Working for yourself can be overwhelming especially if you don?t have a plan. The initial challenges can be discouraging yet the benefits for those who endure the trial period cannot be compared to the initial struggle and pain. This model is aimed at encouraging Ghanaians and other Africans establish their own businesses by providing them with some useful information.
DOING YOUR OWN BUSINESS IN GHANA: A MODEL FOR SUCCESS
Business Model For Going Into Private Business And Surviving It In Ghana
Seven Steps To Start Your Own Business
? What structures will I put in place to eliminate waste and ensure accountability?
Your answers will help you create a focused, well-researched business plan that will serve as a blueprint for your business operations, management, and capitalization. [SBA offers a tutorial on preparing a solid plan. For a comprehensive overview of the startup process click here: Review SBA?s online business course
Getting financial assistance can be a challenge in Ghana if you want to establish your own business. Unlike in the United States or other western countries where financial assistance packages abound for entrepreneurs to draw from (like small business loans for depressed communities, low interest loans and other government grants), Ghana does not yet have such support system for small businesses. In western countries the governments consider job-creation potential of small businesses. In fact, about 90% of the work force is provided by small businesses.
A good advice would be: Do not use your own money if you can use someone else?s money or the government?s. However, in the case of Ghana and other African countries citizens may need to be innovative in creating capital. One may want to explore one or more of the following options
1. Identify your expenditure and see how best you can cut down cost.
2. Renting or leasing can cost you a fortune. Consider using your home (space) initially or going to your customers, like door to door.
3. Find like-minded people and collaborate resources.
4. Consult your bank with a well-written business plan. Or find a sympathetic banker - one who is ready to listen to you when things are going tough, because they will be initially.
5. Coordinate, collaborate or combine resources with siblings, relatives, friends, etc.
6. If it is a product you are going to offer, as opposed to services, you need to find a reliable and reasonably priced supplier or suppliers. If they are imports, make sure you have contracts with a reliable transport company and customer broker - from the door of the supplier to yours, as you would not have the time anytime you make an order to start looking for these service deliverers.
7. Find ways to save money, and so press into service as many people as you can when you start. If you have a friend who is good in some trait, say carpentry, get him or her to help set the shop up, so should you with a painter friend, an accountant, your own family. But by that same token, do not put round pegs in square holes - if your friend cannot do any of these things, find a professional or someone who can. And a professional does not have to be the top in his or her field. You can hire a bookkeeper instead of an accountant, a law student or professor/teacher who needs extra funds to do your incorporation instead of the most expensive lawyer in town ? you get the drift.
8. You will need extremely good, reliable and honest employees, and pay them well. Make them feel a part of the business (e.g. pay them bonus or perhaps give them stock options) and treat them with respect.
9. Do not be afraid to get your hands dirty, roll up your sleeves and do not just fold your arms in the shop or business and just give orders.
Your choice of financial year is important. It is usually better not to choose the same period for your personal and company fiscal year. Personal is usually from January 1 to December 31 every year. For the business, choose say, April 1 to March 31 or June 1 to May 31. This way, the business gets to use the government?s money (the taxes the business might owe) for three or longer months.
4 Write Your
1) Software ? http://www.bplans.com/mk/bpp.cfm
What is a Business Plan?
A business plan defines your business, identifies your goals, and serves as your business? resume. The basic components include a current and pro forma balance sheet, an income statement, and a cash flow analysis.
It is crucial that you have a comprehensive, thoughtful business plan.
? It spells out management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.
? It helps you allocate resources properly, handle unforeseen complications, and make good business decisions.
? It provides specific and organized information about your company and how you will repay borrowed money. A business plan is a crucial part of any loan application.
? It informs sales personnel, suppliers, and others about your operations and goals.
? It forces you to think through some important issues that you may not otherwise consider.
? It is a valuable tool as you set out to raise money for your business.
? It will provide milestones to gauge your success Before you begin writing your business plan, consider these four core questions:
? What service or product do you intend to provide and what needs will it fill?
? Who will be the potential customers for your product or service and why will they purchase it from you but not another provider?
? How will you reach your potential customers?
? Where will you get the financial resources to start your business? Your business plan must clearly communicate your ideas and goals. There are three main points you should address throughout your business plan. Focus.
Be specific about who you are, what your product or service is, and how you will establish and grow your company.
Customers.
Know your target customers. Understand the people or group you intend to sell to and how your product or service will meet their needs.
Goals.
Be specific about how you measure success. Explain your income and growth targets. Outline and explain what is reasonable for your market, product, and competition. Determine Break-Even point and WHEN.
The final step before developing your plan is the pre-business checklist. You should answer these questions:
? What business am I interested in starting?
? What services or products will I sell? Where will I be located?
? What skills and experience do I bring to the business?
? What will be my legal structure? (See overview below)
? What will I name my business?
? What equipment or supplies will I need?
? What insurance coverage will be needed?
? What financing will I need?
? What are my resources?
? How will I compensate myself?
Your answers will help you create focused, well researched business plan that should serve as a blueprint. It should detail how the business will be operated, managed and capitalized.
Once you have completed your business plan, review it with a friend or business associate. When you feel comfortable with the content and structure, review and discuss it with your banker. The business plan is a flexible document that should change as your business grows.
NOTE: You may contact other websites for further inputs to create your document. Plans can be from 5 to 40 pages long. The average is 10-12 pages of text and 4-6 pages of financial information. (For assistance click here: Build a Business Plan tool).
2) Internet search ? Enter ?Business Plan? in Google to obtain great sources ?
http://www.google.com/search?hl=en&q=business+plan&spell=1
3) Examples of business plans - http://www.bplans.com/sp/
4) Self knowledge
5) Consultant
Get help, if needed
5 Resourcing your Plan (Finance)
1) Personal
2) Family
3) Cooperatives
4) SUSU Groups
5) Banks
6) Venture Capitalists
7) Stock Market
8) Credit
6 Implementing
Start small and pilot as a first step before going full scale. Make sure everything is in place.
Put a monitoring group/process in place to get business off the ground
7 Evaluating
Implore evaluation process
1) FROMATIVE Evaluation ? to improve SUMMATIVE Evaluation ? to either quit or continue
Types of Business Organizations
When organizing a new business, one of the most important decisions to be made is choosing the structure of a business. Factors influencing your decision about your business organization include:
? Legal restrictions
? Liabilities assumed
? Type of business operation
? Earnings distribution
? Capital needs
? Number of employees
? Tax advantages or disadvantages
? Length of business operation
The advantages and disadvantages of sole proprietorship, partnership and corporation are listed below.
1. Sole Proprietorship
This is the easiest and least costly way of starting a business. A sole proprietorship can be formed by finding a location and opening the door for business. There are likely to be fees to obtain business name registration, a fictitious name certificate and other necessary licenses. Attorney?s fees for starting the business will be less than the other business forms because less preparation of documents is required and the owner has absolute authority over all business decisions
2. Partnership
There are several types of partnerships. The two most common types are general and limited partnerships. A general partnership can be formed simply by an oral agreement between two or more persons, but a legal partnership agreement drawn up by an attorney is highly recommended. Legal fees for drawing up a partnership agreement are higher than those for a sole proprietorship, but may be lower than incorporating. A partnership agreement could be helpful in solving any disputes. However, partners are responsible for the other partner?s business actions, as well as their own.
A Partnership Agreement should include the following:
? Type of business.
? Amount of equity invested by each partner.
? Division of profit or loss.
? Partners compensation.
? Distribution of assets on dissolution.
? Duration of partnership.
? Provisions for changes or dissolving the partnership.
? Dispute settlement clause.
? Restrictions of authority and expenditures.
? Settlement in case of death or incapacitation. ?
Corporation
A business may incorporate without an attorney, but legal advice is highly recommended. The corporate structure is usually the most complex and more costly to organize than the other two business formations. Control depends on stock ownership. Persons with the largest stock ownership, not the total number of shareholders, control the corporation. With control of stock shares or 51 percent of stock, a person or group is able to make policy decisions. Control is exercised through regular board of directors? meetings and annual stockholders? meetings. Records must be kept to document decisions made by the board of directors. Small, closely held corporations can operate more informally, but record keeping cannot be eliminated entirely. Officers of a corporation can be liable to stockholders for improper actions. Liability is generally limited to stock ownership, except where fraud is involved. You may want to incorporate as a ?C? or ?S? corporation
THINGS TO DO
1) Define what the steps are
2) Describe the terminology
TIPS
1) Do not expect Instant profit
2) Prepare for the long haul
3) Start small-Preferably a pilot
4) Get the skills and business advise that you need
5) Stay within you financial locus
6) Learn to organize effectively
7) Network persistently
8) Constantly evaluate to determine viability and profitability
9) Focus on results
10) Obey the laws
BUSINESS SKILLS
TECHNICAL SKILLS
q Book Keeping
q Personnel Management
q Planning
q Budgeting
SOFT SKILLS
q Leadership
q Delegation
q Motivation
q Coaching
q Customer Service
q Feedback
q Conflict Resolution
Copyright © 1994 - 2024 GhanaWeb. All rights reserved.
