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Starting your own business begins with selling your first product or service to someone with a need for it. It’s as easy as that. Identifying a need in a market requires fine observational skills and the ability to keep your ear to the ground.
The core purpose of any business is to generate a profit − the effort of starting or investing in the enterprise must be worthwhile for the owners.
Businesses aren’t started to employ people or pay taxes; these are consequences of running an enterprise. People start a business for different reasons, according to Lelani Maree, a lecturer in entrepreneurship and innovation management at Stellenbosch University. They take the leap to doing their own thing depending on their situation.
“In South Africa, you get people who must make a living,” she says. “We call this survival entrepreneurship and these entrepreneurs usually start out very small by identifying a need for a product or service in the market.”
André Fourie, founding executive chairman of Poynting Antennas, a company that identified the gap for wireless antennas in the early 2000s, agrees that most entrepreneurs in SA start up due to financial need.
Another type of entrepreneurship is corporate sector workers who start up a business using the skills they have garnered. Their experience in a certain field of products or services often affords these potential entrepreneurs the chance to supply a more advanced product or service to the market than those already available, says Maree.
When someone has found their passion, it is possible that they could become an entrepreneur, according to Maree.
“It is very important to be happy in what you’re doing,” she says. Whether or not people are born entrepreneurs is too difficult to answer; too many factors play a role in setting up the entrepreneur, she says. These include a person’s life experience, resilience and interests.
Starting up a new business venture, whether you’re a corporate worker or a survivalist, isn’t easy. Maree says it takes a lot of research to determine whether there is a need for a product or service in the market. In essence, the potential entrepreneur needs to identify whether there are a lot of people already supplying the market with the product or service and whether they could offer something different for which customers or clients are willing to pay.
Fourie’s Poynting Antennas, which was formally started in 2000 after nearly five years of research and development, identified a new so-called disruptive entrant to the information technology environment – namely wireless internet.
Today, it’s hard to imagine that as recently as 15 years ago this technology was in its infancy.
“It was a niche market,” Fourie says of the radio technology market on which wireless internet is based. “We realised that wireless internet would enter the consumer market. And it happened.
As the cost of the radio technology equipment fell, the cost of antennas became a larger portion.”
The company listed on the JSE in 2008 and Fourie is in the process of buying out his original antenna business in which he still sees growth potential.
Fourie says that someone who becomes an entrepreneur to get rich quickly is doing it for the wrong reason. “You need to decide what you would like to achieve, above making money. Do you want to revolutionise an industry?”
This is an excerpt of an article that originally appeared in the 11 September 2015 edition of Finweek. Buy and download the magazine here.
