I think I am ready now to become an entrepreneur just because I have the Bachelor of Engineering. I think I know how to build the building. I think I am ready to involve in construction business. Just because I think I am an engineer, I will succeed.
I am wrong! It is not enough to become an entrepreneur just because I have the strong technical knowledge and to add more; I have so much experience. I need more than technical knowledge. I need business knowledge.
In 2004, I was desperate for money. My salary is not enough to cover my expenses. I graduated from University. My wife and I were expecting our first baby. The only decision that I ready to make is to become an entrepreneur.
I decided to involve in construction business. It is a big decision at that time. I registered company and aggressively entering government project tender. Lucky me, I won two project worth $70,000. The company is new and I do not have enough money to start the project. Lucky me again, I managed to find partners to bring in the capital. The rest is history. I keep winning the project provide by the government because of the competitive price compare to other contractors.
Five years later, my business collapsed. I lost everything but adding more debt. I am in deep trouble and to make thing more badly, I move to my mother’s house with my family. I keep thinking about what happen.
I found the answer.
My lacked of business knowledge make me fail to sustained the business. Two major problems I have found related to my business collapsed were:
1) Financial related knowledge
In one year, I managed to secure the project worth $800,000. Project is calculating base on 70% capital and 30% profit. I did not realize that 30% profit is project profit only. It is not covering the whole business operation in one year. At the end of the year, I ended with loss in my accounting statement. It is all about cash flow.
2) Business system related knowledge
The company should have business system. Business operation is entirely base on business system. I did not develop the system of business administration, the system of business operation, the system of business finance and the system of business human resources effectively.
It is essential for me to gain the business knowledge before I decided to become an entrepreneur. It is not enough just to have technical knowledge, at the same time the core of business knowledge is abandoned.
Now, I gain my business knowledge, and start all over again from scratch.