Before we dive into the depths of the law, I have a small request for you: Just before you decide to start a business - stop.
In the previous column, we talked about the various parameters that make up a business and the dismal situation of small and medium-sized businesses in the Haredi sector.
There are critical key points that, if you don't answer yes to, don't start a business. Even if you have lots and lots of extra money.
And let's try to formulate it in a few simple questions:
- Do you have specific experience in the field you want to start a business in?
- Are there competitors in the area where you are preparing to open your business? Surprisingly, even if there are competitors, it does not always indicate that you have no chance of success. On the other hand, even if there are no competitors at all, and you managed to identify a real unmet need, it does not mean that you will definitely succeed in your venture. And this reminds me of an excellent advertisement, aired by the orange brand, when Partner launched the brand in Israel. The video featured a young dentist, who had just received his degree, and began to vigorously search for where to open his clinic. Finally, he decided on a specific location, with the camera accompanying the renovations and preparations until the moment when, with great joy, he went outside and hung up his sign with his own hands. When it was finished, the camera moved away from the entrance to his store and the row of stores in the middle of which he opened his dental clinic was revealed. Inside the main street, which is packed with candy stores.
- Do you have the amount you need to invest in order to establish the venture? (store, home business, inventory, equipment, etc.) - what is called in professional jargon "start-up costs.".
If the answer to any of these wishes is "no," then in simple Hebrew, don't start the business.
This way you will save yourself quite a bit of heartache and heavy financial losses.
And here is an example from life:
An electronics engineer who had retired from a senior position approached me for advice after the company he had worked for many years was sold to a huge corporation abroad (Exit Belaz), which left him with a considerable sum of money. He decided to open an independent business, and just then a good friend of his suggested that he purchase a small, (very) old business in the field of advertising from him.
Apparently everything is fine.
So that's it.
My recommendation was unequivocal: do not purchase. Not because of the balance sheets, or the level of profitability. But because of the buyer's lack of experience in the field of advertising.
An electronics engineer, no matter how senior, cannot purchase an existing business, become independent, and while "moving" learn the field. Unfortunately, the consultant did not heed my advice, and today (three months later), the business is in the final stages of closing, due to failed management.
Money for investment, there was. Direct competitors - none at all. Only experience and/or familiarity in the field - was lacking.
And that's a shame.
In the next column, we will expand, with God's help, on the initial organization leading up to the consideration of whether and how to open a business, and I would be happy to receive your responses, comments, and enlightenment on the matter.
And fulfilling my promise from the previous column:
I asked you to send personal questions about your businesses. I received quite a few. Everyone who contacted me received personal (and immediate) attention and help via email and phone.
One example of a question raised: A small fashion store in a city in the center of the country. The applicant noted that they were indeed prepared in advance for the store not to recoup its investment overnight, and that the turnover is not that large, but stable. There is an expense for advertising, they have no idea whether it is an excessive expense or not.
His question was whether the store was in the right direction or not?
What do you think?
It turns out that a very significant piece of information is missing here. He has no idea how much his inventory in the store is worth. Moreover, he has no accurate estimate of how much of the merchandise has "decreased in value," and he will be forced to sell it at a loss.
Remember: It is critical to keep a constant eye on inventory, dead inventory can kill a successful store. Sometimes it is better to work with an agent or brand that allows returns than to work with an agent that does not allow returns, but whose profit is greater.
Questions, requests, clarifications and comments can be sent to email:
[email protected]I will continue to try to answer your emails as soon as possible and in a timely manner.
your,
Micha Sholem
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