The decision to leave fixed employment and work for yourself is huge. It can be the best decision you have made in your life or possibly the worst – it all depends on your actions, your tenacity and the belief that you can make a difference.
Having made this decision myself exactly 15 years ago, I can tell you that moving in this direction will bring you head to head with many challenges. The two biggest challenges of being a new small business owner are red tape and cash flow.
The red tape involved in making sure your business is compliant with all the generally onerous requirements of SARS, Department of Trade and Industry, Compensation Commission (worker’s compensation), Unemployment Insurance Fund, Skills Development Levies, Employment Equity reporting, the Access to Information Act, the Labour Act and many other statutory and compliancy requirements.
Larger corporate businesses can employ suitably qualified personnel to handle this, but as a small business owner you will need to get your head around all of this. It can be daunting because there does not appear to be any comprehensive checklist available of all these requirements to the small business owner.
Cash flow presents its own challenges. Unless you have access to private funding, getting any finance institution to provide working capital for your start-up business is nigh impossible. Once you are self-employed these so-called ‘finance opportunities’ will be denied to you as the institutions immediately regard the self-employed individual as HIGH risk. It will not matter if your track record over many years is exemplary, they will ignore this totally.
Growing a small business into a bigger business requires cash or at least guaranteed access to cash, as the shortage of suitable working capital, should NEVER be allowed to inhibit your ability to take on additional profitable income streams.
Being a small business owner often requires calling on assistance from accounting, legal and other specialised personnel to get through the initial period of trading and to ensure that you have good and reliable systems in place to manage the business effectively.
There is an easily avoidable issue that I have seen many times when small businesses generate income very quickly (particularly in the early stages) – they are quick to spend. New business owners often thinks that it’s okay to spend the cash that’s in their backing account on non-productive items, such as fancy motor cars, and expensive restaurants (I’ve even seen jetskis bought within the first six months of trading!).
One can’t spend the cash, ONLY the profit that emanates from the business’s trading. A diligent and sensible business owner should always leave some of the profit for future expenses that come about when you grow the business. In this respect, one needs an accounting resource to identify the profit and how much of that needs to be invested back into the business as working capital.
Mistakes can be made and generally that’s OK and normal, and that’s how the new business owner learns going forward BUT make sure that the mistakes are small and not far-reaching and that one identifies them early and deals with them decisively.
In conclusion, your entry into being independent and your own boss should be enjoyable, rewarding, fulfilling and most of all, fun!
To do this, a strong working knowledge of Excel, Word and other computer applications are essential as well as being able to communicate through the email and other social networking platforms available.
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About the Author
Brian Galloway is the Managing Member of Homeleigh Nursing Services, a small business which provides skilled assisted care and professional nursing services to private individuals, institutions and retirement facilities.
