Becoming Your Own Boss: Ten Steps To Starting A Business From Scratch

By Tiri Kuimbakul

If you have read Be Your Own Boss Volume 1 and 2 which discussed a total of thirty reasons why you need to start your own business instead of seeking or holding a paid job, here is what you will learn from this book:

* The Predicament of the Working Class in the 21st Century.
* The Conspiracy of the Rich.
* Why today is the Age of Entrepreneurship.
* How to assess your Entrepreneurial Abilities and Develop Viable Business Ideas.
* How to Research a Market and Develop a Winning Business Plan.
* Raising Start-Up Capital and Business Entity Selection and Registration.
* Business Establishment, Marketing, Sales, and Revenue Generation.
* Business Management and Statutory Compliance.

• Language: English
• Publisher: Xlibris AU
• Release date: Aug 3, 2023
• ISBN: 9798369492734

Tiri Kuimbakul

Tiri Kuimbakul graduated from the University of Papua New Guinea with an Honours Degree in Economics in 1988. After working for public and private sector organisations for 12 years, he became self-employed. Today he writes and speaks full-time as a motivational speaker, trainer, business coach and mentor. His areas of focus are Personal Development, Personal Finance, Business, and Investing. He is the author of Life After Graduation, Winning The Game Of Money and Be Your Own Boss Volume 1.

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Copyright © 2023 by Tiri Kuimbakul.

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

Any people depicted in stock imagery provided by Getty Images are models, and such images are being used for illustrative purposes only.

Certain stock imagery © Getty Images.

Rev. date: 08/02/2023

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CONTENTS

Introduction

Chapter 1     The Predicament of the Working Class

Chapter 2     The Conspiracy of the Rich

Chapter 3     The Age of Entrepreneurship

Chapter 4     Assessing Your Entreprenurial Abilities

Chapter 5     Developing Ideas for Products or Services

Chapter 6     Conducting Market Research

Chapter 7     Writing A Business Plan

Chapter 8     Financing A Business

Chapter 9     Entity Selection and Registration

Chapter 10   Establishing A Business

Chapter 11   Marketing And Sales

Chapter 12   Managing Your Business

Chapter 13   Statutory Compliance

Conclusion

INTRODUCTION

T HE MAJORITY OF students numbering in the thousands drop out of school every year in Papua New Guinea. While the Government focuses on educating even more people every year, those who drop out fade into oblivion in the sense that they are forgotten and not accommodated into development plans at all.

These young people who are left out by the system feel hopeless, frustrated, and even angry. They face rejection from parents, other members of their extended families and society at large, which forces them into drinking alcohol and ‘home brew,’ taking drugs, engaging in anti-social or criminal behaviour, etc., as a way of expressing their frustrations. Many girls are forced into marrying early while some sell themselves to prostitution in order to survive.

Most of those who continue on to College and University find that the jobs they have trained for don’t exist. As one of my mentors says, "Most graduates find themselves beautifully prepared for a world that does not exist."

The education system produces too many workers compared with the number of new jobs created by the Government and the private sector. As a result, many graduates search for jobs for months and years and end up in great disappointment.

Many observers liken the unemployment situation in the country to a ‘time bomb’ which ticks away with each passing year as the army of educated but unemployed, disillusioned, and angry young people keeps on growing.

My assessment of the possibilities for job creation in the country is that apart from the teaching and medical professions, the police force, and the private security industry, there is not one sector or industry that can create the thousands of new jobs that are needed to accommodate the thousands of job seekers in the country. More teachers will be needed to cater for the education of an increasing population; more doctors and nurses will be needed to care for a rising population of sick and unhealthy people; and thousands of police and security personnel will be needed to contain lawlessness in a country plagued with unemployment and poverty.

I do not hesitate to predict that in the light of very high population growth by world standards coupled with developments in information and communication technology (ICT) resulting in increasing automation of systems and processes and less job creation, there will never come a time when every jobseeker in the country finds a well-paying secure job.

The much-touted resource and manufacturing sectors will not generate enough jobs for graduates, not even large-scale agribusiness, because these sectors are by nature capital-intensive. That is to say that businesses in these sectors install and use more machinery, equipment, computers, and information technology aimed at employing less people because people usually cost a lot to employ.

Foreign investors entering these sectors will promise thousands of new jobs in order to get their feet into the country (and they will get political leaders to broadcast the promises for them) but once they are established in the country, they will computerise and automate their production systems in order to be profitable and thereby negate the need for the number of full-time jobs they promise to create. Because they will be contributing in other areas, it will be difficult to hold them accountable for not providing the jobs they have promised.

Many of the jobs which are created in these sectors will actually be occupied by foreign workers who are more skilled and disciplined than local workers.

I fear that unless opportunities are created for the youth to engage meaningfully in the economy to sustain their lives, lawlessness will escalate out of control and even result in a state of anarchy in many parts of the country. Seen in that light, the deteriorating unemployment situation in the country is actually a national security risk.

With this dire possibility as the backdrop, the purpose of this book is to open up the minds of readers to the only alternative that is available to school leavers and other unemployed people. That alternative is self-employment through business.

Since the education system fails the great majority of students, and most of those who succeed in graduating from College and University cannot get jobs, the only viable option they have is getting into business for themselves.

Employed people will find the book to be useful too because jobs have become very insecure these days. I stated back in 2006 in my book Life After Graduation that job security is dead. The idea of getting and holding a high-paying job for life is dead today because of major disruptions in the world brought about particularly by the ICT revolution. Such disruptions include mechanisation; computerisation; the Internet; robotisation; 3-D Printing; Augmented and Virtual Reality; Artificial Intelligence (AI); and Internet of Things (IOT).

As powerful computers, machines, and robots have taken over most of the tasks that have been carried out by humans in the past, millions of jobs have become extinct and millions of people have become jobless. This trend is going to increase in the years ahead.

Two other causes of insecurity are the increasing tendency for organisations to outsource tasks to outside consultants, contractors and experts, and for manufacturing companies in particular to take their factories offshore to countries with relatively cheaper labour and utility costs.

The Corona Virus Pandemic has added another dimension to job insecurity, with lockdowns and forced vaccinations. If what conspiracy theorists say is true, we can expect more natural and man-made viruses which bring our inter-connected and organised world into disarray and insecurity.

The only hope people have is to become self-employed. Let me put it this way: The only alternative to unemployment in Papua New Guinea is self-employment. And the real solution to the problem of unemployment in Papua New Guinea is not employment but self-employment through small business.

This book is the third in the Own Boss series. The first two books are titled Be Your Own Boss Volume 1 and Be Your Own Boss Volume 2. These books discuss a total of thirty compelling reasons why readers should seriously consider starting businesses and becoming their own bosses. They focus on the whys of becoming self-employed through business.

I have received many testimonies from people who have started their own businesses after reading the books. Some people have actually resigned from their jobs to get into business for themselves.

For example, a health worker went into coffee buying after reading Be Your Own Boss Volume 1. His wife actually found the book in a public rubbish bin and presented it to him as an Easter present. The man read the book over and over for two years before using his annual leave money to buy parchment coffee and sell to factories. Today he owns a coffee factory which sells green coffee to exporters as well as a roasting plant which produces and packages roast and ground coffee. He is in a position to export his coffee to overseas buyers too.

Another rural development advocate stole a copy of the book from his sister while he was working with an NGO. Inspired by the book, he went into spice production and processing after reading it. Today he is the biggest buyer and processor of organic spices in the Highlands.

These and many other stories will be published in an upcoming book to be titled Own Boss Success Stories.

Becoming Your Own Boss – the book you are reading now – is about how to start a business from scratch.

Chapters 1 and 2 describe ‘the predicament of the working class’ and ‘the conspiracy of the rich’ respectively. Based on history, these Chapters are aimed at helping readers to realise that working for other people for money is not as desirable as they have been led to believe.

Any reader becoming aware of the predicament of the working class and the conspiracy of the rich should be concerned enough to want to get into business for themselves because, as I explain in these Chapters, the working class lifestyle was modelled on slavery and it is meant to be a life of struggle from payday to payday which ultimately leads to poverty for the majority. This is especially so in the Information Age which is characterised by job scarcity, job insecurity, high taxes, and rising prices.

Not only that: Business is the arena in which the rich play the game of money and consolidate their power over the poor and working class, which is also the real reason why entrepreneurship is not taught in educational institutions.

Chapter 3 shows why I believe that the age we live in today is the Age of Entrepreneurship. I hope to convince you that it is easier to start a business and become financially secure today than ever in the history of mankind.

The rest of the book – Chapters 4 to 13 – takes you through the basic steps involved in starting a business: from self-assessment to idea generation; market research; business planning; financing; registration; establishment; marketing; management; and legal compliance.

I really hope that you will use this book as your handbook for starting and operating a successful or profitable business for your benefit as well as for your family, community, and country.

CHAPTER ONE

THE PREDICAMENT OF

THE WORKING CLASS

T HERE ARE THREE classes of people in the world: The rich , the working class , and the poor . The poor generally work for themselves at the subsistence level while the working class works for the Government and private businesses. The rich get other people to work for them.

The education system trains, moulds, shapes, and programs students to work for others (the rich) for money. That is why all students apply for jobs immediately upon graduating. They do that because that is what they have been mentally conditioned to do.

Students who drop out or can’t get jobs feel hopeless, as if it is the end of their lives. That is also the result of the conditioning students undergo in school.

In Be Your Own Boss Volumes 1 and 2 I have highlighted the many differences between people who work for others and those who own businesses. What I want to discuss here is what I call the predicament of the working class.

A predicament is defined as "a difficult, unpleasant, or embarrassing situation." It is also a situation which is difficult to get out of. It is a state of being trapped and restrained from all sides.

The predicament or trap of the working class is this: On the one hand, their incomes or salaries and other cash and noncash benefits are limited by the employment contracts they have entered into with their employers. In addition to incomes being fixed by employers, those limited incomes are highly taxed by the Government. The result is that their disposable income is massively reduced.

On the other hand, the purchasing power of the income is depleted by inflation or rising prices. As if this wasn’t enough, workers also pay consumption tax (Goods & Services Tax – GST) as well as a myriad of fees and charges imposed by Government-owned entities.

Salaries are based on the number of hours in a working day. In other words, all that workers take into their jobs – their strength and energy, skills, knowledge, experience, expertise, and talents – is reduced to time and they are paid by the hour. That is why most workplaces have time-clocks for people to clock-in and clock-out every working day.

Since time is limited to eight hours in a normal working day, income is limited to the number of hours multiplied by employees’ hourly pay rates. No matter how high salaries are, the fact remains that they are limited by the time that they are traded for by workers.

Let us look at how these forces affect the living standards of salaried people.

SALARIES AND WAGES TAX

The way the tax law is written, personal income (salaries and wages) tax is progressive, meaning that the more people earn, the more tax they pay.

The Income Tax Act defines personal income as:

"a) salary, wage, commission, bonus, remuneration of any kind or allowances (whether at piece work rates or otherwise) in respect of or in relation to the employment of a person as an employee; or

b) any remuneration, by way of fees or otherwise for professional services or services as an advisor, consultant or manager (whether at piece work rates or otherwise) where such remuneration is paid wholly or substantially for personal services rendered by that person in Papua New Guinea."

The definition seems like a mouthful but essentially it is intended to cover almost any remuneration, reward, or payment made to an employee, in whatever form, subject to specific exemptions.

Examples of tax-exempt incomes are school fees paid by employers directly to an educational institutions; education allowances; scholarships; annual leave fares; and superannuation contributions made by employers. All other benefits are subject to tax.

Personal income and tax rates effective from 01st January 2019 are shown in the schedule below.

It is clear that the more educated and experienced workers are, the more they are paid; but the more they are paid, the more tax they pay. This is as far as income tax is concerned. Benefits such as motor vehicles and housing are taken as part of the employees’ remuneration and are taxed as well. If such benefits are paid to employees in cash, the amounts are taxed at recipients’ marginal tax rates.

Actual taxes payable are based on Tax Schedules issued to employers by the Internal Revenue Commission (IRC). Low-income employees receiving a certain annual threshold are exempted from income tax. Amounts exceeding that minimum amount are taxed at various base and nominal tax rates, with rebates for the number of dependents that employees support with their income.

Effective from 1 January 2019, employees who had submitted their Salary or Wages Declarations and received up to K481 per fortnight (or K12,500 per year) did not pay any income tax. Tax became applicable from K482 per fortnight onwards, with the actual amounts varying based on the number of dependents declared. The rebates were K17.30 for one dependent; K28.85 for two dependents; and K40.38 for three or more dependents.