• IS provokes sea-change

    It has been a grave mistake to defy both Russia and France, says Leopold Scholtz.

  • Nene's SAA nemesis

    No political figure seems to have the guts to speak out against Dudu Myeni, says Solly Moeng.

  • The mp3 revolution

    Ian Mann takes a look at the war between digital music and the compact disc.

All data is delayed
See More

When the money clock ticks

May 25 2011 23:13
Marc Ashton
THE announcement earlier this week that local start-up BetTech had officially broken cover caught my eye, as it highlights just how misunderstood the concept of time is when it comes to building a business.

I profiled founders Jesse Hemson-Struthers and Mark Bosman for Finweek on April 12 2010, just after the company had received backing from 4Di Capital. Thirteen months later a product and business were brought to market. BetTech itself was founded in 2009.

If you are an entrepreneur planning to take your business to market, stop for a moment and let that sink in - these two guys have spent two years conceptualising a business, taking it to a point where it is fundable and then finally bringing a product to market.

They spent two years trying to understand products, markets, and their systems and trying to clarify what it is they were trying to build.

I contrast this to a lot of the enquiries we get at Fin24 from would-be entrepreneurs looking to throw in their day jobs, raise some money and get a business going in a matter of months.

Hang on to your day job

In his book How not to start and run your small business, leading entrepreneur and marketer Scott Cundill makes the point that one of the worst moves you can make is to chuck in your day job and rush headlong into starting a business.

In short, the reason for not doing this is because there is an above-average chance you are going to fail. It is brutal but true.
It will work something like this: you will leave your nice comfortable job, tell your friends that you have set up your business, get an office and have some cards printed.

Then you will scrabble around for a piece of business and when you eventually do convince somebody to look at you, they are going to discount your services because they will see your desperation. Then the bills start rolling in and you start viewing your business by saying that your living expenses are X, and dividing your hours or widgets simply to make the bare minimum.

Either time or money runs out.

By laying the groundwork upfront, you can at least buy yourself the former when the money clock starts ticking.
We've used the example of Discovery before. They didn't just one day open up their doors and say: "Right, we're going to sell thousands of medical aid packages to South Africans." Rather, they secured Rand Merchant Bank on their concept long before they had the final product in place.

Similarly, those businesses which go out and get a few trial clients upfront to use their product or service will be far more successful than those who simply adopt the "build it and they will come" approach.

 - Fin24

start-up  |  entrepreneurship


Born to be on top

2011-05-19 10:01


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote