How do you start your own business?
Chad de Freitas is a young business entrepreneur who is currently busy with his second startup company. He recently wrote a blog about some insights that he gathered from starting his own business and what he has learnt up to now. We are going to chat about entrepreneurship today and if you:
- Are keen on starting your own business or
- Have not even thought about starting a business
- Do not know the how, what or why when it comes to business, then keep reading.
How did you start your own company?
My opportunity within business first arose as a result of being more and more interested in entrepreneurship whilst I was at university. I grew up with a bit of an entrepreneurial instinct and 6 Months before I finished university the opportunity came up to start a coffee company. After a few meetings I decided that this is something that I would want to go for. I came up to Pretoria and Joburg and we started designing and setting up the business. That business operated for two years and it started going really well. I obviously learnt a lot along the way which is what the blog post was specifically directed at. Now I’m actually on to another business with some guys down in Ballito called Propa Food Bar which is a business focused on just providing really healthy and tasty coffee and food in very convenient ways.
What role is our school system playing in the training of entrepreneurs?
I recall when I was at university, Entrepreneurship wasn’t even offered yet as a program. You either had to do Marketing or Accounting and then, later on, you could move into Business Management. Entrepreneurship itself only became a formal degree a couple of years later. I think that gives an indication where our thinking was.
Our education system directs people at a manner of thinking rather than learning about specific things. People constantly get told that their marks are not good enough. It’s a perpetual negative reminder of their performances and now they need to somehow go and start businesses. We are taught to think in a certain way and as such a lot of people are directed away from entrepreneurship and rather on becoming employees. Obviously, this won’t work in our society because at the moment there are fewer jobs than ever before. We need to create these jobs.
Do you need a university degree to be your own entrepreneur or can anyone just start their own business?
I think anyone can definitely start their own business. A lot of the time we are taught to look at certain companies, like Nike, as though they are more important. Those companies were all started by people like you and I and so I believe anyone can be an entrepreneur. I don’t think you need to have a university degree. Richard Branson is an example. He left school at a very early age and started his own business and he’s never been to university. I definitely don’t think that that is a necessity.
What drives you to be an entrepreneur?
To start your own business is really seeing an opportunity and a way to meet that need. I personally believe that a successful business is one that is actually meeting people’s needs and adding value to their lives by solving their problems. As a result, someone is willing to pay for that service or that product. I believed there was a need for convenient coffee which is why we set up that business. The same now with Propa Food Bar. It’s also an opportunity based thing.
Obviously, people are different. There are opportunity-based entrepreneurs and then there are people who are forced into entrepreneurship. Nowadays there are more of the latter than the former. I think the biggest thing to remember is that there is no model of how an entrepreneur should be. To be an entrepreneur is simply to be someone who provides a product that improves somebody’s life and make money off that. If you just do what you love and continue to invest in the areas that you do, you will naturally start to identify areas where there are opportunities to improve products. Don’t change your life into something that you are not. Just be who you are and out of those areas of your life you’ll see abilities to improve them.
Anyone can be an entrepreneur. You just need to:
- Have a passion for what you are selling.
- Convey that to somebody in a manner that will actually be beneficial towards them.
- Structure it that they would want to pay for it.
What’s next? Are there people I need to talk to? Do I need to take out a loan?
I really like the concept of the Lean Startup by Eric Ries. It speaks about the way businesses nowadays have the ability to set up in such a way that you only need to fund your next step based on the fact that you will see whether or not it can work. In the past, you would set up this massive business plan based on how you think this whole business is going to pan out. You would get funding for those things but then that doesn’t necessarily materialise.
I would say if anyone has access to the book called Lean Startup, get your hands on that. Read that book. It will help you a lot. But the core concept is simply that you want to just focus on your next step and your next sale as a means to start. Later on, you can focus on the bigger picture. The first thing is just to create a product that is going to meet that need that you see and see if people want to buy it. I think that is the essential step: Testing out your product with an audience.
Let’s take Propa Food Bar as an example. How do you create awareness for that?
We already have a little bit of momentum down in Ballito where we set up the business. At the moment we’re looking to set up a few shops around Gauteng and for that, we need to create awareness.
First, we want to try and get traffic or feet for the product within Gauteng. Therefore, we’ll do a lot of markets, a lot of sports events and a lot of events that have our target market to create awareness. Then, those customers can come to our shops. If we set up in a mall straight away it probably wouldn’t work because there are not a lot of (new) feet moving around. People drive from place to place. When people go to a mall, they already know where they are heading. We want to be targeting people where there is either no competition or where there is a high footfall. We want to add value wherever we are and setting it up.
How did you apply these tips when you started your business?
When I first started the opportunity arose because we saw a need for convenient, very good quality coffee in various locations. People were willing to pay for that because they couldn’t get very good coffee when they were dropping their kid off at school in the morning or at the office block. We set up models that would fit that, that were affordable enough that we could have lower overheads than the bigger companies but still allow us to meet our customers where they were. In terms of a plan for your business, every business is going to be different, every opportunity is going to be different. You will need to manage that process differently but I think the key thing is just to try and specialise it for your product.
6 Things to Remember when Starting a Business:
- Do things you think are really going to work.
- Keep your overheads as low as you can.
- If you have a product, try selling it through another store.
- Use your connections, speak to people.
- Get some kind of traction.
- Only purchase things that are essential to making that product available.