Entrepreneurs are a rare breed of visionaries, creators and innovators who have the courage and ingenuity to take risks, break away from the herd and cast a path for themselves.
Starting a business is an increasingly appealing and aspirational career choice – yet it’s tainted with a veil of uncertainty, especially in the early days. So, how do you become an entrepreneur?
Whether you are in the game of amassing wealth, changing the world or building a legacy that will outlive you, there will come a time where you will need to set aside your job and outsiders’ expectations and just ‘make the leap’.
Making the leap from employee to entrepreneur (successfully) is arguably one of the key obstacles and moments of truth in the life of a start-up founder.
To find out more about this ‘moment of truth’ we gathered some of the best entrepreneurs in Ghana and Founders Institute Mentors to discuss the topic in an interactive online webinar. What follows are the key learnings from “The Leap: Making the Leap from Employee to Entrepreneur in Ghana”.
Serve your customer, not your ego.
Be led by the conviction that you’re there to solve a problem, not by confidence in your billion-dollar idea and the need to be seen as a white-collar entrepreneur. Kafui Yevu (Founder of Kraado) rightly said that, “Entrepreneurship is not meant for you to show off as your own boss. You are there to solve a problem.” Many aspiring entrepreneurs fancy the idea of being labelled as entrepreneurs, but they have no clue whose problem or pain they are solving with their business solution.
Before making the leap, ask yourself these reflective questions;
- Is your business model making someone’s life more convenient?
- Is your potential customer willing to pay you to make their life easier with your solution?
- And after you have served them, do you see them recommending you to their family, friends and other potential customers?
Keeping the Lights On.
How do you pay your bills, especially during the first two years of your start-up venture during which you are either making a loss or barely breaking even? We unpacked what it means to make the leap in three steps and put together some tactics that will help you keep the lights on, building on the experience of some of our FI mentors and entrepreneurs.
Stage 1: Keep your job and start a side hustle (your start-up).
Keep your job. Once you have identified a problem worth solving, your goal is to develop a solution (or many iterations of it) and find a market (or many ways of bringing the product to market). If you keep an exploratory and testing mindset, then you’re on track.
Keep in mind, at this point, you are not running a business full time yet. Making it your side hustle means you are able to nurture and grow your idea or solution and test it within your network. You are also able to fall on your current employment income to fund aspects of your entirely new venture and also provide for yourself and your family.
Stage 2: Quit your job and double the hustle.
At some point, after you have identified your product-market fit, you have revenue coming in, and your business is requiring more of your time and dedication. This is when your start-up (which started as your side hustle) needs full-time attention, but it can’t yet pay a full time salary .
Basically, switch your full-time role for a side hustle. Your options may include offering services like freelance consulting, blogging, public speaking and tutoring which is advised to be within your area of expertise.
Stage 3: Full-time salary from your start-up
You hustled hard. You have found product-market fit and you have got money in the bank to pay yourself a salary and focus 100% on your company. But this is only the beginning… if your money in the bank is coming from healthy revenue (selling your product) it’s a positive sign of financial sustainability, if your salary is paid with investors’ money, congrats for raising funding but remember, your goal is to make revenue, not raise capital.
The Support before The Success
Surveying the experts very quickly revealed that a well-balanced support system should focus on these 3 key areas;
- Emotional Support: when you have family, friends, and a great network who believe in you and are there to help keep your head straight when the going gets tough, it makes your transition a lot smoother.
- Mentorship: having mentors who are experts in their respective fields to turn to when you need advice is also good to keep you on track as you make the leap. This is a great opportunity to learn from mistakes they may have made or learn from how they approached a particular problem that you are currently facing.
- Financial Support: We are not talking about Venture Capital (VC) money or huge grants from some top-notch organizations which come with tedious procedures. Typically, it’s hard to raise those types of funds in the first 2 years of your start-up’s operation. That is why it’s important to focus on the less expensive forms of funding – i.e. raising funds from family and friends. Start-up capital is always a headache for many start-ups and so being able to fall on family and friends reduces the financial burden. In Ghana, the cost of borrowing from any bank is anywhere from 15% to 30%+ per annum, and it is higher especially for a start-up, which may be considered as high risk. This is why it’s good to start with family and friends.
Sparring Partner and Teams
Another of our expert, Mahi Sall, a Global Startup Mentor, commented: “It is best to have a partner or co-founder when starting a business because they usually come with new skills sets and experiences.”
It is important to learn how to collaborate with others to achieve exponential growth. Why own 100% of a venture worth USD $0.00, when you can own 50% of a venture worth millions of dollars?
Between 2004 and 2014, 43 unicorns were built globally, and 35 of these had co-founders, with an average of three co-founders. This emphasizes the importance of collaborating and sharing the responsibility of building a sustainable business. A co-founder brings to the table skills, experiences, and a network that complement yours.
To conclude, it is clear that there is no one-size-fits-all solution for making the leap from employee to an entrepreneur. However, it is our hope that the considerations above will set you on the right path to making informed decisions as to when and how to make such a leap in your current situation.
Managing Director of Founder Institute Ghana, Simon R Turner, perhaps pulls everything together most succinctly by saying: “Once you find that your side hustle is taking priority, more enjoyable, and more rewarding than your day job, that’s when you know it’s time to make the leap.”
This article was written by Groundbreaking Africa and Maxwell Investments Group, in partnership with Founder Institute Ghana.
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