- January 8, 2013
- Posted by: admin
- Category: Entrepreneurship
What To Do Before Quitting Work For Pursuing Business by Mr Neo Kuaho
According to world standards and qualifications requirements, I just might not be qualified to write and speak on this subject, most especially if people reading this article were to know that all my three (3) business bank accounts are at a negative balance along with my personal bank account.
However, my journey as an entrepreneur qualifies me to share these thoughts with you. In my journey I have developed an immaculately custom fitting thick skin, amazing survival instinct, thorough and practical insight into how not to start and manage a business. I have been where few with a couple of millions in their bank accounts and mattresses will ever go, let alone you with a stable income netting a little above the middle class if you are “lucky”.
To be in and stay in the pursuit of business success requires a sizeable level of insanity, irrationality, and tremendous optimism. Rejection, disappointment and loneliness are a major part of the journey, so gear up get used to this but don’t let them define you or your potential. Most importantly, learn from them.
Here’s what you need to check and do before you go into your own business full time.
Restructure your “Basecamp”
Your basecamp is your personal and family financial obligations related to your survival
- Family support (spouse, kids, uncles, aunts, cousins, etc…)
- Your faith in your Creator – Your Spirituality.
If you do not put measures in place to safeguard the survival of your basecamp, your business may fail, your spouse may leave you, your kids may starve and you and your family may not have a roof over your heads. These can cause your family to fall apart.
- Know and understand exactly how much you spend on groceries per month. Even the cost of that loaf or two of bread you buy daily has to be taken into account for the month. Give up those food luxuries, you or your kids will not die without McDonnalds, Spur ribs or Wimpy breakfast.
Stop eating out, rather cook every day and make lunch for the office and school. Consider buying those no name brands, they are not that bad. Bacon is not necessary in your diet and I do not know of any major health benefits that you’ll miss out on if you stop eating it. In 1985, American Airlines took out one olive out of their inflight meals and saved forty thousand dollars ($40k) that year. No more hosting parties and other gatherings at your house unless you are getting paid to do it. Consider reducing or stopping your smoking and alcohol intake, not only do they waste a big chunk of your money, but they will most likely kill you before you even enjoy the fruits of your business success.
- Health is important. If this area of your life isn’t cared for, you will drop and die and if you don’t die you’ll probably waste a lot of business time lying sick in bed. Exercise regularly, this will improve your health and give you that extra stamina to manage your business. Take it from me, even at my young tender age I did experience two mild strokes and breakdowns and there’s nothing mild about a mild stroke. Think long and hard about that discovery or momentum premium medical aid, perhaps you can move to a more cost friendlier package or service provider. Maybe a hospital plan cover would suffice for now and you can take the occasional cold and flu to government clinic or hospital where they will be treated at no cost. There are some pretty good government health clinics and hospitals in South Africa, just take time to look around, I should know since I use them. Do not cancel your medical aid entirely, just shop around for better deals. Buy some over the counter meds for common cold and flu, you don’t need to take every cold to a doctor unless it persists.
- Kids are smarter and more understanding than you give them credit for. Make them your biggest fans by involving them in your new business. They tend to make good bosses as they will encourage and give you constant reason to succeed fast. Discuss with them and prepare them mentally and emotionally. Ask your kids what suggestions they have to help the family reduce costs and save money. We all want the best for our kids and we often believe the higher the cost of education the higher the quality of education, this isn’t always the case as there are other schools that offer the same quality of education at far more affordable rates like st. Matthews, Immaculata, Reasoma, etc… just to name a few. Go to the department of Education and ask them to give you a list of their schools as well as their performance reviews or ratings. Make your children a part of the solution and thank them regularly for their continued support.
- Yes, a lot of us ignore demand letters from the bank and I have also been guilty of this. Don’t do this, rather go to the bank and discuss the solutions or options they have for you. It’s not nice to have your car repossessed, take it from me, I have first-hand experience and the worst part of it all is that I could have prevented it quite easily. So, do not wait for the bank or financier to repossess your German or American fuel guzzling car. Miss six or even fewer instalments on that car, the bank will pounce on you so fast, take the car and resell it to recover their money and you’ll still owe them for whatever they couldn’t recover plus legal costs. Oh, I have first-hand experience on this as well. Trade in your big shiny car for a low maintenance car that will cost lesser money for tyre replacement, fuel, service, fixing, etc… Find a cheaper insurance for your car. If you are already driving a smaller and efficient car, visit your financing bank to find out about their options to reduce your instalment amount and increase your payment period. You’ll be surprised just how helpful the bank can be.
- A lot of business owners cannot get those necessary business loans from banks and other financial institutions because they are blacklisted. We all know how difficult it is to get funding from government agencies and no investor is going to invest in your business if you can’t manage your basecamp finances. I am blacklisted, though I’m currently correcting this, and it has made my life in business extremely challenging, even with a solid business plan and track record. Before you quit your job, collate all your accounts, know all of them, ask for settlement amounts and pay them off when you get your company pay-out money or start paying them off as quickly as possible while you are still employed. Frankly, you don’t need clothing accounts or more than one funeral cover for the same people. Edgars will not hesitate to blacklist even if you owe them as little as twenty five rand (R25). Stop buying food with your credit card. It is absurd to eat now and pay next month, by that time all the proteins and minerals from that sirloin are long gone from your body and you are probably hungry again. A credit card can be handy if managed well, like my cousin who uses his to buy and resell only. Cash is king for both the client and the seller.
- I have already touched on family support and the importance thereof. Make them part of the solution and not the problem.
- Even with all of the above preparations, checks, and balances, you are going to face immensely trying times that will bring you to the brink of destruction. Ask anyone who has been in business for a while now if they have found themselves in situations they had no solutions for or any way out and I bet they will tell you they don’t know how they pulled through. Amongst the different things they will mention, they will tell you about the importance of spirituality. These tough times require irrational and insane courage, optimism, and determination beyond logical and reasonable measures; this is one of those tools no human can ever give you. Your spirituality and faith are the only bridges so nurture and feed them daily.
Now that I have given you the run down, make your move. Remember to save enough to carry you and your family for a minimum of 12 months of setting up and running your business.
Other things to save for during the basecamp restructuring period include the following;
- Business cards and other marketing material.
- Office admin equipment such as a printer, copier, etc…
- Business compliance costs like company registration, B-BBEE certification.
I know that what I have shared with you will certainly increase your prospects of success in your new business.
All of the best my fellow entrepreneurs hope to meet you at the top.