What stops you from starting your own business?

[BusFact]

Capital... Don't have money then don't expect to make money. A start-up in this day and age is scary... Banks are not as forth coming as they tend to advertize and our economy is chewing on another fifty-five Billion Rand demand from Eskom not to mention basic infrastructures are failing. Yet there is money to be made but outside South Africa. Friends of mine are doing well in Botswana, Mozambique Madagascar and Mauritius. Others established themselves in Canada, United Kingdom America and Australia. America especially have a big demand for Electricians, Boiler makers and so on. So if you got the skill setting up a business abroad may well be a good next step

I think you are right, in that this is indeed what stops many people from starting their business. They want to start with the "finished product". A nice factory with offices, machinery, stock and a team of sales reps. That of course does require money.

But surely there are ways to start almost any small business idea with very little capital. It just means it takes much longer to get to the "finished product".

Then you go on about skills required overseas. This sounds more like jobs, rather than businesses?

[BusFact]

Anyway, I see one of the major stumbling blocks is our labour law...

I agree its one of the stumbling blocks to increasing the size of a business, but is it really stopping someone starting a small business? Often the small business would be just the business owner - no labour law involved.

[wynn]

Often the small business would be just the business owner - no labour law involved.

Aah! now we reach the kernel of truth behind what you are asking, AdrianH has said it as well

As a solopreneur you have to do everything yourself even if it is inconvenient at the time (Big order to get out, Vat returns to be calculated, public holidays in between)

Then the majority of tentative small business people ask the wrong people the wrong questions, their accountant and lawyer says they must register this and that and do that, then they look at the labour law because they fancy employing someone to do the grind, then provisional tax before they have broken even etc., so there you have it, people are not prepared to take a chance with the threat of big brother looming like a big ogre over their heads.

[BusFact]

That's a fair point. The daunting legislation and administrative requirements is probably a big reason for many not starting a business.

I'm not convinced that scares off everyone though. Surely those who are convinced they are sitting on a profit goldmine aren't worried about taxes and stuff that an accountant can do? Won't that just be paid out of profits?

[BusFact]

Ok, so far we haven't had anyone mention why they haven't started their first business, but I suppose most people who reply on this forum tend to be existing business owners.

Those that have replied seem to indicate that there is so much daily management involved that they don't have the time.

What would stop you then from outsourcing the daily management? Is this simply not practical?

[dellatjie]

I think many people are scared to start a new business, as they will not have guaranteed income and stability for quite a while before the business will start taking of... if it does take off.. And even though you may not require a lot of capital, you need some form of backup to cover you in this time during which you will be building up the business, which everyone does not have.

[Dave A]

The real problem is most people aren't prepared to get out of their comfort zone.

[adrianh]

I recently radically changed tack this week. The business was always one entity and its now been split into two. You see, we have a business, HC that does laser cutting, CNC machining and product development. Then we have a brand, SC, which is aimed at a particular market. SC is isolated in the sense that the staff that are employed to manufacture for the brand can be ring-fenced and dedicated to that brand.

So, I had a long talk to the SC people and explained to them in concise financial terms that they do not make a profit for me, they barely cover their salaries, and that if I were to shut that operation down I would be better off, not only financially but also not having to be their mommy, daddy, social worker etc. I put the ball in their court and gave them a measure of free reign. I give them the customer orders, the ability to sell via BoB & Ebay and also all the support that they need. For the rest of it they are on their own. The brand, SC, is now run as an independent business unit with managerial & financial oversight. I no longer pay their salaries, they do. I made it clear that I couldn't care less whether they make R0 or R100K each provided that all costs are covered and I get my fair share of the profits. I made it clear that I really don't care, they can hire and fire and beat one another up, its up to them.

The guys used to sit and talk rubbish and bicker amongst themselves all the time. There was a bit of animosity between them before as well. Some were always late and they would not work overtime. The situation is totally different now, they work their asses off and no longer fight amongst themselves. I think that knowing that the boss isn't going to pay their salaries makes a huge difference. They asked to be given their own remote so that they can start to work earlier in the morning...(now that is a first) The vibe at the office has made a 180 degree turn. I don't walk around checking on them and stressing about their salaries, I now concentrate on developing my half of the business.

The bottom line is that they now understand that I am better off without them and that side of the business at the moment and that I have no qualms about shutting it down if it doesn't become very profitable very quickly. Also that I am able to earn more money than their combined salaries if I simply work alone. They have been empowered and are in control of their own financial destinies.

They wanted a pay hike....they can earn it themselves!

[IanF]

Adrian
That is great let us know how it goes. Staff management is a problem for me as well so any insight is welcome.

[HR Solutions]

That is such a fantastic way of going about it Adrian. Bottom line is they get out what they put into it - well done. There are too many people out there that want their piece of the pie but don't want to contribute to making it happen.

[BusFact]

Totally derailing the thread Adrian ... but worth it. Thanks for that post.

Haven't you essentially done the entrepreneurial "thing"? Set up the business, empowered the staff, delegated most tasks and moved on to the next job. I think its brilliant. Now why aren't more of us doing that?

[BusFact]

The real problem is most people aren't prepared to get out of their comfort zone.

Nicely summed up. I agree.

If that's their main reason, aren't there lots of business ideas that could be outsourced? That doesn't require a shift out of a comfort zone. Which leads to my previous question:

What would stop you then from outsourcing the daily management? Is this simply not practical?

[HR Solutions]

Totally derailing the thread Adrian

Not sure if Adrian is derailing the thread because he is offering a way to start your own business as the thread heading. It also answers a question why some people don't start their own bussiness - because they might be scared of paying salaries/wages and overhead costs. This is a great way for people to start their own business.

[Blurock]

They have been empowered and are in control of their own financial destinies.

They wanted a pay hike....they can earn it themselves!

That sums it up. Most employees are like children; the boss thinks for them, the boss takes responsibility, the boss picks up the pieces. The more we try to control people, the less productive they become. Take Google and Microsoft as examples: no dress code, flexible work hours, informal surroundings etc They measure output, not input and they allow workers to think for themselves and be creative.

[adrianh]

That sums it up. Most employees are like children; the boss thinks for them, the boss takes responsibility, the boss picks up the pieces. The more we try to control people, the less productive they become. Take Google and Microsoft as examples: no dress code, flexible work hours, informal surroundings etc They measure output, not input and they allow workers to think for themselves and be creative.

It's not that simple. You have to keep a close eye because quality can suffer if they are totally left to their own devices.