Reality check for entrepreneurs

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So you've started your business, but you're really struggling to come to terms with how difficult it is.

Those sales projections in your business plan are looking increasingly out of touch with the reality of securing orders.

York Zucchi, a Swiss entrepreneur who has built a pan-African business in the primary healthcare sector, offers the following reality checks to budding entrepreneurs: Forget about making a lot of money quickly. The reality is that it is highly unlikely you will. It takes time ... lots of time, lots of hard work, long hours and most probably more tears than you care to shed.

This is the reality, so don’t overdramatize when things are going badly. This is all part of your entrepreneurial adventure. As with any long journey, there are uphills and downhills. Bring perspective to your journey and don’t simply throw in the towel when things aren't going as you intended.

Don't expect to make 'perfect' decisions, which means you shouldn't beat yourself over the head for making mistakes. These are a natural progression of your development as an entrepreneur. Rather make the best decision you can, and roll it with.

Avoid becoming that person with a list of businesses as long as your arm. People tend to not take these jacks-of-all-trades very seriously - quality overrides quantity any day of the week. Rather focus on what you're good at, and stick to it.

Realize that people you engage with are equally busy and that you're likely but one meeting/idea on their table. The reality is that you are more than likely not their priority.

Key takeaway: When things are not going as you'd expected, the responsibility rests on you to find a way to make things work. Simply sitting back and complaining is not going to solve your problems. Get up, brush yourself off and get on with the business of being an entrepreneur.

 

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44 comments
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  • Thayn Niemand
    I suppose this whole junkstatus thing interest rate and fuel price increases will force all of us entrepreneurs into a reality check as far as the way we do business is concerned. I mean we pride ourselves on being flexible resilient and able to persevere in the face of all hardships now we have an extra challenge.
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  • Thayn Niemand
    apart from all the red tape small business has to comply with in order to be clear certain politicians do things that make the rest of the world doubt RSA Inc. This leads to downgrading of the country leads to ncertainty and probable interest rate hikes increase in fuel price retrenchments etc etc. We have a Small Business Minister (I think) but I dont seem to hear of or notice much change of attitude to entrpreneurs. Maybe I am missing something?
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  • Nhlalala Ngobeni
    that is what i also have in my mind that i should not concentrate on making a lot of money but on getting potential clients.
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  • Thayn Niemand
    Found it... book title is How they started in tough times author is David Lester. I probably bought my copy at Exclusive Books
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  • Phindile Xaba
    True that! Good relations with suppliers is very important they will advance you the goods you do your business work out a COD with your client pay your supplier and keep what is due to your business. Voila! You realize that you didn’t have to incur any capital outlay upfront. This reminds of a story of a 20year old (he was that old when I first met him some three years ago). He made arrangements with a supplier of off-season trendy sneakers which were very much in season in South Africa they advanced him the consignment and he had 30 days to pay off. The consignment didn't even have a warehouse it went straight to his client who ran a retail store paid COD he then paid his supplier and he was in business. He now builds skateboarding parks and continues to do the same with skateboards and skateboarding apparel.
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  • Phindile Xaba
    This is a brilliant idea. Try to make a loan the very last source of capital injection. Go through all sorts of alternative funding sources before getting into anything that requires you to pay interest at the very outset which can be crippling. You know thecashflowguy in my previous life when I was part of the team that founded the Women's Club which was a women'seconomic empowerment project for a publication I once was one of itsexecutive editors. We gave small loans at very very low interest. We had a bright spark in one a young lady whose business plan was amazing to perfection. She had already takenout a loan with one of the commercial banks to open a restaurant. Six months down the line she was on the verge of folding. We came in to attempt a rescue plan but it was a bit too late to try and correct something that could have been prevented. The young lady did not know nearly enough about the industry and the very small margins in profit. Even if one may have wanted to rescue it one would have taken majority equity and put too much capital into marketing -the place was not in the right address the menu was not properly priced etc.She still had to pay back the money with interest. The business died before it took off.
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  • Thayn Niemand
    Another reality check may be to segregate clients. I have often said no deal is better than a bad deal. I have in the past checked whether the 80/20 rule applies in my business...and it does..I.e 20% of clients generate 80% of business. Yet I was using 80% of my time in the clients that generated 20% of business. #rethink
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  • Thayn Niemand
    Reality checks should be scheduled. Very often a business can experience problems during good times! So if things seem to be going well reality check time. Why going well can it be improved is it because of a certain strategy or just being in the in the right place at the right time?
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  • Phindile Xaba
    Agreed thecashflowguy. I hear you from a national point of view I think everything is really perplexing. The political environment and economic climate arenot favourable to SMMEs and there don't seem to be supportive public policy to smallentreprises.I believe that we need people whounderstand entrepreneurship to be at the helm as you say it doesn't help tohave a minister who only has something to say when there is a crisis and hadn't initiated much of anything to support the SMMEs. I do have to say that Gauteng as a province especially the office of MEC for Economic Development Lebogang Maile has not only pushed theconversation forward on then role small businesses have in the economy. He engaged SMMEs in a public discourse that is slowly bearing fruits - township economy is becoming not only a conversation point but a reality and it is gaining traction. All of this to ensure that we can have inclusive economic roles and that we do not have to move out of our spaces when there is potential for running our businesses where we are. There are economic hubs in most townships. There is a Gauteng Economic Propellor which helps SMMEs with connecting them with providing some financial or non-financial support with cheaper office spaces or no cost office spaces internet resource centres etc.Here is what I think they need good PR!
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  • Phindile Xaba
    I support #rethink. I really do. 80/20 rule must work to the benefit of the business. I would rather have 20% solid clients reliable etc. generating 80% of the business. It will be built on string pillars.
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  • Thayn Niemand
    Another important reality check is around your time management. As entrepreneurs we delegate badly! (It's easier just todo it myself). Delegating is an easy thing to do but very difficult to implement. Need to be aware of the benefits. Delegation does not however mean abdication. You still need to maintain checks and balances. It's easy to be busy reality is that we need to be productively busy (like a bee not a mosquito).
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  • Michela Gordon
    Absolutely they need good PR because I think this is a fantastic initiative and had never heard of it until now PhindileXaba!! Thanks for sharing that :)
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  • Phindile Xaba
    Just want to share this story of patience from an amazing entrepreneur. I had the pleasure of following the story of an American publication called The Atlantic which had been hemorrhaging for years. After 154 years about to fold its owner Mort Zuckerman finally let go of it sold it to a very seasoned entrepreneur David Bradley for a mere $10 million as far back as in 1999 remember what was happening in 1998? Digital had started to take off print publications were experiencing serious economic challenges. In its first year Bradley ran at a loss of $4.5 million (this is in dollars right?). By the time Bradley relocated The Atlantic's headquarters from Boston to Washington D.C. in 2005 he had lost so many millions on the venture with losses soaring as high as $8 million in 2002 alone. He soldiered on. He recruited James Bennet from New York Times in 2006 and Jeffrey Goldberg from New Yorker in 2007 respectively who both brought their corporate expertise into the business and drove it from a digital first business strategy. And the cherry on top was Justin Smith who was on the verge of being laid off (retrenched) from a publication The Week he was an advocate of investing in online products. The long and short of it is that for the first time after 12 years or so in 2010 the publication made US$1.8million in revenues within four years of implementing the innovative digital strategy. The Moral of the Anecdote: PATIENCE RESILLIENCE PERSEVERENCE INNOVATION AND SUPPORT STAFF WITH EXPERTISE THAT SERVE THE BUSINESS
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  • Thayn Niemand
    ??
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  • Michela Gordon
    I agree but when business is tough then you're tempted towant to turn no deal is better than a bad deal into any deal is better than no deal. I've found that sometimes you have to apply the 80/20 principle the wrong way with a particular client with the view to getting a bigger piece of business from them that can then be more profitable and less time consuming for your business - a bit like agreeing to dothe invitations for a function and then getting the entire event management of their next function if you're in the event management business...
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  • Michela Gordon
    What an amazing story!! Certainly has inspired me this morning...
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  • Phindile Xaba
    True! Points well made. To add to those I have to say that I prefer self-driven people and self-starters these kinds of people are able to take delegated tasks with such ease otherwise delegating to someone who needs constant supervision is time consuming in itself. I think this places importance at recruiting level. Processes have to be thorough to get the right people. What I have also managed to do because I am really a small outfit I delegate work through farming it out to other service providers who specialize in expertise I need to support me and should I have too much on my plate I pass it on to them. Their turn around time is so fast and they produce good quality work it makes me look good in turn. Right!
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  • Thayn Niemand
    It is tempting and I know of businesses that take work st cost just to keep doors open. But then is that a bad deal? I think a bad defl is one when you do a deal that costs you without any possibility of a recovering those costs in one way or another
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  • Phindile Xaba
    Michela I always go back to this story when all chipsare down. Sometimes when you know enough about your core business you need other people's help to accomplishyour dream.
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  • Thayn Niemand
    In a nutshell then to my mind as the owner of a small business the reality checks revolve around the totality of your business. Should not be a negative connotation but even in Boom time! Key aspects to reality evaluation are; cash flow - careful management always critical business operating plan - reference guide to check that that you are on the real path you planned originally for your business (especially areas of sales marketing cash management and admin) persevere- tough times can offer opportunities to committed entrepreneurs
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  • Phindile Xaba
    That is very clever thecashflowguy Scheduling reminders is IT!. Use technology to set up reminders - well in this case reality checks. these can be done in many different ways. One of the ways I enjoy is a morning check - in and going home check out. It is amazing what you can achieve in terms of measuring your reality on the basis of your team's input.
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  • Thayn Niemand
    If it's going to be it's up to me! That's reality. But there is an African proverb that we would all be taking note of goes something like this if you want to go fast go alone but if you intend going far go with a crowd (team)! Cheers
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  • Thayn Niemand
    We all have to hustle for business why does the government want to make it more difficult for entrepreneurs?
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  • Michela Gordon
    We also need to be creative in how we do business and treat this as just another challenge in our businesses. There is always another way around a challenge - you just have to think harder and work harder.
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  • Thayn Niemand
    On the upside if we accept that Rome was not built in a day and we have a viable and sustainable business committed business owners will realize that they will have less competition as the current reality in RSA seems to be daunting for the non-committed entrepreneur
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  • Thayn Niemand
    Reading a book about businesses that started in times of hardship. Walt Disney's first company went bankrupt and Penguun books achieved record sales during world war 2!
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  • Thayn Niemand
    Checking out the big boys doing retrenchments may make an entrepreneur a bit nervous but on the upside.... there will be a lot more staff to choose from ??Reality checks need not necessarily from a negative perspective
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  • Thayn Niemand
    an owner of one ofthe smaller now succesful succesful companies was evicted from his house due to non-payment of rent lived in his business premises and used a dishwasher and hosepipe to bathe!
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  • Phindile Xaba
    Thecashflowguy agreed the upside is that one may have a more experienced pool of potential staff to pull from once retrenched. And another way to look at it is that there may be more entrepreneurs contesting to capture the same market you are in. These are people who have had the experience in a corporation and may have a sense of being responsible in a work place. Their disposition is that of being self driven meeting deadlines working to schedule etc. I often say to young people who want to start businesses - there are two ways you can do this and both ways are not easy - the first is to gain as much expertise in the chosen industry as possible which means work for somebody else and earn the necessary experience and identify the gap. Go start you thing. The second way is to just jump into it and learn on the job. None is easy it requires the same amount of courage resilience and perseverance.
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  • Thayn Niemand
    Just wondering though.... howdid he afford a dishwasher.??... probably part of the business equipment :)
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