By Nontokozo Madonsela
IMAGINE the stress and anxiety that comes with working for an entire year and not receiving a salary? This is the reality that confronts most entrepreneurs in their quest to build a successful business.
I was recently reflecting on my experience with entrepreneurship: a failure that, while haunting, was also pregnant with many lessons for entrepreneurs – the importance of advice chief among them.
Liberation vs Liability
I bought an existing business and created Spa88 – and entered the market armed with a solid strategy and a love for customer service. I had a successful track record of establishing and growing some of the biggest brands in the country. Fuelled by determination and faith, I cashed my pension fund and shares to pursue my dreams. I craved the creative and physical liberation from corporate. I wanted to stretch myself and see what I could do differently in the world of beauty and luxury spas.
This experience taught me that financially backing is a huge source of frustration for entrepreneurs and my advice is to always look for alternative sources of funding. I would especially take heed of this advice when you are over 30, when you are that much closer to retirement and risk falling behind in your retirement goals.
Passion vs Profit
When you’re an entrepreneur, you must balance your passion with business objectives. The same effort you put into making sure your clients have an amazing experience is the same effort required to sustain your business as a going concern.
Despite being armed with a great strategy and a sound business plan (for which readily available data and trends were hard to get by the way), there were some things I struggled to manage with from a financial perspective. For instance, the seasonality of the spa business which in hindsight, I could have planned for better.
I didn’t have any conversations about risk. To illustrate, in the spa business you need to protect yourself against the possibility of serious repercussions from clients who have adverse reactions to treatments, or perhaps stock being stolen.
You also need to make time to build new relationships in the neighbourhood you are working in so other businesses and potential clients in the area know you and potential clients in the area know who you are. Networking is a key component of any successful business and it’s important to keep putting yourself out there and to stay abreast of industry developments and trends.
Optimism vs Advice
Having faith in yourself and believing that your idea is going to work are essential. However, it can also be too easy to be tuned out to any level of caution or those with a different view. I think there are very few people who can tell you the truth and you take it in objectively. People who are close to you are not the best devil’s advocate because you expect them to cheer you on, but you should invest in independent expert advice where possible.
I opened a business in an industry I had no experience in and, looking back, I should have contracted a specialist or consultant. Understanding the risks that come with running a business is also important and a financial adviser can go a long way in helping you understand what is best to protect yourself and your business.
At times I found it difficult to separate my personal money from that of the business. Despite the revenue amount the spa earned, the operating expenses, such as rent or wages for my six employees remained unchanged. I suffered from high anxiety and stress levels, and I was juggling too many balls in the air.
This was made even more challenging by my divorce, which increased the pressure to take care of my children. I had to walk away from the business I had toiled over for three years. It was not easy, and I took that knock very hard, amid everything else I was going through.
I am an entrepreneur at heart and at some point, I may return – wiser, more knowledgeable. I may pursue a different route, but I’ve learned the importance of seeking and using solid, expert advice no matter what endeavour I choose.
Nontokozo Madonsela is the group chief marketing officer at Momentum Metropolitan.
* Momentum Metropolitan is running “Big Success for Entrepreneurs”. Go to https://momentumbigsuccess.co.za to find out more.
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