Tips for wannabe entrepreneurs READ MORE ON » Service tax | sales tax | PPF | mountain | money | journey | Job market Devashish Chakravarty It has never been a more attractive time to dream about entrepreneurship. The tough job market , coupled with the fear of being laid off, has made it difficult to be an employee. On the other hand, the glamour of entrepreneurship, the premise of unlimited success, and the notional freedom of being your own boss is beguiling. Every other professional is a wannabe entrepreneur, but are you cut out to be one? Also, is it actually the right time to be one? Here are a few pointers. ATTITUDE: Readiness to fail Survival account What are your liabilities—mouths to feed, EMIs to pay, personal monthly expenses? Take stock of your liquid assets to see if you have enough to cover your outflow. Your survival money buys you time to give your entrepreneurial dreams a decent shot. If you are planning on a venture in the services space, you should work towards paying yourself a salary in a few months. If you are building a product, it might take longer. Unless your family is ready to pitch in or you find an investor, make sure to build a survival account first. Emotional support Entrepreneurship is a lonely journey , much like climbing a mountain alone. At times, the going will be tough and your morale will hit rock bottom. The last thing you need is a loved one urging you to give up. Besides self-belief, it helps to have the encouragement and support of your family, friends and business partners so that you can persevere through challenging times. If you dont have this, consider getting their buy-in before you start. Back-up plan or burn the ships? Do you want to be an entrepreneur just to see if it works? Or are you seeking a permanent change of identity? If you are motivated by the former, keep Plan B and Plan C in place. This could also include returning to former employers if things dont work out. If the latter is your trigger, the easier way is to burn all ships so that there is no possibility of a retreat. You have decided to stick through whether you succeed the first time or after nine consecutive failures. Note that your choice of business is immaterial if you are switching for good. APPROACH: Easy-to-miss path Self-employed or entrepreneur? Dont confuse self-employment with entrepreneurship. In the former, your earning is dependent on the hours you put in. So, the doctor in his clinic or a tuition teacher are self- employed. The entrepreneurs time and earnings are not co-related so directly. In the former, you can start part-time by moonlighting while carrying on with your day job. The latter is nearly always a full-time commitment. Like the doctor who builds a hospital, you too can switch to entrepreneurship. Friendship vs business Let not friendship be a reason to do business, or business the reason to make frie nds. Such structures tend to fail and can cost you the business or friendship, or both. If you still want to start a venture due to friendship, clarify who will be the final authority in business decisions. As in a pre-nuptial agreement, write down the course of action if the business or relationship were to fail. Mentors to multiply Just as you reach out to seniors at the workplace to show you the ropes, seek out mentors who will share their wisdom, experiences and contacts. These are the people who have been there, done that, and have tasted their share of failures and successes. They may help you either for a stake in your business or because of your relationship with them. Good mentors help multiply your efforts and shorten the path to success. Good health and relationships Make sure that your entrepreneurial ambitions include plans to invest time and effort in your health and critical relationships. As most entrepreneurs would tell you, by the time you realise there is something wrong, it is too late to make amends. Bad health will force you to take time off or even abandon your venture. Failed relationships could kill your drive and motivation to persevere or, at the very least, make your success meaningless. ACTIONS: Taking the first steps Physical set-up The purpose of business is to earn money. For customers to start paying for your product or service, you need to get the paperwork and legal documents in order. The easiest way is to pay for the services of a trusted chartered accountant , who is already working with your mentor or an entrepreneur friend. Find out if you need to get registered as a proprietorship, a partnership or a private limited firm. Set up bank accounts, PPF account, and register for income tax , sales tax , service tax , Shops and Establishment Act, etc. Get the necessary permits and youre good to go.
Posted on: Mon, 27 Jan 2014 14:58:44 +0000
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