In order to start and run a business that will become successful (whether you unemployed and want to get out of poverty or self-employed and want to grow into a small business or a small business that want to grow into a medium business) you need the following:
1. Right Mindset – Free from mental and ideological barriers
2. Business Skills – How to manage a business, customers and money and some commonsense.
3. Work Skills – Technical skills (theoretical, practical or both) in the industry you want to get into. This can be via a trade. Even if an entrepreneur is buying and selling they may still need a work skill such as knowing their products.
And 4. Enough money to start the business (depending on business). This does not have to be a lot of funds but enough to cover starting needs.
When we say business skills or work skills we are not referring to a formal qualification this can be knowledge that has been gained through self-teaching or taking a course or via work.
Do not underestimate the importance of all three, a person can have great business acumen but if they have the wrong mindset it will lead to failure, while someone can be the most skilled artisan but if they don’t have business acumen they will also fail. The same can be said with someone with a great mindset but no skills. Mindset isn’t really a skill than it is a mentality, which is why it has its separate page but it is still important with the wrong mindset you are unlikely to succeed in business.
When you are an individual starting a business you need to know a little bit of both: business and skill.
When it comes to business skills basic maths literacy and common sense in how you conduct yourself goes a long way. The rest: day-to running, management, growing via marketing etc. can be researched and learnt as needed.
If you have no idea what to do next, or business you want to get into here is a skills model you can follow to guide you. It is incomplete but may provide insight.
No technical skills, no business skills and no funds
This means you have 0/3 characteristics
a Technical skills, no business skills and no funds
b No technical skills, business skills and no funds
c No technical skills, no business skills and funds
This means you have 1/3 characteristics
a Technical skills, business skills and no funds
b Technical skills, no business skills and funds
c No technical skills, business skills and funds
This means you have 2/3 characteristics
Technical skills, business skills and funds
This means you have 3/3 characteristics
0 No technical skills, no business skills and no capital
This is the category where most unemployed South Africans fit into. Some maybe had an entry-level job before but with no real skills to start earning a living on their own, while others have never had formal employment. To compound the matter South Africa does not have a very good education system that prepares people for the real world out there: logical and critical thinking these characteristics are often missing even on people with a secondary education.
This category has the hardest time starting their own business and is by far the most difficult category to help. We are talking millions of people, possibly tens of millions.
If you are in this category the reality is there is not much we or anybody else can do to help you without a substantial amount of money and effort far beyond most means (even that of our government); because there are so many the help they will get will be based on luck, like a lottery. We don’t work on luck. If you find yourself in this category and want to start your own business you firstly have to help yourself (starting with having the right mindset, self-reliance and taking responsibility for your life). If you can get yourself to number 1 below then you will find yourself in a better position than millions out there (your competitors for success).
The Right Mindset
The reason why most in this category don’t get anywhere is that they are waiting for someone else to help them. If you are in this category and reading this then you have access to the internet and can learn about the business you want to start, even if it’s just theoretical, you can access the lessons learnt by others they are willing to share. Youtube is free, Udemy courses start at R100 when on sale, lots and lots of other resources out there. Even if you don’t have data, there are libraries within range of most South Africans where you can learn about a business and industry.
Dreams and Delusions
Another reason why most in this category don’t get anywhere is that they have unrealistic expectations. If you have and no money and no skills, then you cannot possible try to start a highly technical and capital intensive business. You have to start out at the lowest point in your businesses value chain and work your way up. You start in retail (buying and selling), then wholesale (buying and selling in bulk), then distribute (your own warehouse) then manufacture from your facility (if you want), hell you can even vertically integrate if you ready (do all).
I get people in this category that want to farm large scale. Let me tell you something about farming that the politicians don’t tell you: it is a brutal business; it is both labour and capital intensive (and often want to be undertaken by people that have never had a job before). One mishap and not even of your doing (and often out of your control like a natural disaster) and you can lose everything losing months, even years of work in the process (during which you had zero income). If this sounds like you, close this tab right now, we can’t help you here.
People in this category that want to start their own business have a long road ahead of them, and be prepared for years of toil, patience and delayed gratification, they have a lot of mistakes to make and almost certainly they will see a major failure, but after that they will have learnt so much (if they want to) and be better primed for success.
If you want to start a business in an industry you have no skills and experience in you need to immerse yourself in that industry BEFORE going looking for help. If you know nothing it will be very hard to teach and help you. You need to understand where you fit into that industry, business or value chain. You need to know as much as possible. You need to immerse yourself to at least develop a theoretic understanding of the business and value chain. That is your starting point. This theoretical knowledge will not only give you a better idea of the industry (and whether it is for you as in the farming example above) but it will help you in future by putting you in a better position to be helped. If for example you are willing to work for what you can learn and not earn, the company that you will be working at, probably does not have time to teach you everything from scratch so if they ask what you know and you say “nothing” you going to seem like a burden.
I get so many people who say they want to start a new business in x industry but then they haven’t done any research about that industry. Smuse is about helping people to help themselves, if you don’t have the temperament to at least gather some knowledge on your own without someone helping you. You won’t find a lot of help here. So in short if you are unemployed with no skills and not willing to learn foundational knowledge on your own then Smuse can’t help you. There are millions like you in South Africa. You need to lessen the competition so to speak and learn something.
How to get skills (cheapest to most expensive)
Teach yourself using the local library or the internet.
Take an online course, aka MOOC – Massive open online course. This will allow you to learn a skill in an affordable but more structured way.
Take as assisted online course unlike MOOC’s these courses take less students and are more focussed and cost more money.
* Assuming a reasonable level of education and maths literacy.
Work for what you can learn and not earn.
A normal person/employee has to go through a (business) development program to get their mindset right after being employed.
A note on unemployed graduates
If you studied, no matter how long, you must be willing to treat your first job like an internship just to get your foot through the door. So you will get experience and contacts in the industry and people will know you, and even look out for you in future (lots of industries have a brotherhood mentality). I kid you not, when I left the place where I was trading my skills for office space, a guy I never saw before came knocking on my door (literally the front door of my house) offering me a job as he had heard I was in the industry. I had another guy that was printing for people that had contracts come to me for his artwork, I even did artwork for a guy that was doing litho printing. I had a fashion designer and CMT’s operator (clothing manufacturers) contacting me asking if I was available me to do their artwork. All through contacts I developed as I was willing to work.
If I had just sit on my arse how would these people know me? They wouldn’t I would be blaming others for my problems. You have university graduates standing at the robot, even on Twitter begging for work? I mean seriously go and volunteer at an NGO if you have to, you will get experience and most NGO “bosses” know donors who are flush with money and can get you contacts (you might even end up working with the chief illuminati George Soros one day :D).
If you thinking you have loans to pay or a family to feed and cannot work for free, there is a chance you will still be in that same position in a year, five years or a decade and end up working in a minimum wage job like a shop assistant which does not help your career.
1 a Technical skills, no business skills and no capital
This is usually where someone finds themselves after they worked for a boss for a few years, maybe they in a dead-end job, they lost their job or simply want to control their own destiny. This puts you miles ahead of the person at 0.
In this case you have a skill and have a pretty good idea of the value chain you operate in, you might not know the whole supply chain or industry through and through but you know your stuff.
You are one, one half or a third of a business depending how you look at it.
1 business – you can start freelancing and earning money, hopefully the business you are in you get a deposit to start work or you get paid quickly.
How you can get help here:
Read Effectuation Theory, Bird in Hand Principle & Crazy Quilt Principle
Know who you are and what do you know
Post an ad in our community advertising your services, ideally you want to join an existing value chain. But you goal is to become self-employed and even start a small business.
1/2 of a business – you connect with someone with business skills, space, equipment etc. and you start a business.
Read Effectuation Theory, Bird in Hand, Affordable loss & Crazy Quilt Principle
Know who you are, what do you know and what you can afford to lose (time, effort and money).
1/3 of a business – you and a business skills person connect with an investor to fund the business. You are the technician, the business guy the day-to-day manager and the investor the entrepreneur guiding the business. Now you thinking but I said nobody funds startups in SA, true, but in this case you will usually get an introduction via a contact that will vouch for you.
Read Effectuation Theory, Bird in Hand Principle, Affordable loss Principle & Crazy Quilt Principle
Know who you are, what do know and who you know. This is where industry contacts come into play, maybe you hear that X Company is getting out of a certain business and looking to sell their assets, you have the technical expertise, the manager has the business expertise and the investor has the money.
If on the latter two you thinking what would make a skilled person different from an employee in this case: skin in the game. You will share in the success and failure.
2b Technical skills, no business skills and capital
This is usually where someone finds themselves after they worked for some years, saved up or was retrenched or “took the package” and has some funds available. Depending on your age, you might be better off either sticking with what you know or buying into an existing and proven concept such as a franchise (depending on the funds you have available).