Frequently Asked Questions (FAQs) On Starting A Business- Part 1

In the month of November, we have looked various topics focusing on ending a business year, writing an annual review and beginning a new business year. These articles were geared towards providing budding entrepreneurs with important insights that will help them end the year on a solid foundation and facilitate a smooth transition into the New Year.

Throughout my career—which has spanned over 40 years—working in Arts & Culture, the film industry, media finance and more recently the African entrepreneurship ecosystem; I have interacted with a lot of people who have sought my advice and mentorship on the subject of starting a business.

Today, we will begin a two-part series of some questions I’ve been asked over the years with corresponding answers drawing from my own life experiences. It is my hope that these insights will help people who are hoping to start a business in the coming year as well as new entrepreneurs who might be mystified about some of the foundational building blocks of their businesses.

Q: What type of business should I start?

A: Your Idea Can Transform Africa.” From this, in 2015 when we launched the now renowned 7 Pillars of TEF Entrepreneurship Programme which birthed 1000 companies across 54 African countries with well-developed products or services every year.  They brought people and people brought markets, the source of revenues. What I discovered over the five years of reading thousands of applications from African startups, is that a single great idea is the most important first step towards creating a business. Today, we know that Jack Ma, Founder Alibaba Group can build pyramids out of his billion-dollar notes, but we also know that he started with just an idea, a dream to build an internet business. As an English teacher, he was neither a technology expert nor a businessman.

Ideas, as I also discovered reading Marc Randolph’s That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea, don’t “appear in a moment of divine inspiration”. The truth, writes Marc, is that for every good idea, there are a thousand bad ones. He shares a list of ideas he pitched including “customized sporting goods. Personalized surfboards. Dog food individually formulated for your dog”. These were ideas he spent hours working on. “Ideas I thought were better than the idea that eventually – after months of research, hundreds of hours of discussion, and marathon meetings in family restaurants – became Netflix”. Reality is no one knows what works. But in 1997, all that Marc knew “was that I wanted to start my own company and that I wanted it to involve selling things on the internet”.  

When I started working in television, I began carrying a small notebook where I would write ideas for programmes. They were my databank.  My advice is you start building a bank of ideas, read wide and deep about those who have built successful businesses from ideas and learn from their stories. Learn also from stories of failures and use them to succeed. Marc Randolph’s That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea is a great place to start. It is a story of how they went from personalized shampoo to Netflix. But it is also a story about the amazing life of an idea: from dream to concept to shared reality.

Good business ideas start with brainstorming. So, go brainstorm your list with family, friends, colleagues, in fact anyone who will listen.  Sign-up for conferences, forums, and networks of start-ups, not policy makers, where you can test some of your crazy business ideas and also meet the competition who may already have launched a business not to dissimilar to your ideas/s. Study the market, your governments 5 or 10 year plans, understand their strategic priorities: agriculture, infrastructure, ICT, Ecommerce, tourism, education, media, health, entertainment and so forth.

We know that entrepreneurs are problem solvers. Where others see challenges, they see opportunities.  If you are thinking of starting a business, you must first identify that opportunity then define the product, and/or service including:

  • What is the problem you are trying to solve?
  • Who exactly has this problem?
  • What is your solution?
  • Which features of your solution are new?
  • What will it cost to build these new features?
  • Which features of your solution already exist?
  • How can you exploit these existing features?
  • Are your users the same thing as your customers?

Q: Do I need a business plan to start my business?

A: The simple answer is YES. Writing a business plan is essential and while I am not a fan of a “formal business plan”, I do believe you need to ground your business idea. Business plans are about walking the talk. This is your road map and your daily touch point. A business plan is not something you write and put in the bottom draw. Like your business, it is a living, dynamic document and your guide. Central to the 7 Pillars of TEF Entrepreneurship Programme I designed, was the assembling of a business plan based on 10 modules as set out below:

  • Defining Your Idea, Product, and/or Service
  • Scoping Your Market Opportunity
  • Developing Your Product and/or Service
  • Pricing Your Product
  • Marketing Your Product
  • Building Your Team
  • Structuring Your Company
  • Managing Your Resources
  • Raising Money
  • Building Your Network

In developing your business plan, you are effectively thinking through all aspects of your startup from: understanding the problem, your solution, and how they fit together; gauging the market, including customers and competitors; defining and figuring out the core features of your solution and how to build them; getting specific about numbers, including pricing and unit economics; assessing the strongest narrative that sells your solution;  identifying and recruiting the right people for your team and putting the right legal structures and protections in place. You are also addressing managing your resources, time and money and building networks. The process of developing a business plan enables you to spot problems and obstacles. It will help you to explain your business idea with clarity to your potential customers, clients, business partners, vendors, team members and of course funders!  All this before you launch your business!

For how to create your business plan, there is no shortage of help out there from how to create your first successful business plan,  software which simplifies building and sticking to a business plan to a step by step guide to writing a business plan. A good place to start your research is https://www.entrepreneur.com/

Next week, we will bring this series to a close with more questions. To read the other articles that have been shared this year, see the links below:

5 Key Elements That Must Factor Into Your New Year Business Plan

5 Key Things That Must Be On Your End-Of-Year Business Checklist

5 Guidelines to Write A Detailed Annual Business Review

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