Starting your own business can be both challenging and rewarding
On the other hand, if you enter a competitive sector, you may encounter certain obstacles.
Experts in global economic markets will tell you that while the Israeli market is dynamic and full of opportunities, it can also pose challenges due to fluctuations in the shekel, unforeseen jolts in the economy or other factors.
To succeed in business, you need a focused plan that defines your direction and enables you to anticipate and overcome setbacks.
Moreover, an entrepreneur should not think only in terms of numbers and shekels. Running a business is a task for which you need to prepare yourself mentally. Your previous management experience may not have prepared you to take the helm of a successful business.
Stay on familiar ground
The most successful companies are run by people who know their business.
It's best not to start out in unfamiliar territory. Even if you've never run a business in your sector, it's definitely worth knowing the industry. This will enable you to avoid the mistakes that novices inevitably make in areas such as product distribution, marketing or HR strategies.
You already know the ins and outs of the industry. What's more, you can count on the know-how of your network.
For entrepreneurs starting out in a brand new sector, Dray & Dray recommends doing your homework first. There are countless sources of free information for start-ups.
Get the coaching you need
Start by building up a network of professionals - bankers, lawyers, accountants - who can give you a hand. You won't be able to do everything yourself.
Many people who want to set up a new business know nothing about preparing cash flow forecasts or managing accounts receivable.
If you can't do it - or learn to do it - yourself, the rule is to find someone to do it for you. Dray & Dray offers management coaching to help entrepreneurs cope with rapid growth, explore new markets, export and start a business.
Essentially, we can help start-ups examine their strengths and weaknesses, and identify strategies to correct shortcomings. It's also wise to get an independent perspective on key areas such as finance, sales, marketing, operations and human resources.
Prepare a well-structured, realistic business plan
It's not enough to have good ideas. Your company must also have a well-defined structure before it can take off.
Start by drawing up a clear business plan, that will help you assess your potential, confirm your commitment to becoming an entrepreneur and win the confidence of bankers and investors. Many entrepreneurs believe that a good business plan is necessarily voluminous. In reality, as long as it's precise, clear and solid, bankers will be willing to study it.
You need to present the facts that will help you "sell" your project, and the financial data to back up your arguments.
We believe that one of the key factors for success is to establish realistic projections.. A properly structured business plan takes into account the different probabilities of forecasts, and reflects real organization and judicious planning.
Form a strategic alliance
Strategic alliances help entrepreneurs reduce their vulnerability during start-up.
They allow you to spread your gains and losses. Business owners may consider teaming up with other companies to market their products and services in new markets, obtain better prices through bulk purchasing, or accelerate research and development by sharing costs and resources.
For example, a furniture design company could partner with a manufacturer to produce the furniture it designs.
Concentrate on what you do best, and leave the complementary services to other companies.
Establish clear HR strategies
Recruiting and retaining the right people is a challenge for start-ups, as their financial resources do not necessarily allow them to pay high salaries.
Many companies fail because they can't put together a team fast enough to take on the market, or because they lose employees to competitors.
A start-up company should focus on ways to position itself to attract the right candidates and build visibility - targeted advertising, job fairs, industry association membership and community involvement. To retain employees, business owners should make sure they offer competitive benefits and an environment conducive to personal and professional growth. For example, a company could award shares to employees who have been with the company from the start, to motivate them to continue growing with the company.
There are a number of attractive remuneration models for your employees, which we'll be happy to explain in detail.
Secure sufficient financing
Getting start-up financing is already a challenge, because you have to convince bankers of your value and solvency.
What's more, many entrepreneurs tend to "under-finance" their business because they have misjudged their overall needs.
Nothing should be overlooked - from equipment and hiring costs to the resources you'll need to bridge the gap between when you invoice customers and when they pay you.
When launching your business, cash flow is the key to success.
A solid cash position, in line with your business plan, will enable you to buy more cheaply, sell better and sell faster. In this way, you optimize your resources and achieve rapid, healthy growth.