This is what you need to start a business
Anyone can start a business, but that does not mean that just anyone will make a success of it. The sad truth is that many new businesses fail. An often-quoted statistic says that 20% of new businesses fail within their first year, while 50% fail to make it to their fifth year, and only 30% can survive for a full 10 years. Unfortunately, that failure rate is even higher here in South Africa. About 70% to 80% of new South African businesses fail within five years.
While the statistics are a little frightening, new businesses that start up successfully all the time. Often what sets these businesses apart from the failures is that the person starting it has a better understanding of business.
But you may ask yourself just how do you get those skills, what is the best degree for starting a business or what should you major in to start your own business. We’ll answer those questions further down as well as giving some brief advice on how to start a business with or without a degree.
Businesses that succeed are planned out carefully from the start, by people with the correct skills and knowledge of what it entails to run a business. Whether you are dreaming of one day starting your own business or perhaps already have your own business that you would like to grow, there are several things you could study.
The University of the Witwatersrand (Wits) online Postgraduate Diploma in Business Administration is one course that will give you the skills and knowledge for a far greater chance of achieving business success.
What degree do you need to be a business owner?
As mentioned, there is no specific qualification that you need to start a business. Anyone with a little bit of money and the time to fill in the paperwork can register a business with the Companies and Intellectual Property Commission (CIPC).
The barrier to entry is very low and starting a company can cost as little as R125. But, that’s just a piece of paper, or rather a certified PDF, that now says that you own a company. It also comes with the responsibility to continue filling in much more paperwork and paying in more money in the form of tax, assuming that your business ever makes any money that the government can tax you on.
What you need is a solid business plan as well as the skills to carry out that business plan. This can all be obtained through studying a quality business programme.
There are two ways of looking at the qualifications you need. For many people starting a business venture, the obvious place to start is with what you already know. If you’re a qualified dentist, it’s natural that you’d consider a dentistry practice. People with marketing skills might start an advertising agency, while chefs tend towards restaurants and catering companies. For many, they risk merely becoming self-employed.
The true entrepreneurial dream is to create something that can eventually stand up and operate with a minimum of your effort – allowing you to pursue other ventures or realistically seek a buyer or investors to sell some or all of your stake in the company.
The other route you can take is to learn about business itself. Warren Buffet, who has been a regular feature of the world’s richest lists for decades, studied business administration and economics.
The best degree to study for starting your own business would be something focused on business management. A Bachelor of Commerce degree would be a good starting point, but even if you studied something else at a bachelor’s level, you can still apply to study a Postgraduate Diploma in Business Administration to cover all the subjects that are best for starting your own business.
What should I major in if I want to start my own business?
If you’re thinking seriously about one day starting your own business, then you have no doubt asked yourself a couple of questions. Which subject is best for business, what degree do you need to be a business owner or what should you major in if you want to start your own business?
You can study several subjects to learn how to run a business and specialise in a certain aspect of this by selecting a relevant major. Here are some of the recommended majors that would put you in good stead for starting your own business:
- Project management
- Business Law
Starting a business without a degree
As we mentioned, there are no educational requirements or qualifications needed to start a business and anyone can do it. Some of the world’s largest companies were famously started by people who dropped out of college – Bill Gates and Mark Zuckerberg are two prominent examples. They are, however, more the exception than the rule.
Outside of a degree, it is also possible to gain valuable work experience and see up close how a company runs. This will give you a greater understanding of how a company works and might offer you training in some of the subjects that are best to study for starting a business.
For example, Jeff Bezos studied computer science but then worked his way up to be the vice-president of an investment firm. Over that time he gained valuable experience in fields like management and company finances before he started Amazon and became the world’s richest person.
Even without a degree, you can still approach the formation of your business as if you did have a degree.
How to start a business
As Michael E Gerber wrote in The e-Myth Revisited: Why most small businesses fail and what to do about it, for many people starting up their own business, they don’t create a new business so much as create a job for themselves. Think of freelancers and the like, people who hire out their own time. While they may still be successful, they tend to not build up businesses that can later be sold for a profit. For those people, they are the core of the business and without them, there is no business.
So, how do you start a business? More importantly, how do you start a business that will succeed? Put together a carefully constructed business plan. Look at the market and try to be as realistic as possible when forecasting your potential earnings and costs to ensure you can be profitable.
Many new business owners get caught up in chasing the next big sale, getting so caught up in the business’s day-to-day operations that they don’t take the time to step back and look at the longer-term picture. Think carefully about how you can grow and what skills the people will need that you employ.
With careful planning, perseverance, and a bit of luck, you could find yourself in a position to hire people with the skills you lack.
Which subject is best for business?
People who are experts in their field often feel that their company should be run by someone who is an expert in the product or service that the company offers. For all the variety of the thousands of different businesses providing different services and products, the truth is that most of them have surprisingly similar structures and operate in similar ways. This is where business subjects come in. To put it very simply: the business of doing business.
The subjects that are best for business are those that focus on the important parts of running a business – accounting and finances, managing and administration of the business. A good business qualification will cover all these aspects.
Whether selling doohickeys, yacht cruises or professional services, you will find these subjects useful for successfully starting a business:
- Introduction to Finance
- Management and financial accounting
- Essential business skills
- Project management
- Business law
- People management
- International business
All of these subjects are covered extensively in Wits’ online Postgraduate Diploma in Business Administration. If you’re serious about becoming an entrepreneurial success then have a look at the programme fees and admission requirements to see if you meet the criteria to apply now.