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5 common mistakes new entrepreneurs make
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big part of starting a business is having a plan then having the discipline to act on it. Being part of a startup isn’t always glamorous, and often requires simply submitting yourself to the process. In his book The Lean Startup, Eric Ries makes this point better: “I have learned from both my own successes and failures and those of many others that it’s the boring stuff that matters the most. Startup success is not a consequence of good genes or being in the right place at the right time. Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught.” Taking steps to avoid mistakes frequently made by new entrepreneurs is a part of this process. Here are nine mistakes you should avoid when starting a new business:
1. Not spending enough money or spending too much money. As a new entrepreneur, money is likely to be one of your biggest concerns. Pre-launch cash flow is likely to be close to nil, so making and saving money will usually take priority over everything else. There are two mindsets I tend to see among new entrepreneurs: Either “You have to spend money to
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make money” or “I’ll spend the bare minimum until I have some decent cash flow.” 2. Thinking you have no direct competitors. The excitement about a new product or business can often lead new entrepreneurs to think they really have no direct competition, or that their product is so head-and-shoulders above those of their rivals that they’re in a category of their own. In reality, it’s extremely rare to have no direct competitors. Unless you’ve invented a completely new product, there will be someone who already has market share in your niche. Do your due diligence to find out what these companies are and how you can differentiate your business.
3. Making hiring decisions based on cost. This is closely tied to number one, but is so important it deserves to be mentioned separately. When funds are tight, it’s tempting to skimp on the cost of new hires. The problem with this strategy, however, is that you’ll end up paying in the long run. Low-cost employees and consultants are usually low-cost for a reason -- they are more likely to be inexperienced, unskilled or unreliable (or all three).
4. Not setting attainable goals. New entrepreneurs can be so enraptured by their “big idea,” they work without a solid plan. But the reality is you must set realistic and attainable goals in order to succeed. Make a point of setting both short- and long-term goals, and
make sure they’re specific. Don’t just say, “I want to make $1 million this year.” Set a reasonable goal, and then determine what specific steps you need to take to reach it. 5. Not thinking about marketing. “If you build it, they will come.”
This is a common belief (sometimes conscious, sometimes not) among new entrepreneurs. They think that their products are so revolutionary that they can just rely on free PR and word of mouth. In reality, the vast majority of startups will need to invest heavily in marketing. This may include
SEO, content marketing, PR and paid advertising. Take a look at where your competitors are spending their marketing dollars, and ask yourself how you can compete and differentiate yourself. This article first appeared on entrepreneur.com
‘What entrepreneurship has taught me’ Deola Layade, founder and CEO, Exquisito Confectioneries has been in the business for nine years. In this interview with RUTH OLUROUNBI, she talks about her starting up years, and her quest for knowledge. WHAT inspired you to go into cake business? I mean, you did move back from England to start your cake business. I have always had passion for craft and we are artistic in the family. Growing up I develop interest in cakes and passion to make it more tasty and look more beautiful was what motivated me. I’ve actually been baking as a teenager. I was taught basics by my mum then went to orisun catering school before I left for the UK after my degree. Was business experience everything you thought it would be, or was starting a business a bit of a challenge at first? In the beginning it was though, being a new face in the business, you need to build confidence in the few clients you get and hope to win some more just to be able to break even. Passion for the craft was a strong motivation to not give up; eventually dedication and hard work started paying off. What were you doing in England before moving back to Nigeria? I worked, but also spent most of the
time training and retraining from the best craft schools in England. Also, why choose to Ibadan as your base of operations instead of say Lagos or Abuja? I grew up in Ibadan and this is my way of giving back to the society. The passion to create the same standard that people pay thousands and millions for in Lagos and Abuja was what made me set up in Ibadan. How much did you start your business with and how did you get the capital? About N1 million back then from my savings. Would you say it is important for entrepreneurs to pursue further education, giving that despite your degree in Psychology, you also have a certificate on entrepreneurship management from the Pan African University? It is extremely important to pursue further education. My time at Pan African University was an experience that has helped in improving my
business And, how has your degree in Psychology and certificate in entrepreneurship management helped your business grow? Degree in Psychology is very helpful in public human relations and even in dealing with staff. Understanding customers’ needs, putting their eithers into reality and dealing with people with different temperament is quite easy as a psychologist. The improvements we have made in the last couple of years are drawn from the experience in Pan Africa so yes they have both been helpful. In your experience, what is the function of an entrepreneur in a society? An entrepreneur should create jobs, engage in CSR and deliver on their promise. Since you organised your first ever major bread fair in Ibadan, not much has been heard about you since then. Is there a reason for this? We have had two successful
editions prior to last year, but we decided to channel our energy on a new product line – Delish Donut. So instead of the bread fair we had an open day cake and donut tasting on October 1. Also the tense political and economic situation required that we tone things down a little. Your last year’s designs were inspired by the latest trends in urban arts, fashion and sugar-crafts to create exquisite, tasteful and classy cakes for all occasions, as you said, is there an inspiration for this year’s? Yes, there is but we won’t let the cat out of the bag yet. We will release some new design in a couple of weeks when we finish remodelling the shop and launch our new brand. Looking back, would you say you started your business exactly the right time for you, or you’d wish you had started earlier? Well like the say God’s time is the best, I started when the conviction to do so was strong so I guess it’s the right time.
How Nigerian banks are grooming entrepreneurs Continued from pg23
Adeola believes that it is easier for the youth to think beyond all the negatives in the society, and become creative entrepreneurs. “For the bank, this is a social corporate responsibility. We owe it a duty to continue to create employment, encourage entrepreneurs who will definitely become our customers. Sterling Bank has done a lot in this area, we are introducing in an innovative manner competitions, ideas, innovations; making it possible for young Nigerians to be able to think beyond the negative ills we have witnessed in the society today,” he said. The bank’s Executive Director, Abubakar Suleiman, said the lender’s motive for sponsoring the MTE initiative was not to make profit but to ensure that Nigeria has entrepreneurs who are well equipped to run businesses that are profitable and sustainable. He said although capital is a critical factor in entrepreneurship, it is not the main challenge faced by aspiring entrepreneurs, stressing that many of the young entrepreneurs have no knowledge of accounting, book keeping and other skills needed to successfully run a business. The MTE initiative is currently in the “Call for Entries” stage where interested participants submit their business ideas and plans on the bank’s website, following which a review will be conducted by an independent consultant-HT Limited. Other stages include training, and the final stage wherein the entrepreneurs present their revised business plans to a panel comprising top executives of the bank, judges and venture capitalists. Suleiman said: “We realised that there are lots of young people out there who have a lot of credible ideas but they need people to guide them so that they can run their businesses successfully,” he stated. Speaking on the initiative, the Group Head, Strategy & Communications, Shina Atilola, said, “Today’s economic realities have necessitated the birth of a crop of businesses led by visionary individuals called entrepreneurs. ‘’Although these individuals have been described severally as the drivers of the economy, they encounter a number of challenges, chiefly the need for funding and financial advisory. These are the gaps we are trying to fill with the ‘Meet the Executive’ initiative”, he explained. He explained that the goal of the second edition of the MTE is to bring to the fore, the creative, innovative and brilliant ideas housed by Nigerians with a focus on developing their ideas and bringing them to life. “With up to N6 million worth of grants available, participants will jostle to be short-listed among the
final 25 that will defend their business plans or ideas before a panel. The MTE initiative creates an avenue for entrepreneurs to have an offline engagement experience with the bank,” he said. Speaking at the flag-off of Season 11 of the programme in Lagos at the weekend, CoFounder, Elearn.ng, Michael Onobote, who was the top five winners in the maiden edition of the MTE initiative, said the programme ignited his drive to launch his company. “The MTE initiative was the springboard for us to start Elearn. ng, a listing platform for vocational skills providers to list their businesses and have a booking feature implemented on the platform. So, their customers can find them online, and book their services with instant e-mail alert or SMS. We also have an online learning feature whereby people who are interested in learning online can come and subscribe to a course and learn how to do the business while we get our fees,” he told Nigerian Tribune. Onobote explained that during the MTE initiative, the lender provided compensation cash prize for winners as well as business support. “When we wanted to launch our company, we sent the bank an e-mail for them to know where we are. We have been in constant communication with the bank since 2014 when the maiden edition was held,” he said. Another Co-Founder, Elearn.ng, Olanrewaju Odunowo, said the company is looking at the informal sector, adding that there are huge opportunities in that segment of the economy. He said that many of the vocational skills providers do not have Information Communication and Technology (ICT) skills but the company focuses on promoting their businesses while they focus on their skills. “One of the things is that we are
solution providers, and we realized that there is so much focus on the formal sector. We are trying to ensure that those in the informal sector become more profitable. We believe we can empower them, and assist them grow their businesses,” he said. Continuing, he said: “One of the challenges is that majority of the vocational skills providers do not have websites, so, we go to their shops
to get them signed on”. Other winners in the first edition are Gbemisola Esho, a female entrepreneur who specializes in making shoes and bags from raw leather and Ankra fabrics; Rufai Adeyemi who runs a restaurant specialised in aquatic produce and Daniel Momma, a pet bottle recycler. All these individuals received business grants totalling N5 million.
Partnership with FSD Sterling Bank Plc also signed an agreement with Field of Skills and Dreams (FSD), a vocational training institution, to provide training programmes for members of the National Youth Service Corps (NYSC). The pact, the bank said, is
In its determination to support entrepreneurs, Sterling Bank has repackaged the Social Lender Scheme by increasing the minimum on-line micro credit from N3,000 to N10,000.
part of its Corporate Social Responsibility (CSR) drive to support skill acquisition among youths to prepare them for self-employment. Under the agreement, the bank will sponsor the training of NYSC corps members in various vocations during the course of their service year in alignment with its expressed purpose of enriching lives. The lender has so far funded the training of about 100 NYSC members in various vocations during the pilot stage through the NYSC-SAED (Skills Acquisition and Entrepreneurship Development. It has also equipped a 20-seat ICT laboratory of the FSD which will provide all participants with rotational access to free ICT training. Sterling Bank in a statement explained that the need to support the development of skills among the youth has become inevitable given the growing rate of unemployment in the country. “We believe that the steps we have taken so far would help in ameliorating the problem of unemployment in the country and support other initiatives such as the Youth Empowerment Scheme (YES) and the Youth Enterprise with Innovation in Nigeria (YOUWIN) introduced by the government to checkmate the relatively high rate of unemployment in the country.” Social lender scheme In its determination to keep supporting the youthful population, Sterling Bank has repackaged the Social Lender Scheme by increasing the minimum on-line micro credit from N3,000 to N10,000. The scheme was launched last year and the bank has disbursed over N6 million to over 2000 online customers. To date, over 90 per cent of the loans have been paid back by the beneficiaries. Social Lender, the first in Nigeria is a modified peer to peer lending solution using the Social Media Platforms through which microcredit is offered to members of these communities. The scheme provides a platform for online fans and followers who are customers of Sterling Bank to obtain these monies via social media channels such as Facebook and Twitter. The bank in a statement explained that the scheme was repackaged with added benefits because of its success story for the bank, the quality of feedback from members of the on-line community and the impressive pay back attitude of the beneficiaries. Also, the bank has begun the MSME Academy in furtherance of the bank’s commitment to enriching lives by focusing on the unique needs of its entrepreneurial customers. The project is also meant to promote private sector involvement in the development of small businesses and the Nigerian economy at large.