Tips on how to start a small business

The informal sector is an important segment of any economy, contributing a considerable share to the national revenue through taxes. But more importantly, it helps many people earn a decent livelihood, making it worth venturing into.However, in Rwanda the sector is largely unexplored since many people prefer jobs where they are underpaid or even mistreated by their employers than quit and face the risks involved with starting their own small business.“I would rather spend my savings by taking my friends out for a drink rather than waste it on starting a business that would collapse after a few months,” says Jack Kabubi, a resident of Remera in Kigali. Such is the negative attitude most Rwandans have about starting their own businesses.However, it is not too late, that kind of attitude can be transformed, especially when people get armed with the following tips on how to start and manage a business. Have an idea. This could be about a product you have always wanted to make, or a service you feel people need.Work for others first. One has to work for already established enterprises that are in line of their interest so as to get acquainted with the style of management, challenges, risks, benefits and many other similar issues therein. This is precisely part of field research and experience you need to before opening your own business. “A person interested in starting a business should look for contacts, have a network of people to partner with like suppliers, distributers and even marketers,” according to Deo Musonera of Imena Management Consultants.Seek advice. Visiting owners of successful small enterprises, professional business consultants or Internet sources to get counsel would be an ideal thing as these most times are known for being custodians of business Knowledge. Know the risks involved like competition, high rent and insurance costs, high debt, loss of clients, so as to come to up with measures early enough to counter them. “Hatching a business is also important. The reason most people get frustrated is because they just set up businesses without being certain about the reliability of the target market, appropriate labour, source of capital and other essentials,” notes Joseph Mubumbyi, a consultant at TM Consult.Have a marketing plan. One should be able to select a marketing mode that they think is most appropriate for their type of business. One could use radio to promote the enterprise as is the most affordable and convenient advertising platform for small businesses. Or if you need to advertise at all as you might not be having the requisite money. Know your target market. You should be able to know your clients very well, including their likes and dislikes and the best type of media that can be used to reach them. For example, if one’s target market is the youth, then it is wise to stock products that appeal to them. You can also decorate your store accordingly to attract their attention. Choose location. This should be strategically positioned for easy access and visibility. It should also be in an area that does not have many other similar businesses to avoid unnecessary competition as you are starting up.