Tips for start-ups in times of crisis

Starting a new business can be a scary yet exciting prospect.

By CATHY MPUTHIA
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Summary

• During this time when Covid-19 has created an economic challenge for some due to layoffs and salary cuts, a lot of new businesses have been formed.
• Almost 400 new businesses were reportedly formed during the last six months, a deviation from the normal numbers.
• The cause for this has been attributed to Covid-19 as people seek alternative ways of making a living.

At times, circumstances may force a person to get into business to earn an income.

During this time when Covid-19 has created an economic challenge for some due to layoffs and salary cuts, a lot of new businesses have been formed. Almost 400 new businesses were reportedly formed during the last six months, a deviation from the normal numbers.

The cause for this has been attributed to Covid-19 as people seek alternative ways of making a living.

Resilient Kenyans are turning to self-employment to survive the economic turbulence caused by Covid-19.

A business starts with an idea.

Most businesses are formed as a result of hobbies or passion. It is important to start a business from what you are naturally good at or you enjoy doing.

For some people, the pandemic has created a welcome career shift and an opportunity to do what they have always wanted to do. Here are some tips to guide you.

First, consider your strengths and skillsets when getting into the business.

There is no point in starting a business that you are not qualified or called for. It may fail due to a lack of passion on your side.

There is an interesting read on business personality types that helps individuals to discover the kind of enterprise is best suited to their personalities.

Once you identify your idea, begin to build the foundation of your business.

This is an important part of your business and may take the most time, just as it is when one is building a house. This is the business planning stage where you will draw up your strategic and business plans, among others. It is worthwhile to consult an expert to advise you on how to go about this stage. Fortunately, there are very many business coaches available in the market who can walk you through the process until you have your foundation ready. This stage is necessary even for seasoned business people.

After laying the foundation, start building on it. This is the implementation stage.

At this stage, you will incorporate a vehicle that will actualise your venture.

There are several types of businesses available, for example, sole proprietorships, partnerships and companies.

I strongly recommend a company due to its unique advantages over the other forms of business. This is because a company is a separate legal entity from you.

Create an account on the e-Citizen portal and follow through the self-explanatory business registration process.

You will also need to get your compliance and regulatory approvals. Make sure you have all your licences from the relevant authorities so that you do not expose your new business to risks.

If your business operates from physical premises, then you will need to make sure you have signed a suitable tenancy agreement for the same. If your business is online, get a suitable website, which is compliant with data protection laws. You will need to have suitable contract documentation with your stakeholders. They include staff, suppliers and partners.

Funding has been a challenge for many start-ups. Innovative funding is a new type of financing that enables start-ups to get capital. They include grants, angel investment and crowdfunding, Covid-19 funds, sector-specific funds and ethical investment.

The good news is that there is a lot of mentorship support for start-ups through online platforms.