Myth About Business

Entrepreneur! It seems like the life of an entrepreneur is so interesting. Indeed it is filled with never ending excitement. Just like anyone, the life of an entrepreneur has its ups and downs. But then who is to say what is ups and what is downs? Most entrepreneurs see the downs as ups. It is just a matter of perspective. Entrepreneurs are able to see the downs as an opportunity or a learning experience, thus, the downs become the ups.

Being an entrepreneur for 5 years, not a long time though; I may be able to share my experiences with you. I believe I earn the right to crash some of the myth about business. There are too many “fact” about business that are taught by non-business people. Some of these “fact” are simply not true.

Myth – You need capital to start a business

Total crap. I want to tell you, you don’t need capital to start a business. You do need creative juices to start a business. Think about all the successful entrepreneur you can think of, how many of them start their business with a lot of money?

I started my business with only $20. I didn’t even pay for the registration of the business. I also imported products from China without coming up with any upfront fee. This makes me believe strongly that you do not need any money to start a business. Whenever someone told me he can’t start his business because he didn’t have enough money, I always asked, “why do you need money to start a business?” In my belief system, start a business with money doesn’t make sense to me anymore.

Not only me, many of my friends are able to start their business with very little money – as little as $100. Why are my friends and me are able to start our business with so little money?

Very simple, we do exactly opposite what the professors are teaching. What most business books teach is to buy then sell. We did the opposite, we sell then buy. When I decide to sell a new product, I will not but first. I will go around selling it first, taking order from prospective customers. Once I got all the orders, then I will buy the products. This way I minimize my risk and I do not need any upfront cash to buy the products. I collect the money first upon order, then use the money to buy the product.

When a person says he needs money to start his business, actually the big chuck of money is not used in buying products. Most of the money is used in renting office space, buying fixed assets like computers, printers, furniture etc. After renting the office, they spend huge amount to renovate the office, wanting to make it look like a big company. In their mind they are thinking, “the company must looks good, should have the necessary equipment before you can start a business.” Did they get this mindset from school?

I started my business without an office, still I am able to close deal with my corporate clients. A friend rented an office without paying rental and he got all his furniture for free. You bet he saved a huge chuck of cash. I met a gentleman last month, he just couldn’t believe that I can start a business with only $20. He kept saying he need to rent an office, buy this equipment and that furniture. He figured he needs about $30,000 to start his business.

I ever rented a booth for free to sell my product. In fact before I started selling my products, I already make money. It’s all about thinking and doing differently. I must clarify, everything that I did was legal, ethical and moral.

Another of my friend started selling her service before she registered the business, get an office and open a bank account. Her clients issued cheques to her before she opened the corporate bank account. Then she took the money to rent office, buy furniture etc. She started with basically $0.

But I must emphasize this – deliver what you promise. When you take other people’s money, you must deliver the product or service to them. Integrity is so important in building a successful business. You would want to deliver what you promise so that your clients will come back to you.

The point is you do not need money to start a business, instead you need creativity to start a business. As a matter of fact, I believe everyone can do what I did. It’s just that you may be so into their pre-fixed perception of needing lots of money to start a business, therefore, you are stuck in your current situation. As long as you are willing to break away from the old mindset, you will be on your way to starting a successful business.

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Does Macro Economics Really Affect Small and Medium Sized Businesses, Say the Size of National Debt?

CHANCELLOR Alistair Darling has ramped up the national debt (to £700+bn to prevent the country slipping further sliding into a long, deep recession. In his pre-Budget report (Mon 24 Nov 08), billed as the most important in a generation, Mr. Darling gave some brief reasons and details of action in the hope to maintain employment, and inject cash into the UK economy. One tactic was Darling’s 2.5% cut to VAT from December 1 until 1 Jan 2010 to encourage consumer spending, at an estimated cost to the UK Government of £12.5bn. He focused on a capital spending programme on major (construction) projects to renovate the country’s infrastructure (motorways?). There was a modest move at the time in a positive direction by the financial markets – the FTSE 100 Index rose 80 points (to 4130).

However the Chancellor’s bombshell was that UK’s debt as proportion of GDP will rise from 41% to a high of 57% in 2013. Darling argued it was essential to “act now” and he was willing to do “whatever it takes”. He may be right. But…”What price will SMEs pay for this move in 10 or 20 years time?” Darling was reported saying that he wanted “to take fair and responsible steps to support business while putting the public finances on the right path for the future.” Small and Medium Sized businesses (SMEs), make up 99% of all UK businesses. How have SMEs been supported by the Government’s action? Consumers have arguably had a little more spare change in their pockets, but this ends 1 Jan 10. SMEs act as low cost tax collectors for the Treasury. Why couldn’t an additional 2.5% have gone to help SMEs for the work of collecting, reporting and paying the taxes, as a further measure to the 2.5% given temporarily to consumers. That would be real support for real difficulties i.e. help with the burden of bureaucracy. In a global downturn businesses need expert advice and assistance to

  • acquire new customers,
  • further drive down costs, and
  • deliver new products and services.

Success is not a lottery, but the result of hard work, and implementing a good plan. Where can one find a good plan in these challenging times? If lost, see direction. A professional business advisor is worth their weight in gold in good times and bad. Regional Development Agencies keep registers of business support professionals or you can try new services online like Business Support Finder. A common example of a problem in a downturn is a problem with the bank. The relationship with a bank especially if liquidity is a problem and the business is reliant on bank borrowing for at least some of its working capital. A business adviser can create a ‘way out’ based on the businesses’ opportunities and core competencies. Banks are less likely to behave badly if they see a professional ‘outsider’ involved in the business. Keeping the bank informed is key.

What you tell them, and how, is what a good business adviser should be skilled at. They should know what the best approach with your bank should be. Raising fresh capital finance may be a necessity. Some finance could free the business from uncompetitive contracts or banking facilities. Transforming a bank relationship, or supporting a business to secure better terms in a refinancing package are just one or two examples of how getting ‘experts’ to help, and keeping them in your corner for when you need them, can really transform your business performance. The best place to begin outsourcing business support is to involve a Business Mentor. Some business owners use family members, but this is often a bad idea, since the family member may be good at his business but not at yours, or managing his staff but not directing you. It is always better to involve a professional, experienced at providing high quality support from outside the business. Julian Rowe, Business Correspondent, Business Service Finder.