Introduction: Starting a S$1,000,000 business
Everybody thinks about starting their own business at some point in their life. Being an entrepreneur continues to be the ultimate dream of many. However, for most of us, this will likely be a dream that we carry from cradle to grave without fulfilling.
As a frequent user of ride-hailing applications, I often strike up conversations with the drivers. Ride hailing drivers in Singapore are considered self-employed individuals. One of my favorite questions to ask them is: “Why do you choose to drive instead of starting your own business?”
More often than not, the drivers will answer with: “I want to, but I have no money”, “I want to, but I have no idea what to do” or “I want to, but I do not have the skills”.
These answers represent the majority of us. We fantasize about starting a business, but create many reasons and roadblocks for ourselves to justify why we are unable to do so. In our mind’s eye, we believe that we will be a good business owner if only we are given the opportunity.
Despite all this, there are still many entrepreneurs in the world. What sets an entrepreneur apart from others such that they are able to start a business while others remain forever inactive?
Is it really the money, ideas or skills that we lack?
The simple answer: no. Everyone can be an entrepreneur if you learn to adopt the entrepreneur spirit.
The Entrepreneur Spirit
What is the entrepreneur spirit? The entrepreneur spirit is simple and straightforward. In fact, most of us are probably already aware of these theories but we choose not to use it.
Let’s go back to the basics and understand the core of the entrepreneur spirit again and you will realize that perhaps starting a S$1,000,000 business is really not as difficult as you think.
1. Do from what you have
The first basic of the entrepreneur spirit is to: Do from what you have.
Like the ride-hailing drivers earlier, we often think that we lack the money, the ideas or the skills required to start a business.
Let me share with you: Successful entrepreneurs do not wait for opportunities to approach them. They create opportunities.
Opportunity is not waiting for funds to reach you before you can start. Opportunity is not suddenly learning a skill for your business. We spend so much of our lives waiting for opportunities to reach us and that is precisely why we continue to dream instead of living the dream.
In fact, opportunity is starting your business based on what you have on hand.
Think back to your grandparents’ time. Back in the 1950s, most people were uneducated and poor. Yet today, we see many businesses which have been passed down since the 1950s or even earlier. How did our grandparents, many illiterate or from poor backgrounds, manage to start their businesses? Without a big sum of money or any complicated skill, they started their businesses. They opened fruit stores, hawker stores and provision shops. They became entrepreneurs based on what they could do. Instead of wishing for more, they started doing from what they had.
Our grandparents’ generation could become entrepreneurs so easily and yet, as more educated and resourceful people today, we create many reasons to say that we cannot.
When I conduct interviews with young people, they also mention their wish to become entrepreneurs. But when I ask: What kind of business do you want to run? The most common answer is: a Cafe.
Without any experience running a food and beverage business, young people dream of opening a cafe. They dream of becoming a successful coffee chain in Singapore, much like household brand Yakun Coffee & Toast. However, these young people did not realize that even the founder of Yakun started as an assistant in another coffee shop before he started the brand.
Instead of starting a business from the basics, we want to be successful straight away.
The investment costs of running a cafe is very high, which is why we believe that we have insufficient funds to start. The skills required in running a cafe are also very complicated. Cafe owners are required to handle their staff, handle their customers, handle their accounting, payroll and many other ad-hoc duties. It is not just simply about making coffee. That’s why we believe that we do not have sufficient skills to start a business.
This is why we end up believing that we cannot start a business, because instead of remembering to do and start from what we have, we want to jump the guns and skip ahead.
It is important to remember: Do from what you have. If you want to open a Cafe, start from opening a coffee stall, start from learning how to make the basic coffee, start from making your coffee famous.
Only by going back to the basics and starting your business from what you have, then you will be able to one day become the next Yakun toast.
Stop dreaming, start doing from what you have.
2. Do what your customer wants, don’t be afraid of losing face
Do from what you have sounds easy. But ask yourself: Are you willing to learn how to make coffee at a coffee shop? Are you willing to become a hawker?
Everybody knows how to do from what they have. But are you sure that you are really willing to?
One of the reasons why young people choose to think about opening a cafe instead of opening a coffee stall is because they are unwilling to become a hawker. To them, running a cafe holds a prestige that running a coffee stall does not have. It sounds glamorous to be the boss of a cafe. Even though we know that starting from a coffee stall can also eventually bring us to becoming a cafe owner, the thought of losing face and the thought of being looked down upon for being a coffee stall owner instead of a posh cafe deters us from starting small.
In our grandparents’ time, they do business because they need to feed their family. They do business because they need to earn money. They do business because they need to survive.
But, fast forward to the present, what about us? For many, we grew up in relative comfort and luxury. Instead of earning money for basic survival, we now focus more on fulfilling dreams and goals. We want to do business because of our dreams, We want to do business because we want to show the world our passion. However, we have forgotten that the main point of doing business is to earn money.
This is why we dream about opening the cafe but not the coffee stall. We focus on achieving our dream shop instead of focusing on earning our living.
However, in business, it is important to remember: It is all about the money and the profit. Doing business because of your passion or your dream is just waiting for failure. Without money or profit, there is no business to speak of.
Doing from what you have sounds simple, starting small sounds simple, but are you really willing to start your business by being a hawker?
Most people will still say no. They know the theory to succeed, but they still say no. Why?
The simple reason is: Lose face.
Becoming a coffee stall owner sounds low-class compared to a cafe owner. We care about our face so much that we know all these theories – we know we must do from what we have, we know we must go back to the basics, we know we must start a business that customers want, but we do not want to start.
That is the simple reason why we dream so big but our business never starts. We will never become an entrepreneur simply because at the end of the day we are unable to put down our pride and start small.
In order to become a successful entrepreneur, you need to first be able to put down your pride and stop caring about your face. Remember, when you succeed and grow your business, your face can be earned back.
3. Have your consumer at heart
When starting a business, another common concern is profit. At this point, many entrepreneurs will start calculating their costs and product prices.
While money is just a numerical figure, one more important thing to take note of is your consumer.
Have your consumer at heart. Understand their spending power and understand that all consumers would love to have cheaper options. Price your products lower to benefit them instead of focusing on the profit figure.
Perhaps the biggest, most glaring question would then be: How is my business expected to earn money if I am selling at such a low profit margin?
Do not underestimate the price difference. Perhaps you are now $1 cheaper than most other stalls and now instead of a profit of $2, your profit is only $1. This $1 difference is going to be the key to the success of your stall.
The $1 difference will help you to differentiate your business. It will help your customers to save money. It will also help your customers to remember you. And with this $1 difference, they will thank you and will return to your shop.
The price difference helps your consumers to save money and benefit from it. You help them to save costs and they will in turn help you to spread word about your business. This will be mutually beneficial for you and your consumers. The number of recommendations and return customers will help you to recover the $1. This helps your business in terms of marketing as well, something which we will cover in the next chapter.
Have your consumer at heart, build relationships with them. Believe me: When you have your consumer at heart, it will help your business to go a long way.
So what kind of business should I do?
Think back to the entrepreneur spirit. Do from what you have, be willing to put down your pride and start small, have your consumer at heart.
It does not matter what simple business you wish to do. You can open a coffee stall, a curry chicken stall or even a provision stall.
If you want to become a restaurant owner, start from becoming a hawker.
Do you believe that a hawker stall can also become a multi-million business?
First, find a shop space based on your budget. If you have $50, find a $50 shop space. If you have $10,000, find a $10,000 shop space. Any empty space can always become a shop space. In Singapore, many aunties sell curry puffs outside saloons or at the counters of our neighborhood provision shops. They pay a small amount of rental and they start their small food stall. It is not a must to start from a luxurious shop space. Do from what you have and based on what you have, open a stall. Eventually with the profit you earn, you will be able to slowly build your way up to creating your own proper business empire.
Second, start to create the product for your shop. Do not say that you don’t know how to make your product or you don’t know what product to make. If you are opening a coffee stall, learn how to make coffee. If you are opening a curry chicken stall, learn how to make curry chicken. In fact, many food recipes are available online now. If you put your heart to it, you can definitely make the most delicious food recipes. It does not have to be complicated or sophisticated. Do from what you have and sell simple, straightforward products that your consumers want.
Thirdly, remember to have your consumer at heart. When you have your consumer at heart, you can start to build good relationships with your customers. Do not underestimate your consumers. They will not only remember your business but they have the potential to help your business to grow. Better still, it is possible to turn your customers into your friends and even your staff. This is especially important in Singapore, where we often face manpower crunches. Building relationships with your consumers means that there is a potential to convert them into manpower for your shop. More manpower means you can expand your business. Even if you are opening a coffee stall, do not underestimate the elders who visit. They can also become potential staff for your outlets. Don’t be stingy because your customers will help you to succeed.
Lastly, expand your stall. Use the profit from your 1st branch to open a 2nd branch. Use the profit from the 2nd branch to open the 3rd branch. Convert your loyal consumers into your staff. With this plan, very soon, you will become a successful entrepreneur earning millions and can finally achieve your dream of opening a classy shop.
In this chapter, we realize that becoming a successful entrepreneur is not difficult. However, as individuals, we limit ourselves due to ambition and pride. Few become successful entrepreneurs because we are unwilling to work towards success.
If you are willing to put down your face and do business proper, like the other entrepreneurs, you will succeed too.