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Starting Your Own Business Joan Sanger, Presenter

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1 Starting Your Own Business Joan Sanger, Presenter
Copyright, 2010

2 These are the traits of many people who are successfully self-employed
These are the traits of many people who are successfully self-employed. Assertive Creative Sociable Motivated to Achieve Logical in Problem Solving Practical in Organizational Ability Tolerant of Risk & Uncertainty You must be self-reliant and confident in what you are doing and first and foremost, you must LOVE what you are doing. We will be doing it on nights and weekend, so you had better love it. Copyright, 2010

3 These are the four typical forms of self-employment
Creating Your Own Business  Consulting  Established Businesses or Franchises  Sales Is your idea a novel one? Are others doing it? Why will yours succeed over theirs? Is it an e-business or is it location sensitive? Who will buy it and how often? Where are you getting them product and how much can you reliably get? How will customers find you? How much will it cost to start? How much can you make? If you are a consultant, who will hire you and what do you offer them? How will you help them make more money? If you are taking over an established business, why is the owner selling it? You may get clientele, products and a ready-to-go business BUT will you enjoy doing what has to be done to run it? Will the previous owner or others compete with you? Is the business reputation good with customers and suppliers? Is it a franchise and if so how does it work? There are lots of details to evaluate if you are buying a franchise. Everyone In business has to be good at sales, but if you are gong into sales exclusively, how can you expect to be paid? Commission? Salary and commission? Many of the other questions are the same. Copyright, 2010

4 Trusted Advisor Ask a friend or family member who knows you well to be your trusted advisor. This person should be somebody you can trust, and who is an innovator and a "do-er." It can be a friend or family member. Have them help you identify your strengths and challenges and what work truly motivates you. Tomorrow find this trusted advisor. Ask him or her to help you identify your strengths and challenges and write both strengths and challenges down. Refer to this list as you work on your new venture. Copyright, 2010

5 Personal Traits to consider with your Trusted Advisor
Are you: open vs. closed supportive vs. controlling secure vs. risk averse genuine vs. hypocritical respectful vs. disrespectful negative vs. positive egalitarian vs. superior inclusive vs. autocratic warm and accepting vs. cold and distant dependable and fair vs. whimsical and inconsistent cooperative and collaborative vs. competitive knowledgeable and skilled vs. inept accountable vs. blaming Copyright, 2010

6 Personal Ethics Can you take responsibility for your actions and create a positive environment? Do you understand your unique point-of-view, and how others see it? Can you bring yourself to see others’ points-of-view and the “big picture”? Are you committed to personal integrity and maintaining a strong character? Do you translate principles into behavior? Copyright, 2010

7 continued, Personal Ethics
Do you understand the areas you need to change and set goals to make the changes? Can you define goals and act or plan around them? Are you willing to let go of thinking or behaviour paradigms that sabotage your goals? Do you allow communication to flow positively between yourself and others (listening before you speak)? Do you have a personal mission statement or anything else that gives you direction? Copyright, 2010

8 Using these Traits to Persuade, Negotiate, Cooperate and Lead
Personal Ethics Self-Awareness Self-Regulation Purity of Motivation Empathy Using these Traits to Persuade, Negotiate, Cooperate and Lead Copyright, 2010

9 Ethics in the Workplace
Day-to-day operations can become overly complex when changes are superimposed on changes, until the original task or intention is lost. Often the incentives put on employees for performance lead to unethical behavior. Does the task rely on certain questionable behavior? Is the task performed as effectively and efficiently as it can be? Copyright, 2010

10 The Power of Example Think about the type of example you set every day personally and in your work Think about the message you and your organization sends to the business world and society at large Think about the power of change and the direct and indirect rewards of being ethical Copyright, 2010

11 Ethics Exercise Make a list of factors that cause people to act unethically. Each person think of two situations where you or someone you know has been tempted to act unethically or has actually acted unethically. This does not mean committing a crime like walking out of an office with a computer. It can be telling somebody information he or she should not be hearing about a business colleague, taking supplies from the office, lying to a supplier, paying less than you agreed for a service, or making a unauthorized personal long distance call from an office, for example. From your list above, what caused the person to act in this way? Discuss this. Now, think of some times where YOU have been tempted, but did not act unethically. What was different? Copyright, 2010

12 Planning--First Steps
Business Start Up Analysis Determine the feasibility of your ideas Assess your financial and time start-up requirements Assess your financial and personal risks associated with this start up Determine your financial break-even point in venture Stages of Planning and to be Summarized in your Business Plan The Vision – identify the opportunity and research its viability The Concept – explain how the product/service will work; identify competition The Details – develop a detailed description of the venture; prepare complete plans: financial, accounting, legal, management, operational The Strategy – provide vision and the key strategic elements of plan; keep strategy focused; be able to sell others (for financing) on it Copyright, 2010

13 Basics for Beginning to Plan
Decide if you will operate out of your home---this can cause issues with others in the home. Think of a market stall or an office. Plan your timelines to actually start the business. Copyright, 2010

14 Rwandan Tax Basics Basically up to 30% minus the allowed business expenses, unless you pay dividends between companies and they are exempt, so merging two companies or taking over 50% of the shares of a company allows major tax breaks You have investment allowances of 40% in new or used assets of at least 30 Million RWF and 50% in rural areas and for certain special projects You have a VAT on sales at 18%, with some exemptions Social Security contribution for employee salaries is at 8%, and 5% of that comes from you Copyright, 2010

15 Choose a Partner and help each other with your Business Ideas
Ask each other about all aspects in the two slides before. Ask each other about permits and licenses you may need. Will you need insurance or do you know if you have to pay certain taxes? Will you need a business name or a limited liability type of company? Describe how you will operate each day—the hours, what you need to do, who you need to help you. List the supplies and products you need and how much they will cost. Copyright, 2010

16 A Business Plan What is the main point of a Business Plan?
To Outline a Successful Course of Action and Estimate Costs and Income to show when you will have a Profit, how much that will be, and how you will sustain it. You need: An Executive Summary--highlights of your plan and sells it in two pages or less. A Company Summary--a factual description of your company, ownership, and any history. Products (or Services or both)--describes your products and/or services and how they are different from or will compete with other products and services. Copyright, 2010

17 Continued, Business Plan
Market Analysis-provides a summary of your typical or future customers, the competition, the current market size, and the expected market growth. Strategy and Implementation-describes how you will market and sell your product, how you will put your plan into action, and establishes milestones that you will reach. Management Summary-provides background on any management team and their experience and key accomplishments. A Financial Plan-contains key financial elements including sales, cash flow, and profits. Copyright, 2010

18 What makes a successful business plan?
A well thought out product or service idea Clear and concise writing A logical business course to follow Your ability or your team’s ability to make the business a success Shows an obvious path to profitability Copyright, 2010

19 Economic Ups and Downs In hard times when trying to build a business, remember these words, "What's your best price?” You should remember these as well when times get better! Loyal customers got the best price, the best product and the best service from YOU! CONTINUE THAT whenever possible. Do not get greedy! Copyright, 2010

20 How to Start a Business without spending too much
Try to sell a product or service that you don’t have to finance yourself AND get paid for quickly AND people need in a bad economy. People need things repaired, people want to upgrade or modify old clothing, people need help selling unnecessary possessions, people need help with their most basic needs like getting cheaper foods or cheaper housing. Think about these types of things before you start a business and how your customers may want to use your services or similar services once the economy gets better. List your Ideas Copyright, 2010

21 Financing a Business How can you find a grant, micro-financing or government program to help you start? Look for alternative financing on the Internet--peer-to-peer lending, grants, government programs, venture capital, or micro financing. These opportunities change often so do not give up—keep looking. Get someone to help you write a grant or proposal if you are not experienced. Many organizations have business incubators that do this very thing and may pair you with a business person to mentor you. Copyright, 2010

22 Practical Considerations
Most of you need a place to work from, electricity and a telephone, so place those vendors at the top of your expenses. You can work out of your home or a free place or make sure you pay your rent. You need product to sell, or materials to make your products, so staying on good terms with your suppliers is essential. Some Internet businesses may not have much of these expenses. Employees must be paid for the work they've already done. Copyright, 2010

23 Your Personal Expenses
Scrutinize your non-essential or “convenient or frivolous” personal expenses that can be dumped, or done in a more cost effective way Make a plan to organize your expenses, and write down which ones you need to eliminate or stop and how you will do this Copyright, 2010

24 Customers A major business rule-of-thumb is that 80% of your business is made up of 20% of your customers. That means 80% of your effort and resources need to be focused on the top 20% of your customers BUT--- Don't assume they will always be there. Identify what these customers have in common with new ones, so you know your core market. Copyright, 2010

25 Marketing You can also find free advertising on the Internet, by looking for free publicity at local functions or in local newspapers—see if you can write an article, build a website—this can be done almost free now. Look for places that your customers will stop and notice an advertisement that is clever and fun. Create one yourself with a free computer design program—there are many of them. Even Power Point works for this! Sales and marketing is essential to your survival, so, get creative and find cheap or free marketing options. Keeping these tips in mind and re-visit them in both the good times and bad to keep your business healthy. Copyright, 2010

26 IF you are a Manager There are elements that are more difficult for a manager to change. Below are some factors that can lead employees to make unethical choices. This is not an exhaustive list; brainstorm some other factors that may cause employees to act unethically. Unpredictable leadership or irrational, inconsistent management Constant restructuring Outdated or illogical rules and procedures made that do not reflect the challenges faced by employees Monolithic or centralized bureaucracy (no continuity or accountability) Reinforcing a “business-as-usual” approach rather than embracing innovation of employees Double standards for some employees Bad communication Copyright, 2010

27 Leadership Styles There are many types of leaders, and many fall between the two types listed below: Controlling managers or Team facilitators Copyright, 2010

28 Controlling Managers Make decisions and communicate decisions to subordinates Assign tasks Carry messages down from upper management Direct others’ work and schedule Delegate tasks to subordinates Set goals for project and team Use authority to complete the job Copyright, 2010

29 Team Facilitators Listen to staff Build a healthy and well-balanced team Coach and facilitate decision-making Facilitate group process Teach and assist only if necessary Build consensus Set goals with team Empower others to accomplish tasks Copyright, 2010

30 Do I know much about the new business I am considering?
We leave you with the following questions you can return to periodically to ask yourself for a reality check on a path you have chosen. Do I know much about the new business I am considering? Do I have all of the skills needed to start and run this business? What are they? Would I really enjoy the work day-to-day and do I know what that is? How much money do I need to make each month to keep the business going? Copyright, 2010

31 How could this business make money each month? How do I know this?
How long would it take to begin generating that much money? How much will it cost to start up and keep this business going until it starts producing a stable income stream? How much can I afford to put into the business or go into debt? What money will I live on until I can pull out some profit? Can I afford this? Copyright, 2010

32 Do I know how to find them? Can I sell to them?
Are there really enough people who want to buy this product or service? Who are they? Do I know how to find them? Can I sell to them? How many hours a week can I work on this new business now? How many hours a week will it take? (Putting the communications and business systems in place, making the proposals or marketing materials, finding customers, producing or getting the product or service to them, billing them, doing the bookkeeping, maintaining the equipment or placing orders for raw materials, organizing the shop or files and much more!!) Copyright, 2010

33 How big could the business become?
How big do I want my business to become? How many hours do I want to work ultimately? Do I want to have employees and manage them? Ask yourself these questions and more - put lots of thought into what you want and realistically what it takes to get it. Copyright, 2010

Rwanda needs more specialization in the economic output Greater participation in the global value chain To do this: you need continuous business friendly policies, infrastructure, lower transaction costs, a stable government to continue with balance of power and rule of law, skills and training Copyright, 2010

35 This is your life and your full time work.
LOVE WHAT YOU DO OR DO NOT DO IT!! This is your life and your full time work. Copyright, 2010

36 Have Passion for Your Work
Can this project potentially sustain me financially and spiritually? Will I look back and know I did what I could to provide something to the world that was positive and useful? IF SO, GO FOR IT! AND GOOD LUCK!! Copyright, 2010

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