Can you imagine working for an entire year and not receiving a single salary?
Well, this is the reality that most entrepreneurs face, along with other challenges in their quest to build a successful business.
Nontokozo Madonsela was the owner of Spa88, an internationally-themed spa which unfortunately closed down its operations.
According to Madonsela, she has learned valuable entrepreneurial lessons from her experience of starting a business.
She said that she opened a business in an industry that she had no experience in and, looking back, she feels like she should have contracted a specialist or consultant to run the business.
“Understanding the risks that come with running a business is also important and a financial adviser can go a long way in helping an entrepreneur understand what is best to protect yourself and their business,” Madonsela said.
Reflecting on her own experience in entrepreneurship: a failure that, while haunting, Madonsela shares lessons for entrepreneurs or those who want to start their own business.
Liberation vs liability
Madonsela said that she bought an existing business and created Spa88 – and entered the market armed with a solid strategy and a love for customer service.
She would cash her pension fund and shares to pursue her dreams of starting her own business.
“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,” Madonsela said.
According to Madonsela, this experience taught her that financial backing is a huge source of frustration for many entrepreneurs and her advice to entrepreneurs 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 are an entrepreneur, you need to learn how to balance your passion with business objectives.
Madonsela said that the same effort you put into making sure your clients have an amazing experience is the same effort required to sustain your business.
Despite having a great strategy and a sound business plan, there were some things that she 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,” Madonsela said.
As an entrepreneur, Madonsela did not have any conversations about risk. In the spa business you need to protect yourself against the possibility of serious repercussions from clients who have adverse reactions to treatments or the theft of stock.
You should also take the time to build new relationships in the neighbourhood you are working in, so other businesses and potential clients in the area know you and know where you are based.
Madonsela said: “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 easy to tune out any warnings or those with a different view.
According to Madonsela, there are very few people who can tell you the truth and you take it in objectively, and the people who are close to you are not the best devil’s advocate, because you expect them to be your cheerleaders.
Madonsela said that entrepreneurs should speak to independent experts for 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,” Madonsela said.
“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.”
Another important lesson that Madonsela dealt with is related to money. At times, Madonsela found it difficult to separate her 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,” Madonsela said.
The struggles that she was facing were made even more challenging by her divorce, which increased the pressure to take care of her children.
Madonsela said: “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.”
IOL Business