13 questions to ask before starting a business

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Do I need a business plan? and other common business questions answered by @BiznessVirgins Click To Tweet

Q&A time!

question

There’s no perfect way to start a business, the key is to arm yourself with the right knowledge and set the ball rolling. And to help you set the ball rolling, we’ve answered 13 questions we’ve come across over and over again in relation to starting a new business.

1. How do I get funding?

The best way to fund a new business is to bootstrap (from personal savings/funds, family, friends and revenue generated by the business). Pitch your idea to close family and friends, get them to believe in it and fund it.

However some businesses require high startup costs; such businesses cannot be bootstrapped, funds for such businesses can be acquired from investors, banks, crowd funding, grants …

2. What kind of business should I start?

Its always easier to go for something you know about, have talent and passion for.

Find your talent and passion, do your research, this makes it easy to identify the right kind of hustle for you.

3. How should I choose a name?

A good business name can quickly get your brand the right attention it needs. Put some thought into picking a name. Avoid random names or names that restrict you.

Go for a name that won’t confuse people about what your business does. A business name should set you apart and protect it. Search the internet, especially social media platforms to see if the name you pick is available for use.

4. Do I need a business plan?

When you are setting up a business on a low budget, you do not need a business plan. Simply do a lot of research, then put down your mental model for it. Be sure you reconcile this mental model with the bootstrap model as you go along, this will give you a working business model as you scale up.

In the case of a business with high startup cost, a plan is required to create structure; it is important that this plan allows for flexibility as you go along.

5. How do I employ?

For a bootstrapped business, at the beginning of the venture, try as much as you can to involve yourself with the various aspects of the business so you able to determine the skills required when employing. Except you are on the look out for a specialized skill, employ interns and smart inexperienced people, they are usually trainable and eager to learn.

For bigger startups that are run on business plans, you can hire human resource consultants to work out the employment process. To save on costs you can use professional networking sites like LinkedIn to find qualified individual for various job roles.

6. What licenses and/or permits do I require?

This depends.

Find out what permits, licenses or registrations clients/customers look out for in your kind of product or service. For certain businesses you can obtain permits/licenses from local councils at a minimal cost to operate within a particular scope, you can later upgrade the permits/licenses as you go along in business.

7. What do I need to know about book keeping?

Understand financial statements and bookkeeping terms; Balance sheet, income statement and statement of cash flow, net profit, gross profit, revenue, cash investment…..

Keep a close eye on your cash flow, cash investments, net profit and revenue. Software applications like Waveapp can be used for bookkeeping. Also keep record of your business activities.

8. Can I operate my business from home?

Again, this depends. Some businesses require a space where customers can come walk in while others do not.

This is one good way to save on cost as a start-up so except its absolutely necessary, work from home and let the business grow itself to acquire and maintain a work space.

9. Should I operate a franchise or start a business from scratch?

A franchise comes with structure, this reduces the amount of risk involved in setting up a business. On the other hand, a franchise requires a good amount of capital to set up, there are usually many clauses in the agreement and you never really get to build the business structure you want, instead you manage an already existing structure.

Before becoming a franchisee, make sure the model is viable in your choice area, work with a lawyer, make sure its something you are ready for otherwise simply start from scratch.

10. When can I expect to become profitable?

Most new businesses take up to a year to become profitable; Here are a few tips to help you stay afloat during this time

  • Keep your expenses low
  • Keep a close eye on financials.
  • Engage in quick cash transactions/turnover
  • Generate extra cash along the way by offering products and services relating to your business, make sure this does not distract you from your main business.

11. How will I cope with competition?

  • Always stay aware of what your competition is up to.
  • Regularly update your knowledge of what’s going on in the industry you operate.
  • Listen closely to customers.

12. How much do I pay myself?

Put yourself on a minimal salary; even if the business cannot pay you yet, keep a record of it, you can later convert it to sweat equity.

13. How do I pick a partner?

A partner can make or break a business, choose them with care. A business partner should complement you in such a way that makes the business stronger. A partner is supposed to bring in something you do not already have.

Have a good knowledge of who your partner is to avoid surprises, make sure you are aware of all the risks involved in partnerships. Make the partnership agreement tidy, involve a lawyer, please do not set up a partnership on a gentleman’s agreement.

Goodluck!

Melford Vincent: Kick the notion that two things don’t go together

I have great aspirations for my brand & I hope to see it throughout Africa Click To Tweet

There is nothing as gorgeous as having glowing melanin with the kink and curls that come with it. Yes, I’m talking about the beauty of African hair. Most of us however, feel compelled to straighten our hair so that we fit in easily. While doing up our hair and getting extensions is not a bad thing, all I’m saying is that it’s still important to maintain that natural and just be naturally unbothered!

Melford Vincent a 21-year-old Sierra Leonean lady who is pursuing a degree in Law struggled with badly damaged hair for a long time. She had a hard time with it but through extensive research, she finally found the most effective herbal remedy for African hair. Melford formulated this herbal hair remedy into the I-GRO hair recipe that works wonders for African hair. It helps with hair moisture and the acceleration of hair growth.

I-GRO ingredients are all acquired locally from the markets of Sierra Leone and currently it’s one of the main brands leading in the hair community of her country. This is evident in the young women, children and young men that are getting hair breakthroughs through its use. Unbelievably this young #Motherland Mogul started her business with less than $10, making just a few for friends and using the little profits to produce more. To date Melford has made over a thousand products, developed her brand through her smartphone and notepad and now she is looking into hiring staff.

I had the opportunity to talk to this goal getter and this is what she had to say.


I-GRO

Why do you think the natural hair community is small in Sierra Leone?

The natural hair community in Sierra Leone is a small one but it keeps growing from time to time. Most Sierra Leonean Women don’t practice safe hair practices they prefer throwing on a wig or other hair extensions, so they see little or no need to care for their natural hair underneath.

Most of us have been conditioned to believe that natural hair is bad and need to be tamed with relaxers.

How long do you think it will take to convince the African woman to embrace the texture of their natural hair?

I think with the growing trend of the natural hair movement, most African women are coming to terms with it and embracing their natural hair, although some may need extensive schooling and persuasion so as to even give going natural a thought.

There  are quite a number of hair products for African hair and most women have been disappointed by most of the results. How do you assure someone who has never used l-GRO that it’s different?

Through experience, most of the products allegedly made to cater for African hair needs don’t necessarily work for African hair effectively. Reason being that in most cases the African climate was not in mind when these products were formulated. The African climate is a harsh one, with excessive heat, humidity and dry winds in the harmattan, I-GRO bridges that gap.

It was formulated, to perform perfectly in an African climate, balancing the hair moisture and not leaving a greasy feeling. The product likewise works for other climates and colder weathers because of its potency.

MELFORD VINCENT

There are over a hundred people talking about your product on Facebook. What are your strategies to multiply this number?

I-GRO is fast becoming the most sought after hair solution in Sierra Leone and it has also been spreading to neighboring countries like Liberia , Guinea, Ghana, Nigeria etc. I am working daily to develop my social media following, which is growing substantially daily.

How do you manage your time since you are a student and at the same time you run your business?

I am still trying to find a balance, as it is actually not easy. For now I make sure I manage my time well. I don’t procrastinate. And I make sure to produce a lot of products at a time so I don’t have to be doing it every now and then.

I  am thinking of hiring as the business is fast becoming too big for me to handle alone.

Melford Vincent says, There's nothing wrong in starting small. Click To Tweet

What advice would you give a young you?

I would tell them, to kick the notion that two things don’t go together. They sure do, and you can start building your dream, no matter how old you are. There’s nothing wrong in starting small, you don’t need to break the bank to start a business. I started mine with less than $10.


If you’d like to share your story with She Leads Africa, let us know more about you and your story here.

Twitter Chat with Alina Vinogradova: The importance of programming for African start-ups (Nov. 24th)

african start-up and alina

African start-ups are coming up across the continent, but the investments and programming needed to ensure their growth aren’t always there. What needs to happen for the number of investments and programming for African start-ups to increase? What should investors and venture capitalists be doing to increase the strength of the African start-up space and what can entrepreneurs themselves be doing to attract the right kinds of investments?

Given She Leads Africa’s accelerator program and our recent Demo Day, SLA is working hard to address these questions. Along with our partners from VC4Africa, Work in Progress, and others, SLA is working to ensure African entrepreneurs have the tools & resources they need to reach their goals.

Join SLA & Alina Vinogradova of VC4Africa on Nov. 24th, for a discussion on the importance of programming for African start-ups, whether it’s accelerator programs, incubators, pitch competitions or anything else that exposes African start-ups to investors and mentors. In particular, we will focus on why we need more programming focused on African women entrepreneurs and encouraging their growth across the sector.

Follow She Leads Africa on twitter and use the hashtag #SLAChats to ask your questions and participate in the discussion.

Topics that we’ll cover:

  • The toughest barriers to African entrepreneurs accessing finance, investors & venture capitalists
  • The importance of platforms where female African entrepreneurs have direct access to investors
  • Closing the gender difference in access to finance for African entrepreneurs
  • What African women should keep in mind when seeking out financing for their start-ups

Twitter chat details

  • Date: Thursday Nov. 24, 2016
  • Time: 12pm London // 1pm Lagos  // 3pm Nairobi
  • Location: Follow She Leads Africa on twitter and use the hashtag #SLAChats

Help us spread the word:

Join @SheLeadsAfrica & @VC4A for #SLAChats on Nov. 24 on the importance of programming for African start-ups Click To Tweet

african start-up twitter chatAbout Alina Vinogradova

Alina develops and manages startup support programs implemented by VC4A as part of larger donor-funded initiatives, such as Work in Progress! Project or World Bank’s Pan-African Accelerator. She builds out VC4A’s network of strategic partnerships with various African startup ecosystem players and is constantly looking for fit between organizations, their objectives, and the goals of the VC4A community.

Alina holds MSc in Business Economics from Baltic State Technical University in St. Petersburg and an MBA from Amsterdam Business School (UvA). Prior to VC4A she spent over 10 years working in various commercial roles in the private sector in both emerging and developed markets, with B2B marketing, sales & business development being her core expertise areas.