In job-scarce South Africa, youth unemployment is currently at an all-time high. Becoming an entrepreneur might be the very solution to solving some of the challenges our country is facing. But where does one even begin?
Starting a business is no easy feat, especially when the focus is on youth entrepreneurship. Mduduzi Luthuli, an independent financial adviser and founder of Luthuli Capital, says a lot of groundwork has to be considered before opening one’s doors.
If you’re considering any sort of business venture, take note of these first steps before registering a business:
Start-ups are still considered risky. There is a lot of groundwork you need before you can even register. Forming a solid foundation that you can build a business on is very important:
What problem are you trying to solve? Whose lives are you trying to improve? What’s your realistic time frame for launch, sales, and profitability? Luthuli says your business plan has to be equipped to answer such questions.
2. Develop a Plan
Before deciding to register, take a moment to gain an understanding of both your product and service; and the community you will be operating in. Ask yourself a series of questions about the product and whether it meets the needs of your community, such as:
Will people be interested in this product? What can be my price point?
The South African entrepreneurial landscape is diverse and varied, cross-cutting both formal and informal economies. Not all businesses are meant to operate within the same sector. Take for instance the fast-growing township economy; in most cases, a lot of people overlook starting a business within the informal sector, but so many opportunities are available if you do number 1 properly!
3. Find a Mentor & Network
Finding a business mentor can be a critical component for your business especially as a young entrepreneur, as they will be able to give you invaluable advice on what to do and how to grow your business. Networking is another key element in starting your business. By establishing and sustaining business relations through your networks, you will be able to keep abreast of invaluable insights and establish new businesses. This network can be very resourceful when looking for funding and new ways of growing- especially in the start-up phase.
“Entrepreneurs have to learn the power of networking and the value of mentorship, as these are the things that most entrepreneurs take for granted. And also they must know that opportunities will not come to them; they have to go out there and create them by knocking on corporate doors with proposals. Personally, I am where I am because of a business mentor who changed the way I see things,” says Anda Maqanda, founder of engineering company AM Group.
‘I want to start a business,’ is a common phrase that is easier said than done. In our next article, we will cover registration and financing for your business