Bank Better, Live Better
startups: the best advice you’ll get, ever14/05/2019
Looking for startup advice? We asked Vusi Thembekwayo which basics all entrepreneurs have to get right.
Startup advice from Vusi Thembekwayo
Start scrappy – but start
Starting a new business is a marathon, not a sprint. You’re not going to win in the first week or month or year. Give yourself 999 days, because entrepreneur/maverick/venture capitalist Vusi Thembekwayo believes, that is how long it takes to see whether a business will make it.
In those 999 days – 2 years and 9 months – you will have more than enough time to make adjustments. Otherwise, if you wait until everything is perfect and in place before meeting your first client, you may never start. Or those who were out of the starting blocks first, may be way ahead of you. So, start scrappy, start in your garage, start in your bedroom, but start.
Establish a business
While it may sound obvious, a startup that doesn’t have what Vusi calls “scaffolding” is not a business; it is someone creating work for themselves. Think of a freelance website designer or content writer who is contracted by clients to do work for them. They don’t have a startup business, they are self-employed. If the designer or writer is not there, no work will be done.
To be a successful small business startup, you have to think of it as a building. When the foundation has been laid and the construction begins, you need scaffolding to be able to build a second and third storey. In the same way, an entrepreneur needs systems and people, since they are what allows a business to run even when the construction team has left. Many small businesses fail because they never build systems to keep it up and running when the builders are not there.
Live like a pauper
As someone who works with many entrepreneurs, Vusi’s council to all startup owners is the same: Live like paupers. “If you can eat one meal a day and supplement it with water, that’s what you do,” he says. In other words, put as much money as you can back into your business. Don’t spend it on cars, branded T-shirts or fancy dinners.
Funding a startup yourself is often the only way to go for first-time entrepreneurs, and this could include a personal loan. When deciding on that route, it is vital to know how much the monthly repayments would be, how long you’ll have to repay the loan and what the interest rate is. These factors will determine the final loan cost. Spending as little as possible on luxuries and rather using the money to repay a loan, will help you to settle debt quicker.
As with your personal budget, work with the loan amount available to you. Don’t extend it or increase the amount. Remember, even if you should close your business, you will still have to repay the loan.
Plus, know where to put your money
Any business, whether a one-man startup or a large conglomerate, has to understand their product from start to finish. You need to understand where it’s coming from, what goes into it and who is making all the different parts. And what each of these components cost. If you are selling T-shirts, your pricing will be influenced by the fabric supplier, the T-shirt manufacturer, the label printing company and the delivery truck company. You will be a middleman without control over your price since you first have to pay all your suppliers whatever their asking price. However, if you own the delivery truck, or print the T-shirt labels yourself, you will have more control over your selling price.
For more great small business advice, including who should answer a startup’s phone, watch Vusi Thembekaya’s Masterclass for startups.
Action your big goals
If you have all the basics in place and your startup business is running, perhaps it’s time to take your skills to the next level with a short course from GetSmarter. You can do it online in your own time, and if you’re a Capitec client, you will get R4 000 off selected GetSmarter online university courses when paying with your Capitec card.
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