and Business Finance .

Identifying opportunities

People turn simple ideas into business opportunities almost every day!

How do they do it? Where do they get the ideas? Are those people that think about ideas and turn them into business opportunities different from you and me? Click here to see what you can do to come up with your own ideas.

Assessing the Feasibility of Your Idea
Develop Your Idea
Generating Ideas

Starting your business

The two most important considerations when you start your business are:

The registration of your business; and

Running your business.

Business registration

Before you register your business, you need to decide what form of business you will operate. There are different forms of businesses you can register. It includes:

Sole proprietorship

This form of business is a sole trader where there is one owner. The business trades under the owner�s name. The advantage of this form of business is that there are no formal documents required. The major disadvantage of a sole proprietorship is that it does not have a limited liability. This means that the owner�s assets are not separate from the business and they can be attached should the business go bankrupt.

Partnership

A partnership is a business consisting of at least of two partners and no more than 20 partners. Each partner is expected to contribute money, skill or labour. Like a sole proprietorship, a partnership does not have limited liability; every partner is personally and jointly liable for any debts. No formal registration is required to form a partnership, however, a partnership agreement is essential as a guiding and management document between partners. One problem with a partnership is that, if one member resigns or dies, a partnership dissolves. This means that you have to start from scratch in forming another partnership.

Close corporation

A close corporation or CC was created especially to cater for small businesses. A close corporation must have a minimum of one owner or a maximum of ten owners. Members of close corporations enjoy limited liability. Registration of a close corporation is simple and less expensive as compared to a company. Audited statements are not required, only production of financial statements once a year.

Company A company is more complicated and has more administrative formalities and legal requirements. There are three types of companies namely a public company, a private company and a Section 21 company.

Public companies are usually large businesses such as Telkom, Edgars and Pick 'n Pay. They are called public companies because the public or shareholders who have bought shares in them own them. The members of a public company should not be less than seven and it must have at least two directors.

A private company is different from a public company in that it cannot sell shares to the public and therefore cannot list on a stock exchange. Members of a private company are between 1 and 50. A private company has to prepare audited financial statements, but unlike a public company it is not required to publish them.

A Section 21 company is an association not for gain or profit. Most non-governmental organisations (NGOs) are Section 21 companies as their purpose is mainly developmental.

Once you have decided what form of business will operate, you need to register your business. The registration is a two-step process.

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