“Every entrepreneur needs some kind of sounding board to help with strategy, decisions, and concept review. It’s a lonely journey; build a network of people that you can safely run a few things by for an objective view.”
Meet Louis Barnard, otherwise known as Frugal Local (@FrugalLocal), local entrepreneur and tech guru who has made it his mission to educate entrepreneurs on how to manage and grow their money – and businesses – in the smartest, most financially-savvy way.
He’s no stranger to the fears and potential pitfalls of starting a business, having quit his job to start his business in 2020, just as the global pandemic and subsequent lockdowns hit. He runs his own software development company, helping start-ups and small businesses with mobile apps and web applications.
He’s also a content creator and speaker who talks about personal finance, small business, and property. He knows that making money isn’t easy and that it requires determination and education, which is why he writes prolifically on the subject.
“I collaborate with brands to tell a story to my followers and subscribers – one of education, growing, and becoming more than what they were yesterday,” he says. “There tends to be a lot of resources for start-ups, but few are in the idea phase. I like working in the idea phase, and how to validate it before you spend loads of money.”
Just do it, but not so fast
Being of a risk-averse disposition, Louis planned for more than a year to exit full-time employment to run his own business. “I had to have back-up plans of back-up plans. Only once I had the fallbacks and emergency fund in place was I able to make the jump.”
Would he offer the same advice to his followers? Within reason, yes. “You don’t need to be perfect and really knowledgeable before you start. The environment will never be perfect for you to start a business, start hustling, or start investing. Just start.”
He does however caution that small businesses must always have an emergency fund. Some businesses are seasonal, which means there will be seasonal downtime too, and it is important to plan for them. You also need to plan for the unexpected. Two years ago, no one had anticipated a global pandemic, and it spelt the end of many small businesses.
“Working well with your money is essential in a small business. There is a fine line between buying stock and having an emergency fund in case something happens. I believe we need to plan for an unexpected crisis rather than just creating more debt.”
The ease of accessing credit is another potential pitfall for small businesses. “If you want it, you can have it on credit. And often we do this in business. We make debt for things that will not generate us money. I’ve seen so many people using the bank’s money for advertising and trying to give their business momentum.” He wants small business owners to remember that if the project they’re investing in fails, all they’ve gained is more debt.
He’s learnt that while most people want to grow really big very quickly without putting any roots in place, it is more important to focus on stability and a future, rather than scaling beyond one’s ability.
It’s who you know
Louis’s belief that relationships are the foundation on which all good businesses are built ties in perfectly with the “Reboot” theme of Global Entrepreneurship Week (GEW2021).
GEW2021 celebrates individuals and organisations who rally behind entrepreneurs and encourage them at all stages of development, through knowledge-sharing and inclusion, to help them succeed in a sustainable and equitable post-pandemic world.
Louis feels that the best way to reboot communities and economies after the Covid-19 pandemic is to foster better relationships. “The importance of looking after people has never been as important as now. Entrepreneurs need to look at building people, who will, in turn, open doors for more business opportunities.”
The net should span further than just your employees and clients. Having an online presence is as critical to your business as a physical one. “Tell your story online,” he says, “build those relationships. You need to focus on people; not only on money.”
And then what?
Once you have the relationships in place, you can decide which clients you actually want to work with. This is often a challenge as you want clients who align with your values and vision and who support your offering. Each client should set the standard for the next, as should your interactions with them.
“How you treat each and every customer that interacts with your business is very important,” he says. “If your customer service is bad, you risk losing current loyal customers and potential new customers. It’s easier to upsell an existing customer than find a new one. Treasure the relationships you build.”
The future is frugal
@FrugalLocal, as always, is generous with his advice. Here are some of his top tips on how your small business can survive – and prosper – on a limited budget while creating minimal debt:
Read, and then read some more. “I would suggest Personal MBA by Josh Kaufman if you want to understand how a business works, and Lean Startup by Erik Ries if you want to do business with little or no money.”
Know what you’re doing when. “If you want to be productive, get up early and take 20 minutes to plan your day.”
Have an emergency fund. “You never know when you’ll need to survive another lockdown.”
Your personality and soft skills speak volumes about your business. “Be consistent. Be honest.”
Don’t use tomorrow’s money for today’s luxuries. “Don’t make debt on things that won’t generate you cash flow.”
When pricing for your business, consider what it’s worth to your client. “How much money will they make from what I am doing?”
Say no when you need to. “If it’s not something you want to or can do, rather refer someone in your network. They will do the same in due time.”
It’s easier to spend more than it is to earn more. “This is why it is important to be frugal with the money you do have.”
And the most important thing he knows? None of the secrets to success work unless you do.
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