Freelance writer and political analyst Tich Tamanikwa, warns would be entrepreneurs that success comes out of conquering fear, being persistent and paying attention to detail
The notion that governments create employment is wrong. All over the world, people have been duped by election manifestos promising that if a particular party is elected, it will create jobs for the unemployed. This phenomenon is more prominent in so-called developing nations, where the majority of people live under the illusion that only the government has the means to create jobs.
In my opinion there are two types of unemployment viz; one where the economy is not able to create significant numbers of jobs for its citizens. The second type of unemployment is one in which an individual is employed but not in the type of profession or work that he might have studied at high or vocational school and/or university.
A good example is a medical doctor who is working as a taxi cab driver. This is a form of unemployment due to the fact that this particular professional is not fully utilizing their vocation due to random factors.
In my previous article about unemployed graduates in Zimbabwe, I pointed out some of the characteristics found in the make-up of successful entrepreneurs who were school dropouts.
In this article I want to focus on the dynamics involved in creating self employment or a business with a potential to grow into a successful enterprise.
GOING INTO BUSINESS
Anyone who leaves a full time job and opts to start their own business should be aware of the risks such a venture entails, and of the fact that more startups end on the scrap heap compared to the numbers which succeed and flourish.
The risks of venturing into business can be categorized as follows:
Risk of uncertainty, this the type of risk comes with making any decision. Uncertainty brings with it a fear factor and this is where the risk takers are separated from the risk averse.
Financial risk, going into business means foregoing a wage or salary, however, if one is unemployed, there is nothing to be foregone but there is potentially a lot to be gained, by going into business.
Market risk, this refers to the vagaries associated with markets. They range from product unacceptability through competition right up to absolute failure to takeoff in the market.
Besides dealing with risks as described above, if one decides to go into business, they have to make some important decisions which include but are not limited to:
- Type of business. Before an individual starts trading, they have to form a company and there are generally four types of companies that can be formed. These are sole proprietorship, partnership, private limited and joint stock or public limited companies. Each of these types of companies has its advantages and disadvantages but I will not go into detail about that in this article.
- Sources of capital. This is the biggest challenge which every entrepreneur faces. Funding sources and availability depend on the type of organization as described in (1) above. Every business requires capital, both human and financial, in order to take off. Financial capital can take the form of loans from friends, family and lending institutions.
Government and some quasi-government organizations can also provide seed capital. Venture capitalists are very popular sources of funding nowadays and they are growing in importance. A notable coterie of venture capitalists in Zimbabwe is Simba Savannah, a reality TV show featuring some leading Zimbabwean entrepreneurs like Nigel Chanakira and Florence Ziumbe.
- Market offering. This refers to the product or service that the entrepreneur is going to offer to the market. New products or services may require more effort to gain market acceptance, but once gained, the entrepreneur can reap hefty profit especially if it is a new innovation. Generic products may face stiff and ruthless competition from established suppliers to the extent that the new brand may be killed off at the introductory stage.
- The market. This has many parameters and is measured in terms of geographical extent, demographic spread. The former refers to the actual physical and environmental market as depicted by place whilst the demographic spread refers to the population dynamics as they pertain to the demand for the product.
Taking the risks associated with the business such as financial and market uncertainty coupled with biting the bullet and making informed decisions on the four elements above, one can move from the ranks of the unemployed. However, mere movement from the ranks does not mean one has succeeded.
Businesses are built by conquering fear, being persistent, paying attention to detail, following up on leads and having a vivid picture of where one is going. These elements are the fuel needed to embark on the long journey of entrepreneurship and business acumen.
Tich Tamanikwa is based in Canada where he runs an Internet business. He can be contacted at email@example.comTich