How to ... make a killing as an entrepreneur

2014-08-10 06:00

They say money and power go hand in hand and one of SA’s best-known entrepreneurs couldn’t agree more.

“To avoid handouts and dependency, create a business,” says Herman Mashaba, founder of haircare brand Black Like Me. One of SA’s first self-made black millionaires, Mashaba and fellow businessman Andile Khumalo reveal some of their secrets to becoming a successful entrepreneur.

Understand your business

“Make sure you get into a business that you understand. If you don’t understand it, your chances of success will be very little.” Before starting his own haircare brand, he spent 19 months working in the cosmetic industry. “This allowed me a chance to understand the business and know what I was getting myself into.”

If you are lazy, throw in the towel

Hard work is key. “If you have any lazy traits, then entrepreneurship is not for you,” says Mashaba. Andile Khumalo, chief investment officer of MSG Afrika Investment Holdings and founder of MyStartUp, an online portal aimed at giving entrepreneurs support, shares the sentiment. “Owning a business is very hard work. Be prepared to work,” says Khumalo.

Cash is king

The biggest reason behind the failure of many businesses is the lack of cashflow. “The biggest businesses die because they don’t have cashflow,” says Khumalo. It is important to ensure that your business is able to generate regular cashflow. “Cash gives you a chance to try again,” he says.

Great business isn’t only about good ideas

A good idea isn’t always a good business idea. Khumalo says that often, aspiring entrepreneurs fall into the trap of thinking that a good idea could translate into a great business.

“It might just be a good idea,” he says. To avoid this trap, he offers a few tips. “Ask yourself the following questions: What problem am I solving? Who is my customer? Why would they pay for the service or goods?” If you can’t answer these questions, abandon ship. “Business is about goods and services that people need or want to buy. Without this, it’s not really a good business,” adds Mashaba.

Don’t diversify, intensify

Stick to what you know and don’t lose focus. “The best entrepreneurs are focused. Look at Bill Gates and Steve Jobs – they were both focused,” says Khumalo. He emphasises the importance of staying “in your circle of compliancy”.

Do what you love

Don’t start a business because it seems like the popular choice; go into a business that you love. “Sometimes businesses will lose money, but it doesn’t mean you should give up. But, if you are not passionate about what you are doing, you should give up,” says Mashaba. Passion will help you push on when you feel like giving up,” adds Khumalo.

You will fail

Failure is inevitable. “I know your mum or dad said you’d be great, but, as an entrepreneur, you will fail,” warns Khumalo. Mashaba says failure should not stop you from following your passion even though it may force you to go back to the drawing board.

Just do it

If you have a potentially good business idea, don’t procrastinate, just do it. “Don’t kick yourself because someone else took your ideas. Don’t wait, go for it,” says Khumalo. “Business is about sacrifice and hard work. The harder you work, the luckier you will become,” adds Mashaba.

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