The skills that you require when you decide to start a business are very different from the skills you require when you are simply investing in an existing business started by someone else.
It is harder to start a business and run it successfully, particularly if you live outside the country. You must be very cautious, when doing this.
Here are a few simple things that you need to think about, if you are planning to start a business back home in your country. This is not intended to be exhaustive, but just to help you with your process:
#1.
How do you plan to fund it?
If you are planning to use your savings, as most people in the diaspora do, don’t over stretch yourself. By this I mean don’t put all your savings into the venture in one go. Start small, and go slowly.
Even if you really know the business area, you are going into, don’t go into it with everything you have.
If you are planning to borrow either where you are working, or back home. Be very careful, and always keep at the top of your mind that you have to pay it back.
#2.
It’s important to understand the business you are going into. Don’t just wake up and say, “so and so, made money, so I will also try this.” It must be something you fully understand better than anyone else.
# 3.
Spread the risk.
Even if you have all the money necessary. Try and get some trustworthy partners, who are also willing to invest something. As we say in business get partners who are prepared to put some “skin in the game”; in other words, they must be prepared to risk their own money as well. If you get the wrong partners, its “game over”, choose carefully.
# 4.
Find competent people to run it.
In many ways this is the toughest thing you will ever have to do.
If you are really serious, the best thing to do, is to go back home and run it yourself. I’m serious now. Otherwise just invest (I will talk about that in the next post).
#5.
Be prepared to lose everything:
You will not be a successful entrepreneur if you are not prepared to lose your investment.
If the project falls over, don’t behave as though the sky just fell on you. Laugh it off and learn from your mistakes.
Its very much part of the game. Next time you will be better.
#6.
Have proper reporting systems, don’t rely on spies.
Systems to report, are better than cousins hanging around the MD.
I have spoken at great length before about the importance of numbers. Look for my posts, in which I talked about the importance of “managing by numbers”.
#7.
Don’t procrastinate!
If you are going to do it, then do it!
There is nothing more irritating than those people who talk endlessly about doing something, and yet never do anything.
In the next post, I will talk about investing in existing businesses, including the Stock Exchanges.
To be continued.
Source; Strive MAsiyiwa
