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 – particularly in markets where secure jobs are getting scarcer, and the idea of working your fingers to the bone just to make your boss’s beach house more lavish isn’t very appealing – 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”.
The grubby reality of entrepreneurship is that there is no magic formula. What follows are some useful considerations and inspirations for anyone seeking to make the leap:
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.
The value you sell is in the solution you are offering. 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?
Answering these questions is part of the preliminary steps for starting and operating a sustainable business model in Ghana.
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. Remember, this is just an inspiration and one of many options. It’s important that ‘you do you’ and work with the resources and opportunities that are available around you.
As Felix Darko, one of the leading Program Managers of the African success story, MEST stated, “You need to find that place within yourself to focus and dedicate your full energies to both your side hustle and your startup. This is where time management becomes critical.”
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.
Another argument in favour of such a strategy is the ability to make sound and good business decisions for your early-stage venture, since the urgency to make money and keep a roof over your head is significantly reduced.
“Have a stream of income that keeps you afloat to survive when starting your business because being in survival mode makes you desperate and you’re likely to make bad decisions.” – Foster Awintiti- Akugri | Founder, Hacklab Foundation.
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.
Founder Institute Ghana is made up of amazingly successful Founders and leaders, and some of our mentors who ‘did it’ by deciding to switch from full-time employees to sole traders in order to maintain an income stream from a job they can do for others while opening up more time for the business. Basically, switching their 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.
Cecil Nutakor, CEO & Founder of eCampus, mentioned during the panel discussion that he considers offering public speaking services in the education and e-learning sector as a side hustle. This is something he can pull off with ease because it’s in his area of expertise and has an intrinsic alignment with his edu-tech business, potentially acting as a marketing tool for his startup as well. Two birds with one stone, essentially.
Stage 3: Full-time salary from your start-up
You hustled hard. Worked double jobs but it was worth it. 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. You made the leap, congratulations! 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.
“It’s the support you get before you make it as an entrepreneur that’s more important.” – Nana Osei Founder, Co- founder, Bluhue & Bôhten Eyewear.
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.”
As the saying goes, “No man is an island” and 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. You basically have more than one brain to develop strong and innovative solutions to address the challenge identified for your startup venture.
Mahi also added that, “You need a sparring partner or someone to support you when your capabilities alone can’t achieve results.” And of course, those great co-founders, who complemented one another’s ideocracies, talents and skills, have built great teams around them.
Cecil Nutakor, who is no stranger to building teams, commented, “If you build the right team, you will do less and you will have the time to be more visionary, innovative, and try new things.”
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.
You need cheerleaders (outside of friends and family!). If your idea is that great, and you are the right person to move that idea forward, you’ll quickly get buy-in from others, in various forms of support, whether it be mentorship, connections or financial.
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.