Young Businesses and Baby Turtles

Recently I read a tweet from one of my business icons: “A new business is a lot like a baby turtle.” He goes on to explain that only one out of every one thousand turtles is strong to survive out of their nests. The lurking danger for baby turtles includes crabs, birds and the big fish.

For a business however: cash-flow, advertising, recruitment and product inferiority are the hurdles to jump to get past the beginners stage. These are the building blocks of any business plan.

A business plan needs not to be 50 pages long; keep it simple and achievable. As a new entrepreneur you need to think about three key factors before you put everything down in pen and paper.

1.      Finding the right people.

The old adage says ‘no man is an island.’ In life people are imperative to the progress of an individual; once you surround yourself with good people you undoubtedly lead a better life. More so for business, valuable people on your team are greater assets than any goods you can buy.

People who share a similar passion with you about the new business can bring fresh input and perspective than ever imagined. Most people put together a team as the last thing when establishing a business, yet is should be the first thing.

Once you have a team at the initial stages they understand the goals and expected outputs from the onset. They can offer ideas herein and bring new insight even as you begin to set up.

This does not mean that you start worrying about salaries before you have all your ducks in a row. It means you start a conversation and gauge interest of identified persons. This can be through informal coffee dates, phone calls, emails and virtual meetings.

Traditional recruiting for young companies is at times tedious and time-consuming. Always start from the inner circle and ask for referrals if your circle is not appropriate for you business idea.

2.  Establishing a viable brand and brand name.

The fact that you are starting out does not mean your brand does not exist. You need to think about creating visibility for you brand from the get go. You have to study existing brands similar to yours. Find out their steps while starting out, these can be both local or internationally. Borrowing ideas is the oldest trick in the book, it saves you time and expands your mind where research is concerned.

In this digital age we are lucky to have free marketing tools that are effective in getting new brands on the map. These include facebook pages and twitter profiles. You can reach a wide range of clientele through this medium. That said, the traditional “Word of mouth” is still the number one and sure way of getting word across about your brand. Talk, talk and talk some more about your brand.

3.      A cushion against loss

When most people start a business they rarely think about loss. This is unhealthy, starting a business is always a risky venture however prepared you think you are. You might have the right people on your team, a hyped up brand as well as finances but when a crisis hits you immediately hit ground zero.

Imagine your business premises being caught up in an unfortunate inferno in the third month; you need to have a contingency plan to deal with crisis.

In this case your finances need to be in order such that you plan ahead of the business at least six months in advance. You need to be able to project your profits at least in the first six months. You also need to plan on investing into the business constantly at least in the initial 24 months. This provides great cushion in case of any eventualities.

There in, one needs to plan ahead to alter business processes to revert the eventuality of any losses. At the initial stages a business’ primal goal is to survive and the cushion is the saving grace when tragedy hits.

In line with the above a solid business plan should contain the sections below in the simplest form.

  1. Executive summary; Explain business concept, unique financial model, market analysis, existing management experience from the team in the labour force and advisory board, and plan to mitigate any risk.
  2. Mission; Should talk about your workforce first (building blocks of any business), your customers second and the business lastly.
  3. Risk factors; Plans to address cost overruns, how to address failure to meet production deadlines, tackling sales projections not made, inadequate capital, need for technological developments; facing unforeseen economic, social or political developments, unexpected industry trends and threatening competition.
  4. Key to success; What is the x-factor about your business idea?
  5. Objectives; Here we need to see the costing vs. quality argument whereby businesses need to provide the best goods or services at the least cost to achieve maximum profits, also touch on employee improvement and marketing.
  6. Ownership Status; To include the business structure, forecast on the investment, exit strategy and/or any licensing agreements.

Back to the baby turtles; once they get through the initial stages they can live up to 80 years. Such is the story for good business. A successful business can live for several generations as long as it is able to adapt to changing environments.  Read the magazine

Seek First Your Passion

Steve Jobs, the late CEO of Apple, once said that to be a successful entrepreneur one must find what they love. “I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. If you haven't found it yet, keep looking,” he said back in 2005.

With the right induction it is possible for individuals to become successful entrepreneurs by pursuing their passions. You can make profit by doing something that you passionately love. According to statistics, over 75 per cent of micro, small and medium enterprises fold up before their third birthday. This is caused by lack of access to capital, lack of markets, competition to lack of proper managerial skills. Though these factors make it impossible for many entrepreneurs to prosper, I believe the dye is usually cast the moment an individual decides to venture into business. Most people start businesses based on whims, pressure from friends and without assessing if the business is a passion or not. Starting a business is not a problem, making it sustainable is the challenge.

Passion is knowing yourself and being true to yourself. A personal audit is important to find where your passion lies. To walk the path of passion, ask yourself what it is that you really enjoy doing and what solutions you can provide. Introspection is important. Don’t just go with what people tell you or what you see. Some people argue that turning your passion into profit is not possible in Africa due to lack of equal opportunity. That is false. Opportunities are not given. Entrepreneurs seek opportunities, they create them if must be. If you are waiting to be given an opportunity you could be waiting for a long time.

Turning your passion into profit is a process that might take you a lifetime but to which you must be willing to commit. In most cases people jump into an activity they think will make them money, without doing any due diligence, then they quit too early.

Here are three steps to follow in order to turn your passion into profit:

1-     Obtain clarity: What exactly is your passion? What are you really good at?  

2-     Align whatever you are good at with a need in the society. You might be good at something, but if people are not seeking you out for it, either you are not good enough or there’s no need for it.

3-     Are people willing to pay for it? People pay for solutions. If it’s not a solution, nobody will be willing to pay for it.

Everyone has a solution they can provide if they only look deep enough. Like in the parable of the talents from the Bible, you can have multiple passions. Find the one that can provide a solution that people will be willing to pay for. Ultimately the solution you offer is the one that will bring in profits. MKAZI