Do you want to start your own IT business in a small South-African town?
Before I carry on – this article is written without any filter, so expect some foul words here and there.
Let me put it to you straight – Don’t do it! If you currently have a secure job, keep it and forget about starting your own IT business (or any other business in a saturated market). You can have a plan worked out up to the finest of details, but macro factors will show you that your plan are worth nothing more than the paper (or PDF file) it is written on. BUT maybe you are one of the lucky few who can strive in a VERY saturated market and can make a great living out of your business – fuck knows.
Here are some points which I want to list which showed me through the years why an IT business in a small town will not thrive as you would have hoped it should, and why you will not get rich from running a small business in a small town:
I was told to “keep my eye on the ball” and focus on my own business and “forget what the competition is doing”. Let’s cut to the chase – you NEED to know what your competition is up to. How else would you know what customers want and need in your small town? And your competition will also check out what you are up to, as you will be a threat to them. Competitors who are established in your town, will in most cases get the preference from their existing clients, because they are well known and have already established a loyal customer base. But check out below about loyalty.
Want loyalty? Get a dog. People will “always” say that they will support you and your business, but at the end of the day, they will try and save a couple of bucks to get it cheaper somewhere else. They don’t care about your business – even if they tell you that they will be “loyal”. Yes. One or two businesses, friends and family will be loyal to you, but what about the other 90%? Don’t think for one second that a small IT business will thrive if you expect loyalty from your friends and/or some family members. They really don’t give a shit about your business. Why? Because it won’t affect them at all what happens to you or your business.
Stock on hand
If you have a ton of money to keep expensive stock and products which might become redundant within a year, then you are stuck with it. If you have a retail store in the centre of a mall or so, then you might get away with selling your stock on hand. But then again. You are a start-up, and without proper investment, you won’t be able to afford a retail store and high stock levels (which is a gamble because who knows what will sell and what not). So that leaves you with the only other option: a customer place an order, you fulfil it at the supplier, and most likely the next day, you will have your stock which you can then deliver to your customer(s). BUT also keep in mind the loyalty thing. If people want something you don’t have, but another does, then sorry – you have lost the deal. That is how people work. I have experienced this A LOT, and when you have stock on hand, people (especially your friends) will go and buy it somewhere else. So, most of your stock will sit on hand for quite a long time (if it will even sell though).
Man, oh man. The IT sector is such a saturated market, and IT companies undercut and fuck each other over like there’s no tomorrow. It is the same with photography businesses lately (everyone is a “pro”). If you can install Windows, then hey, suddenly you are an “ICT Network Infrastructure Technical Engineering System Specialist” (if that is actually something). Go and read up on the Dunning-Kruger effect. Trust me. Do it. There’s a shitload of individuals who are vain as fuck and believe they are the best in what they “can” to do. They end up costing your business. But what I have noticed, is that the other start-ups (IT) will charge such a low rate for services and extremely low mark-ups, which (if you know how a business works) will affect your business. Straight up, I call them more words than just fucking assholes! You will also find that the fly-by-night IT guy mostly doesn’t even have the needed skill, qualifications or entrepreneurial capacity to provide exceptional, professional service and something unique. And also, how can you compete with the larger enterprises who buy in bulk from the wholesalers (or even import directly)? They have stock on hand. They have the walk-in stores at hot spots. You see. That is just something you also need to take into consideration.
Do you have enough manpower to run your business? Someone in admin & finance? On-site technicians? In-house technical staff? Sales reps? I think as a start-up, most people will answer NO. Again, if you have one helluva capital injection, you might be able to afford that, and hopefully, it will pay off and you will have a successful enterprise – who knows?
Capital Expenditure. For an IT start-up, your overheads need to be as low as possible. Yes. You need to purchase some IT equipment, software licenses (unless you are cheapskate and run the risk of using unlicensed software), some office equipment, etc. You need to take this into consideration. And it is not cheap.
Taxes. Cipro. Etc.
This is self-explanatory. You need to have a registered business. You need to have some accounting skill when it comes to taxes (if you don’t have a dedicated accountant). You need to do your yearly CIPRO / CIPC renewals, etc. Just read up about this stuff. Do your research and see the risks involved when you start your own company and don’t have these stuff in place. Anyone can start a business, but anyone can get themselves in so much shit if you don’t keep this stuff in mind. And I personally know people like that.
Friends & Family + Business = Disaster
Let me tell you something out of experience. NEVER the hell ever go that route. NEVER EVER! You will lose more than money at the end of the day and you will sit with more headaches and frustration than you can ever imagine. Sure, you can supply your friends and family with your products and services (and don’t shoot yourself in the foot – charge them normal rates). But never include them or make them part of your business. After a while, they will tell you how to run your business, what you should and should not be doing, etc. And worse, they might even make you feel that you owe them your everything. Just don’t go there. It is really not worth it. One simple argument or clash of interest will make people lose there shit big time. You might even be the one losing your shit. And guess what, you are always the one who were “wrong” (unless you really were the one). And is it worth losing family ties or friendships over business? No. Just do your thing on your own and what YOU think is the best for YOU. Remember – money can’t buy family (friends perhaps, but then they aren’t really your friends. Just a bunch of opportunists).
There is so much more stuff which I can tell you, but for now, this is the majority of stuff which I have experienced. This article is all about my experience since I have left a well-paid, loads of benefits and secure job about three and a half years ago. It is not easy. You will either survive, or you won’t make it and lose more than what you could ever imagine. If you want to start your own IT business, I wish you all the best, but please take this article to heart, as this is an honest representation (in short) of what you can expect. Entrepreneurship aren’t for anyone. You can be a good leader, but a shitty worker. Or you can be a shitty leader but a great worker. Find that balance. AND BE HONEST AND REALISTIC WITH YOURSELF! People tend to think their ideas and schemes WILL work. My friends. It is a wild out there. Your IT business, or fish and chips shop or whatever you want to do – BE REALISTIC and take objective opinions to heart – especially from successful businessmen, as well as people who have tried it all. Don’t be a Dunning-Kruger effect type of person. Be realistic. Remember – if you don’t have something to fall back should your venture doesn’t work out, then you can consider yourself sort of fucked. There’s no other way to put it.
Remember. There is REALLY no thing such as a “get rich quick” scheme. Forget it. To get rich quick, you either inherit rich, or you steal yourself rich. OR if you have something going for you, it will take you years to have a balanced, steady inclining income which have the potential to make you a lot of money. Again – if you have a secured job which doesn’t drain your soul and destroy your mental wellbeing, the just keep doing what you are doing. There are so much stuff working against you when you have a small business. It takes balls. It takes a shitload of sacrifices. You shouldn’t have any debt (you can imagine not making money, and all of a sudden, the bank shows up and start to repossess your assets).
To run a small business, you need to have balls to take on the challenges involved. To make an honest living and conduct honest business, you will have to bring something out of this world to the table to blow your competition away. And again. If anyone tells you to NEVER worry about your competition, well, tell them to f-off. You NEED to stand out above them and therefore you need to know what they do. But don’t just sit on it – put your arse into gear and do what you must do. It’s a crazy world out there for small businesses (especially in South Africa), so make it count. Do not waste your time, and do not make decisions you might regret.
Think REALISTICALLY about the positives and negatives about starting your own business. Do not make a decision overnight. Take a year. Maybe two years and work out your plans if you want to have your own business. Look at something which can provide you with a passive income to take care of the other expenses you might have whilst building your business. Impulse decisions do not always work.
Keep in mind. You have to look after your family (if you are not married with children). You have to look after yourself. You need to look after your own future when you want to retire. If you have nothing to provide, then you can foresee the obvious implications. And if you succeed, I really look up to you as you have taken a leap of faith and made it work.
Update: Since the beginning of December 2019, TechStudio had to shut its doors to the majority of services it had to offer. TechStudio was my pride and joy for such a long time. Due to the points mentioned in this blog, it all came together and marked an “end” for TechStudio. I had some tough decisions to make, and fortunately was able to get employed again at my previous employer. It came as a blessing altogether with an offer which I couldn’t have refused,a as I started to worry where and when the business will pick up (if ever) for TechStudio. Sometimes you just need to cut your losses, put pride aside and do what is best for you and your family. Remember (and I must keep telling myself this as well from time to time). It is not failing. It just didn’t work out as planned. Pride will not provide. Rather make the call early enough before it is too late.
For each and everyone who made this three-and-a-half-year journey possible for me – you guys rock and without you, I wouldn’t have had the best time of my life with TechStudio. THANK YOU FROM THE BOTTOM OF MY HEART!