I received an email from a reader yesterday asking for some advice. I thought the answer may be applicable to some of you and so got her permission to post it here:
“I was doing some research about starting my own business (however this may not happen for a few years as I lack capital and confidence) and I was wondering if there were any other sites that would provide for similar reading. (I have an idea for a business) and wish I could afford to do so now. Your article on Books Actually helped me alot and I think I might contact them to see how they developed their concept and took the step to do so. I know as any entreprenneur you must not be afraid of failure, but being a fresh (graduate) I fear that I lack the experience or technical know-how to operate my own shop. Do you suggest that I work etc for awhile so as to get a better taste?”
There’s really 2 parts to your question, which I am going to break down into:
1. Do I need financial resources to start a business?
2. Do I need working experience and relevant skills before starting my own business?
The answer to the first, unfortunately, is yes. Working capital is always needed for any business, even a startup. My opinion is that there’s really little chance you can bootstrap a business too much (especially in Singapore), even by having extremely low or no overheads. You’ll always need capital to start your business, and more importantly, grow it. This requires money.
The more relevant question is where can you seek the money you need to start your business – my friend and venture capitalist guy Jeffrey Paine has some advice on this. Some work first to save up for their idea, but this will take a very long time and you may get jaded along the way. Or doubt could creep in, like it did to me.
If your idea has lower startup costs (applicable for certain fields and industries), then you could just do it – if it fails you can always close up shop and work for someone instead. The good news is that many companies – at least the forward-looking ones – appreciate the experience of those who have launched their own startups or worked in a startup environment.
For the second question, working experience is not really critical for business success. If you lack technical know-how or business skills, there are ways to mitigate risk. One way is to read up on those areas you feel you lack knowledge in – go read some great books from the library (for example, Guy Kawasaki’s The Art of the Start). Another method – which I highly recommend – is to find yourself a mentor who has been through a similar path and can share their experience with you as you go along.
But if you feel that you’re more comfortable with some experience under your belt before venturing out, then my advice is to really find a job most closely related to what you plan to do in the future – even if it means working for lower pay. For example, if you plan to start a bookshop, consider working for Borders so you understand about inventory management, logistics and payment systems. On the other hand if you want to start a cafe, try your hand as a barista in Starbucks – you’ll not only learn how to make great coffee but also understand how to deliver great customer service.
There really is no right or wrong answer, but I hope this advice helps.