A survey by MYOB says eight in 10 Kiwis have had a business idea but are often held back by budgets and self-belief. So how do you turn one small idea into a successful business?
In the survey of 1000 adults over the age of 18, 85 percent said they had an idea for a business, but only 50 percent had taken action to start it.
MYOB says that 55 percent of Kiwis with the idea don’t have the financial backing, 47 percent don’t have the time and 42 percent are afraid of failure.
“Innovation is part of our DNA in New Zealand, and we see this every day in the range of SMEs that provide the backbone to our economy – but it’s brilliant to see that more widely, such a significant proportion of New Zealanders have considered starting a business,” says Jo Tozer, MYOB Enterprise Head of Go-to-Market.
“Starting a business is not only a big commitment but a very brave one – particularly in a time packed with economic challenges and uncertainty.”
So how does one get their passion project past the starting line?
Tozer says the first step is the ‘process of validation’, checking if there is a market for the product and if it is in demand.
This will also ensure whether there is anyone else in the market, but having competition is not a bad thing but rather gives an opportunity to find a point of difference.
Frances Shoemack, Founder of the successful start-up Abel Odor says telling a few people about the idea makes “you feel the peer pressure to get it off the ground and make it a success”.
But avoid validating the idea with family and friends as Tozer says their natural bias may influence the view of the product and may not help with the long run.
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The survey says that 55 percent of Kiwis are afraid of starting a business due to their financial capabilities.
Tozer says to look at the multiple options when it comes to financing a new business from financing it oneself, to getting a bank loan or raising equity capital.
“The finance option you choose needs to work for you and your business model. There are pros and cons to each option – so talk to an accountant, financial advisor, bank or business member before you decide,” she says.
“Nobody knows what they’re doing or has all the answers. So, when it comes to making decisions calling in experts without a doubt has its place, but always have the confidence to temper that with trusting your instinct – no one knows your business like you and at the end of the day, if you make a ‘wrong’ decision for the ‘right’ reasons, you’ll never regret it,” adds Shoemack.
When it comes to passion projects, SMEs sees growth at a rapid rate and with growth comes more responsibility such as more finances, working on tax and managing inventory and sales.
“The thought of this can be incredibly daunting and it’s important to recognise that business management doesn’t come naturally for everyone,” says Tozer.
She adds that with MYOB, SMEs can help streamline business workflows.
“We want to empower business owners to feel confident in their decisions and focus on unlocking their potential, so we’ve done the legwork for them.”
Making success last
Many businesses find making it past the first year and beyond as a real challenge and while there is no straightforward guide to success, adapting is something every successful entrepreneur is good at.
“Most successful entrepreneurs are always ready to respond to changes in the market, listening to what their clients and customers are telling them and ready to react to new opportunities,” says Tozer.
“But getting the basics right is also vital.”
Shoemack adds that when thinking of the future of one’s business, dream big and not to be afraid to take on the world.
“Think beyond your city and beyond New Zealand’s borders to an international customer and market. Too often we start out thinking small and this limits the plans we make, and expectations we have, from the get go,” she says.
Though the path to making a business is not one straight line, many entrepreneurs are set to face a multitude of challenges, but at the end of the day results in satisfaction from “watching an idea blossom into a great business”.
“But you have to believe in yourself, have a plan, and be ready to get some way out of your comfort zone as you respond to everything the business world can throw at you,” adds Tozer.