Entrepreneurship requires proper planning, sacrifices
I have two friends who started businesses over the past 10 years and their gradual success has been impressive.
These friends have proven, to those of us who think success is an overnight achievement, that being an entrepreneur is not something you jump into without planning and careful consideration.
It's a skill you have to develop and harness over a period of time, especially if you're in it for the long haul.
Both friends, who have never met each other, cut their entrepreneurial teeth by buying a second house and renting out one of the properties. The sacrifice they made was impressive.
They could have easily sold their first humble abodes and channelled the resources into their second home to ensure it was bigger and safer.
I was in awe of how my friends sacrificed the short-term happiness of their families to take a risk and venture into a residential property rental business. They could have squandered the money on a fancy new car or clothes to make themselves look good in photos on social media. But that was not their concern.
Instead, they bought second houses while they were paying off their first home loans. And in doing so, they took the risk of not having enough funds if their tenants went AWOL and skipped paying the rent.
The rental market has its challenges, and tenants who fail to pay their rent on time while your bank keeps on threatening you over your failure to service your home loan can be stressful. Landlords need to take care when choosing tenants to manage this risk.
How you run and manage the finances of a property rental micro enterprise could determine whether you would have the appetite for more residential rental properties.
After buying at least five properties over a period of 10 years, my friends ditched their full-time jobs and started businesses in their areas of expertise.
What was humbling was that they operated their businesses from the homes they share with their families.
They could have easily kicked out one of their tenants and used the rental property for their businesses. Or they could have chosen to operate from some expensive-to-rent office park, bleeding their new ventures of cash.
The extremely high failure rate of small businesses shows that cash conservation is king and failing to manage your income and expenses could result in your small business empire crumbling.
Another crucial lesson they learnt was to partner with or employ workhorses. These individuals understand that a small business is not a holiday resort and are able to put in extra hours to make sure that a task is completed on time and clients are chuffed.
My friends have also sharpened their networking skills and are constantly energised to hunt down new clients while retaining the existing ones. Once they have the new clients, they do their best to keep them happy by delivering services and products that are more than value for money.
My friends' experience shows that running your own business requires sacrifices, not only financial ones, but also in working long hours and not seeing your family and friends as much as you would like to.
A real entrepreneur is willing to sacrifice their short-term goals and gratification for long-term, more meaningful benefits that change the lives of many people for decades or even centuries to come.