Originally Posted by
adrianh
A couple of things. I started out exactly the same way as you want to.
1. FNB is ultra ultra $h1t. Their online banking the THE worst, most complicated arse about face system I have ever come across. Their ATMs are even worse, the machines work arse about face compared to other machines and I absolutely despise them. I can give you a list of things if you like why I think their IT systems are totally crap. I have business account with ABSA and I also wanted to change to FNB. It was such a traumatic experience that I eventually gave up and just canned the entire FNB idea.
2. Get a grip on the math that goes into running the business. Nothing complicated, work out what your product costs to make, work out your selling price and work out your profit. Most of all figure out how your cashflow works and how you should set it up so that your cash flow timing doesn't throttle you. You also need to remember that cash flow is the thing that keeps the business running.
3. You could project how you need to grow as your sales increase. To do this you need to know a number of things, again, how much does it cost, how much can you sell it for, what is your cash flow timing, how long does it take to make a product. Using this information you are able to work out how many products you are able to make per month given all those constraints, maybe you don't have a lot of time, may you don't have enough cash, maybe the cash flow is a bugger up.
4. DON'T work with pie in the sky and wishful thinking, be brutally honest with yourself. If you know that you will only work for 2 hours a week then don't build projections on 5hours a week.
5. DON'T work on best case scenarios, you are far better off working on worst case. What will you do if the cash doesn't come in, if your labour gives you a hard time or whatever. Rather factor in the fact that $h1t happens and that things don't work out as you plan rather than bull$h!tting yourself by making out as if it is all perfect.
6. DON'T get into it if the math doesn't make sense. DON'T wish that you will make lots of cash one day so it is ok to take a fat knock now...pie in the sky WILL bite you hard.
7. Once you have a good grip on the math then work on a little admin system. How will you log your expenditure, your time, your sales, your outstanding work, your progress, deadlines etc. Forget about all the fancy systems right now, just work in a simple way so that you are able to clearly understand your admin method. I'm lucky, I give everything to the wife and she runs it in Pastel so I am able to concentrate on technical matters. If you do not have a person that is competent then you just need to put a method in place to record everything and do the math every couple of days or whenever you buy and sell.
8. As far as I am concerned one should stay away from marketing unless you are absolutely sure you are able to deliver. We marketed our products and I got 10 times as many orders as I could handle - it is not as wonderful as you might think because you look like a d00$ when you are unable to supply. Rather grow slowly making sure that you are able to deliver on your promises. We totally stopped marketing an entire product range because the demand simply outstrips our ability to supply.
9. DON'T take cash in advance especially for big orders unless you are able to supply within a reasonable timeline. If you do take cash in advance DON'T spend it on other stuff because it is going to bite you. Take the cash and buy whatever supplies you need to complete the job.
10. Be very careful with giving discounts to get business. Remember that the time it takes and the amount of money that you need to make the products doesn't change and you screw yourself in the long term.
11. Don't lick a customers butt, "The customer is always right" is BULLCRAP. People will take advantage of you and screw you over big time if you let them. Stand your ground and stick to your price structure if you feel it makes sense.
12. My motto is this "We manufacture high quality products for high quality people". Don't trade with the rats and the mice. Rather position yourself to supply a product that is excellent rather than cheap. It you were a mass manufacturer spitting out hundreds of products each day into a saturated market it is a different story, but as a little guy making a small number of products you can only sell on quality and service.
13. DON'T think that any business is good business. I am quite happy to turn customers away if I feel that they are going to give me $h!t. I select my customers carefully because I've been bitten so many times by abusers.
14. If you don't know how to do something, ask somebody, no matter how small the issue is or how it might affect your ego. It is far better to get a straight answer that sitting with your finger up your butt not knowing what to do.
15. All them books about making millions are not particularly useful when you are one guy trying to build a tiny little business.
16. Be very very careful about whose opinions you follow. There are lots of people who stand around the braai who are quite adept at shooting you down and talking rubbish. opinions are simply worthless unless they come from decent people who have your interest at heart. Most people waffle on about all sorts of pie in the sky without having been involved in any form o small business. All those wonderful corporate ideas simply don't work when you are the one guy who has to work through the night because the customer is $h1tting himself.
17. Most of all, DON'T do it unless you love what you do and you are willing to keep on at it. By this I don't mean that you should mindlessly bash your head against a brick wall, what I mean is that you should be able to adapt and evolve all the time. If one way of doing things doesn't work then try another and another until you find a way that does.
18. There is no such things as failure or mistakes. There are only lessons learned. Yes I've messed up many jobs and I've p1$$ed a lot of people off in the process but at the end of it all those things have made me better at dealing with it all.
19. Learn to be a smooth talker and keep your secrets to yourself. You'll be surprised how the grapevine works.
20. Treat your suppliers with great respect. Electromechanica and Mantech Electronics have been very good to me over the years because I've made it very clear that I am a little guy with a little money but with lots of ambition.
Anyhow, these are some of the lessons that I've learned over the years. They may not be right for you or anybody else but they do make sense to me. The hardest lesson was to understand the math and not to think in terms of pie in the sky but rather cold hard facts...as nasty as those facts might be. If your math is wrong or you don't understand the math, you are f*cked from the outset. That is the reason why 99.99% of small businesses don't get funding and why they fail! (as far as I am concerned anyway)
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