You have decided to take the plunge, raise the money from  your savings as well as from your family, and have now ‘inaugurated’ your small business.  What are the things to keep in mind?  

Don’t take risks you cannot afford.  

As you venture on your entrepreneur venture, there will be many mistakes you will commit.  Even the most successful enterprises commit mistakes in which they lose people and money.  The reason they are still successful is because they can afford to get up, learn from their mistakes and move on.  Because the loss was something they could afford.   As you move forward, there will be opportunities that are yours for the grabbing.  But as they say, proceed with caution and don’t get greedy.  If you have a pot money of 10,000 peso, make 500 or 1,000 peso bets.  However, in your haste to progress, you may be tempted to see an opportunity for you to risk all , and put all the money in the table.  It would be great if you make it, but if not, then you basically will end up with nothing.  Worst, you bet all you have, including what you don’t have ( you borrowed), and ended up not only without money, but on debt.  

Don’t try to take on the Giants.  

It is great to think big, but sometimes it pays to think small.  In fact, a good advice is pick on people your size!  Don’t take on somebody you cannot afford to wrestle!  Thus, it is important that if you pick a product to sell, make sure your potential market size is BIG enough  - meaning you have a potentially big enough sales to sustain your operations.  However, it is also important that you pick a market SMALL enough so that when you are successful, you don’t attract the giants to come into the market and pick on you.    

Watch your Costs!  

As you grow the company, the thing you have to make sure will happen is that your overhead cost should start to decrease as a percentage of your sales.  The way to accomplish this is either to increase your sales at a faster rate than your expenses, or if your sales is not growing, then your expenses has to be decreasing.   This is a natural progression, because as you become more familiar with the operations, then it should not take you as much effort to do the same thing.   Always remember that more people have lost their business because they went into reverse.  Their cost rise, while their sales don’t.  Every year, your employees expect a salary increase from you, while other costs, like rent, electricity and the like keeps going up all the time.   It is also a natural that once you have initial success, you may want a better office, new air conditioning , new delivery vehicles, or new people.  What’s worse, some people divert business money  into personal use.  Newly successful entrepreneurs are now seen sporting new clothes, or cars.  Watch that cost!  There will be enough to splurge when you can really afford it, and know that the longer you keep from gratification, the better will be for your business.  

There will be nobody else like you!

A friend who I often meet always comes to lament to me. His business has not been going on well ever since he choosed to expand aggressively, and increasingly, I always hear him why, and there were 2 main reasons. - his employees were not as hardworking as he is. - his employees were not as talented as he would want it to be. As an entrepreneur, especially one who have made your mark, it is only natural that we exhibit the kind of energy, industry and passion — after all, we started the business, it is our idea,  it is our name on the line,  and we have every stake and intention to make it succeed. And it is not unusual of course, that the founder, or entrepreneur is also the most technical oriented, or knows the most of the business. You cannot count on getting employees that will be like you, and therefore, while you celebrate your uniqueness, and ability, try to structure your business to move forward with less enthusiastic or hard working people than yourself! In short, if you were able to succeed initially by working 80 hour weeks, then you should start planning how to sustain it by expecting people to work less.  After all, there is more to life than just the success of your business.  There is also your family, your health,  and your social life – important things that you should not ignore.

I started to write for SME Insights,  a national bi-monthly Small and Medium enterprise magazine last July 2006.  These are the series of articles I wrote for them which I am putting on here.