Turning an idea into a viable business

Sir Arthur Charles Clarke, a British science fiction writer and inventor, remarked that new ideas pass through three periods:

1. It can’t be done.
2. It probably can be done but it’s not worth doing.
3. I knew it was a good idea all along.Coming up with a groundbreaking idea is only a small part of the entrepreneurial journey; the real trick is to be able to determine, with some certainty, whether it can be turned into a viable business.

How does one come up with a business idea? There is no prescribed way – the process varies from looking for a solution to something that is bothering you, to an innovation in a sector that seems to be in a technology-development curve. Settling on an idea is often done by confirming and checking its merits carefully. Avoid the trap of having a solution and then looking for a corresponding problem it could solve.

While being an entrepreneur might involve inventing or reinventing the wheel, more often than not it is about improving the wheel by offering a better service or product than existing competitors. An example would be a new butchery that offers a better quality product.

Entrepreneurs are often a mix of inventor and innovator as they recognise a trend or identify a shortcoming, and then create a solution in order to meet demand or solve the problem.

Every good business begins with research. When new business ideas fail, it is often not because of the idea but due to insufficient research. A few vital aspects to consider when researching include customer insights, product or service supply and demand, competitors, financial viability and the availability of funding.

One of the best tools is a Swot analysis used to define a business’s strengths, weaknesses, opportunities and threats.

Some vital elements to consider:

Passion: If you are not passionate about your business, you will be tempted to give up sooner.

Central idea: Your idea seems perfect to you, but how unique is it? Any good business needs a unique selling point (USP). Research whether the idea has been done before, what the USPs are for the competitors, whether there is a legitimate need for another provider and whether the idea has long-term sustainability.

Defining the market: Analyse your target market in order to establish what your customers want and how they communicate. It is important to research and analyse your competition, including their strengths and weaknesses. This will give you an indication of where to position yourself in the market.

Calculate the figures: Calculate your running costs, cost of sales, pricing structures, profit margins (both gross and net) and cash flow forecasts. Conduct two different forecasts – one for the worst-case scenario and one for the best. Then start researching potential sources of finance.

Persevere: Entrepreneurs should not be disheartened by the need to constantly rethink, retool or redefine their offering. Refocusing should be taken as a predictor of future success.

It is crucial to remember that entrepreneurship is a constant work-in-progress, and success takes research, planning and hard work. Those willing to go the distance will have the opportunity to hear many of their detractors acknowledge that they knew theirs was a good idea all along.

Ben Bierman is the managing director of Business Partners Limited

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Bookkeeping basics for small businesses


Keeping track of the finances in your small business is the key to its success, but where do you begin? Here are eight steps to setting your bookkeeping up for your business.

STEP 1: Collect all your paperwork

Before you start your bookkeeping process you need to have all your paperwork together. Then you will need to divide the paperwork into the following categories:

  • Accounts payable is the money you owe to other people for business expenses.
  • Accounts receivable is money that is owed to you by your customers.
  • Petty Cash is the cash you have on hand to pay small day-to-day expenses

STEP 2: Create an accounts payable folder

In this folder you will put the following information:

  • bills
  • receipts
  • bank statements
  • credit card statements
  • proof of payments

STEP 3: Create an accounts receivable folder

In this folder you will put the following information:

  • Invoices
  • Proof of payment (credit card slips, internet bank transfers, cash receipts)

STEP 4: Setup an Excel document

There are different ways to keep records but we will look at how to create an Excel document for your business.

In this document you will setup two sheets:

  • Accounts payable
  • Accounts receivable

On the accounts payable sheet, you will need to label the following columns:

  • Date you received the invoice
  • Supplier’s name
  • Account number
  • Type of expense (e.g., office supplies, professional services, etc.)
  • Amount you owe

On the accounts receivable sheet, you will need the following columns:

  • Customer’s name
  • Invoice date
  • Invoice number
  • Amount owed
  • Due date
  • Amount past due
  • Date payment was received

You can get an example of the Excel document here.

STEP 5: Capture the information

Now you need to fill in the information for each sheet. Depending on how many sales and supplier invoices you receive per month will determine how often you need to do your bookkeeping. It is advised to do your bookkeeping once a week if you have a few invoices. The key to keeping accurate records is to be consistent and habitual. Ensure that you schedule time in your week or day to do your bookkeeping.

STEP 6: Create an invoice template

There are many examples of invoices for Excel but you must ensure the following information is on your invoice to get quick and accurate payments:

  • Your business name
  • Your business contact information
  • Your business logo (if applicable)
  • Clear payment terms, such as “payment is due in 30 days of invoice date”
  • Details about the product or service you delivered
  • Hours worked or the amount of products sold
  • Banking details with the name of the recipient if it is different to the business name.
  • Business Tax number (if applicable)
  • Invoice number

STEP 7: Review your accounts

By reviewing your accounts payable weekly, you will be able to see which supplier invoices are outstanding and be able to pay them timeously. To build good rapport with your suppliers it is important to pay them a few days before the due date of the invoice.

When you review your accounts receivable, you will be able to note which clients have not paid you yet and follow up on outstanding payments. It is important to send them a kindly-worded letter that their account is outstanding.

STEP 8: Reconcile your bank statements

Check your bank account against your monthly recordings of expenses and income. This is important to do to make sure no fraud has been committed on your accounts. You will also be able to check if you or the bank has made mistakes on your accounts.

By following these eight steps you will be well on your way to understanding the basics of bookkeeping.

Proudly brought to the NSBC.

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5 New Year’s Resolutions for Business Owners in 2018


For many, the new year is the perfect time to take stock and set goals for the next 12 months. To eat better, exercise more, or finally take that calligraphy class you’ve been talking about forever. For business owners, making new year’s resolutions can significantly impact their success. Here are 5 new year’s new year’s resolutions for business owners in 2018.

1. Communicate Better

This is a focus on quality over quantity. Sure, you can blast out 10 Facebook posts a day and retweet all night long but could you connect with your current and potential future clients even better by doing less? Focus on posting interesting, timely information instead that encourages your audience to interact with you. Respond to comments on your posts and leave some on other’s pages. Take the time to make a few real connections every day instead of trying to reach everyone at once.

2. Prioritize Balance

The workday for a small business owner doesn’t always end at 5 pm on a Friday and pick up at 9 am on Monday. In order to continue being the successful professional you are and to avoid burnout, be sure one of your new year’s resolutions is to take the time you need to recharge. Exercise, spend time with people you care about and get some sleep at night. Carve out time for yourself and you’ll find your mind is more refreshed and your body is more energized.

3. Help Out

Think back to when you were first starting out your career. You were probably excited and hopeful while simultaneously feeling nervous and unsure. Did you have support, or could you have used more? Reach out to someone in your industry just starting out and who could use mentoring or a sounding board for advice. Your generosity will not go unnoticed, and you will be seen as both an expert in your field and as a person people want to work with.

4. Be Proactive

As you think about your new year’s resolutions for 2018, start thinking about 2019, 2020, and beyond. This task can seem daunting, so start by making a list or marking up a calendar. Write out what you’d like to see your business become or what goals you’d like to achieve (both personal and professional) and what steps you can take to make those dreams a reality. Use this plan as a motivator to stay on track with goals throughout 2018.

5. Delegate

You’re a smart, accomplished professional with your own business. You’re used to doing everything yourself, but should you? Delegating can be difficult, especially for those who are used to wearing every hat needed to run a business, but delegation can open you up to focusing on what you love and what you do best. Take a step back at your business and look at the big picture: What do you dread doing? What do you think you could do better? What overwhelms you? The answer to these questions may lead you to work that you can and should delegate to someone else.

From Outbound Engine

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The good, the bad and the ugly of late payments

Are late payments crippling your business? Why do customers think it is ok to pay late? What can you do to encourage people to pay on time?

Firstly, let’s look at the ugly of late payments, what could possibly be the reason people pay late? There are multiple reasons why people are struggling to pay you.

According to a study by Xero, late payments can be attributed to the following reasons:

Customers are waiting to be paid

This could be a perpetual circle where you are waiting for payment because your customer is waiting for payment and the person paying your customer may also be waiting to be paid. 24% of late payments are caused because of this reason.

Customers are disorganized

23% of customers acknowledged that their accounting system is disorganized and they were unsure about who they owe money to and when they need to pay them.

Customers have their own payment terms

This is probably the worst. The customers have not acknowledged your payment terms and have put their own payment terms in place for when they have decided they can pay you.

All these reasons are not good. And what effect will late payments have on a small business? In South Africa where small business is a major contributor to the economy, late payments are highly detrimental. They can cause small business to collapse and they will also prevent business from entering certain markets.

But there is light at the end of the tunnel, there are things you can do and companies who are fighting for small businesses. Here are five ways to curb late payments from customers:

Do a detailed credit check of your customer

Before going into business with someone, you may benefit from doing a credit check on the business and look at their financial history. Depending on the value of the potential client you could invest in a business check. 

Be clear about payment terms

Make sure you let your customer know clearly about what the payment terms are before you start to do business with them. You could even let them sign a contract which states your payment terms plainly.

Make accurate and timeous invoices

This is the most critical part to ensure getting paid on time. It is important that all the information on the document is correct. Confirm that you have the correct contact number and email address of the person responsible for paying the invoice. Make sure you send the invoice out directly after the job is done. Do not delay sending out the invoice as this may cause problems when it comes to payment.

Give different payment options

You may benefit by offering your client a few ways to pay. You may ask them to pay by EFT or credit card.

Have credit or savings

If your customer does struggle to pay you, make sure you have a plan B. This could be credit at your bank or you may have some savings stored up for a rainy day.

By following these steps, you could be well on your way to growing your business.

Proudly brought to you by the NSBC.

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Be your own boss today! Starting a business on limited resources

Do you want to work your own hours? Do you have a great business idea? Then it might be time to become your own boss. Being your own boss has benefits and drawbacks. Some key benefits of being your own boss are that you are able to be in control of your business and make decisions on how your business is run. You are in control of your own working style and environment. You can set your own work hours. You are able to decide where you want to work from.

The drawbacks of being your own boss are that your clients and your suppliers become your boss. They are the people who will help you to run your business, but will also ultimately decide how successful your business is. Without customers, your business will struggle. Without good suppliers, your business will struggle. So it is important to focus on these two aspects when you start out on your own.

The next aspect to consider is what resources are available to you. If these are limited, do not let this deter you from reaching for your dreams. By considering the following key criteria, you can create a successful business.

1. Keep a strict account receivables policy

It is important that you stick to a strict accounts receivable policy so that your cash flow does not dry up. By having a 30 or 60-day payment policy, you may attract many clients but you may struggle to maintain your cash flow. Therefore, it is important to set your payment policy according to what will ensure a healthy cash flow and try not to deviate from it. Let your product or service sell your business, not your payment policy.

2. Keep to the core of your business

When you start out it is important to stay true to the core of your business. You need to develop a strong core before you can think of branching out. By sticking to the core of your business you can ensure you make a product or offer a service which is supreme and will be in demand from your clients. Many corporations break away from their core, just to find out in a few years time that they are selling those parts of their business to return to the core in order to become successful again. Stick to what you do best, and do it with great vigor.

3. Spread the word about your business

Do not be shy when it comes to promoting your business. Tell everyone you know and see about the business you run. Be ready with a short elevator pitch which highlights the unique selling point of your business and why people might be interested in it. By spreading the word about your business, you can create leads and get some useful feedback from people you meet. Go out there and promote your business to everyone you meet.

4. Keep your office and staff lean

Though it would be great to have the latest and greatest equipment when you start your business, it is important to only spend money on the crucial pieces of equipment which you need to run your business. Next, only hire the human capital you need to run your business. If you can run the business with just yourself in the beginning, then do it. If you need staff, make sure you only hire the required amount so that you do not have staff standing around your business doing nothing.

By following the above criteria, you will be well on your way to being your own boss on limited funds. So grab the opportunity by the horns and live out your business dreams today.

Proudly brought to you by NSBC.

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How successful entrepreneurs make money: A case study


What do Elon Musk, Richard Branson, Steve Jobs and Oprah Winfrey have in common? They are all super wealthy and famous. But how did they come to be like this? Was it luck or hard work? Well, it is a healthy combination of both that has led to the success of these entrepreneurs. Each one of these entrepreneurs have the following traits:

They are problem solvers

When you look at these entrepreneurs, they are people who are looking for a solution to a problem. They identify a need in the market and then think of creative ways to solve it. Through being great problem solvers, they are adaptable and persevere to be successful. They capitalise on the solutions. An example of this trait can be seen in Richard Branson when he was stranded at an airport. Instead of looking at the problem, he tried to figure out a solution. His solution to the problem was to charter a plane and then sell the extra seats to his fellow stranded passengers. Thereby he got a free flight home and made a small profit.

They are passionate

Entrepreneurs have great passion for their chosen field. They are continuously reading and learning about what is going on in their industry so that they can become gurus in their field. In addition, their passion is their driving force for why they are engaged in the work they do. Many entrepreneurs work because they love what they do and not necessarily for the financial reward they will receive in the end.

They are risk takers

Successful entrepreneurs are willing to take big risks which will hopefully pay back great dividends. They hunger for the success of making money. Many successful entrepreneurs come from impoverished backgrounds and understand what it means to struggle. Therefore, they are willing to take great risks because they know they can deal with the outcome should it not be favourable.

They are hard workers

If you seek to be a successful entrepreneur there is no space for laziness. Successful entrepreneurs are constantly looking for opportunities to grow and improve their business. They work hard and work smart.

They are action takers

These entrepreneurs do not talk about the business ideas they have and then return to their day jobs. They take action. They look for ways to achieve the business goals they want. They may have limited funds but they work within their means and grow their business little by little, knowing that the wise investments which they make today will bear fruit for them in the future.

By having this combination of traits, they are able to be successful. You may wonder what this has got to do with making money, but most of these people are not overnight successes. They have worked long and hard to achieve the success that they enjoy today. So go out, be courageous, and you never you know, you may be well on your way to your first million.

Proudly brought National Small Businesss Chamber (NSBC).

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Small business equals big potential for South Africa


South African small businesses need the nation to mobilise behind them more than ever before. That’s the word from Mike Anderson, Founder & CEO of the National Small Business Chamber (NSBC). The role that small businesses play in job creation, poverty alleviation, service delivery, and wealth creation all mean that small business is big business. “Nearly two thirds of all South African workers are employed by small businesses,” says Anderson. “Small businesses also contribute a significant portion of our country’s gross domestic product, which is why we’re encouraging South Africans to lend their support to the Shop Small Movement, peaking on Small Business Friday, this Friday, 01 September – powered by the National Small Business Chamber (NSBC)”

Small businesses are the mainstay of the South African economy and the future of job creation. This all-important sector needs greater support from government, the public sector, and of course ordinary South Africans.

“Making a small change to where we spend our money can have a huge impact on small businesses, our communities and ultimately our economy,” says Anderson. The country’s high unemployment rate is well documented and its effects far-reaching.

“The advantages of supporting small businesses lie not only in making an impact on the economy, but also the positive difference it can make in uplifting local communities. Locally owned businesses help shape strong communities by keeping vital spend within small towns and cities, leading to vibrant local economies that benefit all who live there,” says Anderson. “There are plenty of advantages for consumers too, very often small businesses care deeply about the kind of customer service they deliver; knowing that quality products and personalised service is what keeps their business thriving.”

The Shop Small movement, that peaks on Small Business Friday aims to put small businesses across South Africa firmly in the spotlight, by encouraging individuals to support, visit and spend at a small business all year round, especially on Fridays, and particularly on Small Business Friday falling this year on 01 September 2016 – the first Friday of Spring.

With more support, small businesses have the potential to breathe new life into the South African economy and play an even bigger role in economic growth and job creation. “Small businesses represent countless hours of hard work, commitment, resilience and thousands of jobs. When South Africans shop small, they make a big impact. Providing as much support to small businesses as possible is an investment in our communities and South Africa’s collective economic future,” says Anderson.

“Through a sustained nationwide movement, we want to bring about permanent change in the hearts of all South Africans. We want to encourage everyone in our country to support their local small businesses all day every day throughout the year. So, when you all go out to shop, please make that all-important choice, support your local independent small businesses,” concludes Anderson. 

In the run up to Small Business Friday, the nation is invited to visit www.smallbizfriday.co.za to learn more about the movement, how to get involved, as well as how to promote their own small businesses.  South Africans can also pledge their support and stay up to date with all the Shop Small and Small Business Friday happenings via the Facebook page; www.facebook.com/SmallBizFriday and on Twitter  www.twitter.com/smallbizfriday  using the hashtag #SmallBizFriday.

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