Entrepreneurship, Business and Life!

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A county governors guide to creating jobs through entrepreneurship

So we now have county governments in Kenya. Most governors  state that youth employment, entrepreneurship and women empowerment are their top priorities.However, it seems that many counties do not have good  ideas on what to do with the groups mentioned above. Some are still struggling to figure out what do to with the county itself, so they do not have  time to think about entrepreneurship. Many have not been entrepreneurs.

I am here to help . Here is what they should task their county ministers who either handle the ministries of  industry, economic planning, youth matters or  the docket that has been tasked to develop a strategy for entrepreneurship. Here are some tips towards developing a county entrepreneurship strategy.

1. Analyse the county

Start by analysing what  assets, economic activities or  high potential sectors exist  that could present an opportunity to develop entrepreneurs . It could be agriculture, light manufacturing, mining or even services like tourism, financial services , hospitality etc. It could also be support services to your main activities which are lacking. for example, construction will always require food services close by . It could be unique products or services that your county can focus on due to its  geography,mining potential or cultural make up. Be sure to analyse the county’s history to pick out what the unique DNA of the county is. You will be surprised how something that has been a big weakness amongst your people could be turned into a globally attractive phenomenon. Oh , and crunch the economic numbers as you analyse your county.

2. Analyse the gaps

Clearly identify the gaps that are present and what the economic potential of closing those gaps could be . Also analyse the gaps present in skills , education or infrastructure for the industries identified . Those gaps in themselves could be opportunities. I hope that someone in Turkana is setting up an oil institute with practical intern-ships.

3. Define your county strategy

Once you are clear on where you are and what you have, you can now project into the future a strategy of how do develop the areas where gaps exist. You can develop a set of programs that address fundamental issues that will build up towards other higher level needs in future. Also be sure to build in some quick wins that will inspire and energize the county towards your plan.

4. Categorize

Make sure you categorise the entrepreneurs. Everyone seems to think that entrepreneurs are a homogeneous group and therefore they come up with a blanket plan towards all of them. I don’t understand this craze that governments have of  funding groups. I am yet to see an example of a great company in the world that was started by a group of 15 people. The norm is that  1 or 2 visionary individuals go ahead to build a team that helps them build a company. Fund individuals , not groups.

5. Develop programs

You can develop programs in line with your strategy like Small Business Development Centers,markets creation programs , capacity building programs, affirmative action procurement programs,subsidies , equity or debt funding, international linkages, investor matching or attraction, venture capital or angel investor programs, the list of potential programs is endless . You could also target partnerships abroad with other counties or regions that could be consumers of your products or services , or those that share similar goals with that of your county and hence they can help you build your entrepreneurs capacity. This is the point at which those  “benchmarking trips” can be converted into value adding trips,where you actually go to sign agreements rather than do a “shopping study tour”.

6. Track results (or  in government language , monitoring and evaluation)

Ensure you have a clear mechanism for tracking the success of your programs . Kindly note that how much money you have lent or given out is not a good measure of success. But focus more on how many jobs you have created, how much growth and wealth has been created as well as the return on the investment that the county has made . You can also start a program in a small way, which allows you to learn and grow it in future , becoming more and more effective with every step you take.

At the county government level, once your strategy is in place, you can focus on removing or lowering barriers  for your entrepreneurs. This is where you can develop policies that can help them address issues like  security,internet connectivity,   infrastructure, energy costs ,capital requirements ,red tape in your county ,market research amongst others that are beyond their individual reach but once done ,will benefit everyone. The list of barriers entrepreneurs encounter in a place like Kenya is long.

You can also set aside funds to set up Research and development  centers and  academic linkages   in institutions of learning. I still cant understand how Kenya has one of the best agricultural universities yet we still practice sub-optimal agriculture. There is a gap between our research, academicians and the market.

A final word to Governors and their teams , dream on behalf of your constituents.Move away from tokenism and focus on value addition and higher level opportunities  . Dont just be comfortable creating micro enterprises, dream of getting companies from your county listed on the NSE or even better NYSE! Dream of them going regional and global! Dream of your people not just setting up kiosks but growing them to be supermarkets and malls. Dream of your farmers selling branded products directly to markets abroad. Dream of setting up industries that are world re-known. Our soapstone carvings should be expensive monuments abroad, our bead work should be a globally competitive industry, our tourism can be more differentiated. And then don’t just dream, but execute.

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Are creative artist(e)s Entrepreneurs?

I have had the rare chance in the last few months to be involved in a number of projects involving the creative arts industries. I have repeatedly asked creative artists( I will use this word to generalise all creative entrepreneurs, forgive me in advance) whether they regard themselves as entrepreneurs. The question is usually followed by blank stares and a pause. Eventually, after some thought,  they say an emphatic YES. However, the general conclusion of people who have dealt with creative artists is that they can be some of  the most difficult people to deal with, and the only business language many of them seem to understand is expenditure.

Creative entrepreneurs can include Musicians, Painters, Poets, Photographers , actors and others in similar lines. My interaction with creative entrepreneurs has made me conclude that many of them do not see themselves as business people. Even fewer understand the dynamics of running a business.

Creative entrepreneurs need to understand one thing. Many times , they themselves are the product or the source of the product that draws people to them. A product requires a business system that can propel it and maximise its value beyond the geographical presence of the person in question. A product requires to be marketed, branded , positioned ,sold,  distributed and the revenue generated needs to be managed in a way that it can be reinvested and accounted for particularly to the taxman. Many creative entrepreneurs ignore the business systems required to maximise the value of their products. This gets many of them into trouble with the taxman and generally causes many of them to squander wealth that could be used for greater things if well managed.

What Steps would a creative entrepreneur take to building a great creative business out of their talents? Here is my take :

  1. Build an audience- take every opportunity to showcase your work, even for free at the beginning . You can increase your fees as you build popularity. This also helps you get in touch with your fans and understand what they like about you. It also helps you improve your craft through regular practice. So do the rounds even if audiences are small at the beginning. If they love your work, its a sign that many more might just do the same.
  2. Be obsessed about feedback – be obsessed about what your fans like and dont like about your work. Look for ways to get formal and informal feedback. Find ways of analysing what resonates with your audience the most.Find out which type of people resonate with your work as they form your primary audience that will help you grow and be loyal to you.  Many artists think that by listening to their audiences they lose their creative juices and their art becomes less “pure”. However, I advice many people that there is no harm in beginning where your fans are, and when you have enough influence  over them, you can then take them to where you want them to be. To your vision of the future.
  3. Improve your craft – keep practising, innovating and improving what you do. Experiment every once in a while with something new. After all you are a creative, aren’t you?
  4. Grow your influence – steadily increase the scope of your influence. Begin in your immediate environment and slowly try to engage fans outside of your immediate sphere of influence. You can do this through collaborations, tours, visits and on-line. However, ensure you keep your primary audiences engaged, they are your lifeline.
  5. Manage the growth- work with great people and build a system around the increasing value of your work. Get good managers to work with. Only work with people who know what they are doing and are willing to be held to account for their work. Pay on commissions basis for example, so that the team proves their worth. otherwise you might just be dealing with an expensive entourage which will disappear at the first sign of dwindling fortunes.
  6. Diversify your investments – when you begin to make good money in your primary art, channel it to investments that can either keep the primary work growing(brand extensions) or into other investments that will ensure you have money well into your retirement and even leave something behind for your children. Investment advisors come in handy here, again, only take advice from people who know what they are doing and have a good track record.
  7. Keep doing good – use your influence to keep doing good things and to reinvest in society.

Needless to say, 1 person cannot do all the above. Many creative entrepreneurs always tell me that their industry is different. I always ask them , how? They say that they need to manage their careers at the beginning until someone can manage them. I tell them that every entrepreneur  begins that way.

How big is the global market for creative artists? The global art market is estimated to be worth USD 11 Billion, the global music market is estimated to be about USD 16 Billion, the global Movie market is estimated to be USD 10 billion a year. How much does Africa contribute to all these industries? Less than 1 percent across the board

Celebrity painters like a Gerhard Richters  painting depicting an Italian city square, which sold in May 2013  for $37.1 million (£23.3m)  the most expensive piece of art ever sold by a living artist. Musicians like Madonna and U 2 can get paid up to USD 125 million a year. Sculptures like Jeff  Koons’s Balloon Dog (Orange) sold at Christie’s Post-War and Contemporary Art Evening Sale in New York for $58.4 million. Keanu Reeves made about USD 156 Million from the Matrix Movie Series.  I’m not saying money is everything, but for sure there is money to be made if you are organised. As an african artist, how will you tap into this vast money machine? Can you play your game at that level and compete with the best by being unprofessional?

My final advice to local creative entrepreneurs in Africa? Learn about business systems, be a leader, get the best people, invest in your brand and company and watch it grow. And when you make lots of money, get good advisors to help you invest the wealth in order to create more and be stable into your old age. Oh and a word of caution, don’t fall into the stereotype that you need weed and hard drugs to make peoples lives around you hard, and “be in the zone” to create.  We all need inspiration in all our careers whether consultants, accountants or manufacturers. Inspiration comes from many sources, don’t use those that can put your life in physical or legal dangers. We have seen many creatives inspire themselves in those ways mentioned above to their graves. Is it possible to finish strong? A dose of humility can help deal with the pressures of fans idolizing you. Celine Dion seems to be able to hold herself together and succesfully avoid the crazy lifestyle that other musicians seem to think is the norm.

So are artists and creative entrepreneurs as special as they think? I think they are. As a friend I met recently put it, they have a spiritual responsibility to inspire the rest of us and help us emotionally connect to progressive or deeper aspects of our lives .Many times its creatives who piece together messaging or inspiration that moves society forward. My response to his statement was that artists should  take their calling all  the more seriously and invest as much as possible to ensure their value , inspiration and impact  is spread out as far as possible and for as long as possible, with them living long enough to see the impact of their work on their grand children.

Time: An entrepreneurs best friend

I usually encourage passionate entrepreneurs to hang in there for as long as they can see positive gains even if they are not monetary in the short-term. This is simply because the formation of good things take time. I have taken some time to compile some reasons why time improves your chances of succeeding in business as long as you possess the right attitude. And there are many reasons why you should hold on . Here are 11 great reasons why you shouldn’t give up.

You gain experience

If you havent been in a particular line of business before , it will take you time to understand what is going on.Even if you were employed in the industry,you will still have to learn how to run a small ship with limited resources. It will take even longer to understand business aspects like finance, marketing, operations and managing people. However, with time, some things start to fall in place. You cannot substitute experience. You can read a book about improving profit margins, but only experience brings the lessons to life.

You get to understand the market

The market is not always structured the way you think it is. Sometimes markets act in very irrational ways. You might find the people you thought would not spend  money on your product are the ones who end up buying. You might also find wealthy consumers to be very stingy when buying certain products or services. It also helps when you understand how the market is segmented and who competes with you at different levels. You get to understand your competition and what they do to gain an edge over you, which helps you to up your game,improve your products or services and beat them at it.

You get to understand exactly what clients want

Clients are happy to tell you what they want and what they don’t want. When was the last time you asked a client what they are happy with and what they are unhappy with when it comes to their interaction with your company? This constant feedback can serve as a source of innovation, and help build loyalty and trust with your brand over the long-term. It can also save you money when you realise that many things you offer as value adds mean nothing to your clients and they would rather do without it.

Clients help you improve your product

As  you begin your business , your products and services may be a new approach to the market or innovative, but it will be rare that you will start off with a perfect product. Also , products and services generally need improvement with time because of changes in fashion, technology,competing alternatives from direct or indirect competitors or the tastes of consumers.

You learn to add other revenue streams

There are some small additions to your primary products or services that can add a lot of profitability to your bottom line. This could be product or service extensions, accessories, support services, maintenance services etc With time, you get to learn about what the clients or customers want and are willing to pay for and add them to your offering.

You get to understand economic cycles and your industry

Industries have unique cycles and so do economies. Take Kenya for example. Every election year we have high inflation and a very unstable currency. The uncertainty makes people  and companies spend less money. However,industries like the media and advertising industry and those making memorabilia thrive in the same period. Looking at annual cycles, different industries are aligned to the festive seasons,weather patterns or school going for children amongst other things. Pharmacies selling medicines for colds and coughs thrive during the cold season when kids are in school due to high rates of infections across  . All these factors affect buying patterns and if you are unaware of those in your industry you could be frustrated when what you are facing is a scenario affecting everyone else as well. The best prepared businesses usually have strategies to counter the down times (discounts, offers, miniaturization of products) or to capitalise on the booms.

The economy grows and the market gets more sophisticated

Africa is currently experiencing fast growth amongst its middle class. This is a spending group that we have not had before in large numbers and it has created demand for more sophisticated goods and services.Who would have thought that we would have been charged Ksh1300 to Ksh 2500 for blankets and wine or Aaron “krucial Keys” Rimbui’s jazz concert (please note both are organised by local artists) and still have a full house? Something is changing in Kenya, fast.

Friends who are juniors in key positions get promoted

Sometimes when you start out in a business, the people you know  in your networks either from high school ,college or social circles are pretty junior in their organisations. But with time they become more influential and senior and get to the place where they manage big budgets and make key decisions.They could be promoted to become CEOs. This opens up an opportunity for you to get business from them if they trust your competency and track record.

Competitors make strategic changes in your favour

Sometime key competitors could get a directive from head office(particularly multinationals) to either exit or change strategy that works in your favour. This could open up gaps that create business for you. A key case in point in Kenya is when Unilever decided to streamline their product portfolio worldwide that saw the local outfit lose Kimbo,a locally branded cooking oil to its local competitor Bidco. Kimbo was a brand with loyal following but their exit provided an opportunity for Bidco.

Government policy and laws change in your favour

When the local oil industry was liberalised by the Kenyan government, it created space for local players to put up all sorts of fuel stations even in your local backyard. Before regulation was tightened, many local outfits proliferated the market. This eventually saw the exit of the large oil multinationals like Chevron, Shell, BP , Agip and Mobil because of lower margins making their business. Government’s at different points either out of insanity, selfish motives,political pressure or competence usually change policies and some might be in favour of your business, or against. Hopefully the former.

Cartels and Old guard leave the planet(i.e. die)  and open up the market for you (a self-explanatory point don’t you think?) 

So if you are reading this you probably have at least another 10 years (if you are 70) to 60 productive years ahead of you. Why then are you in such a big hurry? The only thing to keep in check in the short term is probably the desire or greed to move a lot faster. So hang in there,success is coming.

Why it takes so long in Kenya

Every time I am asked how long it takes for a great business to get established in Kenya when it has been started from scratch, I always give the ballpark figure of about 7 years. This shocks people, because a lot of foreign publications on entrepreneurship and business always talk about 2 years, 3 years at most 5 years. The reality of the market in Kenya is that it takes time. There are a lot of spaghetti problems which you will meet on your journey that nobody prepared you for, and they will have real impact on your business , sometimes even on your life (the life threatening kind). Here are some of them.

Cartels 

You start your business, and start making those marketing calls and visiting clients. Soon, they all start giving you the cold shoulder.You get a few small deals and suddenly you find you are struggling to get raw materials or resources that enable you to deliver quality goods and services. You dig deeper and realise there is a group of business people who have a hold on your industry and they dont like newcomers. They will do anything to kill your business from choking your supply chain to sending police or KRA to your door.

Government bureaucracy

It is perplexing just how complex and slow the government can be in responding to local entrepreneurs (while laying red carpets for foreign investors, using our hard earned tax money). Getting licenses, permits and many other things that are not really necessary to your core business can be an expensive and time consuming affair. Someone should set up a business to overcome this animal called Government.

KRA

Taxes in Kenya are like calculus. And worse, they change every year when our minister reads that long speech we all pretend to listen to and only the hotshot accountants can understand what he is actually saying. Before you can afford that accountant who understands all of them and can keep you out of trouble, you get stressed trying to beat deadlines while avoiding penalties. In the meantime, your morning prayer every day is “Dear Lord please keep the taxman away from our nondescript hidden office” .Woe unto you when they walk through the office front door. This actually makes wise entrepreneurs to avoid the media until their books are all cleaned up. In the meantime, “stealth operations” are the order of the day.

Skeptical Kenyan Consumer

Kenyans are very skeptical of new products and companies. Particularly big companies. It doesnt matter that they were your clients when you were at the agency. once you jump out, you have to build your own credibility and they will not be the guinea pigs for it. You are forced to prove yourself by doing pro bono or loss making work in order to come back and say that “so and so are my clients”.

Extortion Rings

Despite paying government taxes, there are areas that have additional tax collectors in form of gangs, which operate openly and even give you receipts for the hard earned money that you pay them. It leaves you questioning whether at some point, our police force deliberately outsourced protection services to some of these territory managers.

Goodwill

For some reason, there are those who believe that over and above the exorbitant rent you will be paying, you need to pay them a lot more money at the beginning for them to be gracious enough to allow you to operate from their strategically located premises. This significantly reduces the period in which you can break even. Imagine having to pay 2 million shillings extra to get a space in a commercial building . Thankfully , this is reducing since  we are slowly beginning have an oversupply of commercial spaces as the building boom rages on.

Peculiar markets

Kenyans tell you they like a product and would spend money on it, then they don’t buy it when you avail it. We have a culture of being polite and too afraid of speaking our minds. All people you will sell to, will always leave you at a space where you think they are buying. 6 months later you figure out they are not real buyers, just afraid of saying no to you and looking bad (or broke).

Dominant market players

Every market has 1 dominant player, few middle players and thousands of broke or unscrupulous players. Look at beverages Coke dominates, few in between, many other unknown brands try to entice you. Beer, EABL dominates, Keroche nips at their market, Kumikumis blind people all over. Advertising, Scangroup dominates, a few struggling local players, former marketing executives fight it out for the crumbs. Telecoms Safaricom Dominates……im sure you get the drift. My assessment is that other players simply try to emulate the market leader rather than carve out their own niche or unique products that sell themselves to frustrated markets.In the meantime, some dominant players can resort to legal means that guarantee you wont get business,like giving unfair incentives to your retailers or suppliers until you run out of your savings and dust your CV.

Ignorant business leaders

Many large business owners might have gotten there through political patronage, corruption or inheritance from their fathers chief gifted wealth in colonial times due to his loyalty to the system. They do not understand the value of a good product or service and getting them to spend is like pulling out their teeth without anaesthesia. Which leaves you, the value selling entrepreneur at a loss of what to do.

Broken legal system 

Someone screws you over, you take them to court.They win and you pay their legal costs and they never pay you your money. You lose faith in the legal system and dust your CV(again,last time you were encouraged to stay on). Months later you see them celebrated in the entrepreneur section as a model business person for the country to laud.

Greedy partners

They want you to do all the  hard work, they want to make all the money.All because you foolishly let them  put in Ksh 300,000 to be a 50% partner because you thought money would solve all your problems. You burn through it in 2 months and are back to scratch. Need I say more? Make sure you share the same Vision, and more importantly VALUES before you partner with anyone. More on this later.

Small and broke private sector

In other developed economies , the private sector is usually much larger than the Government and development sector combined. In Kenya and Africa in general , Government and NGOs form the largest spenders. And both are bureaucratic and rife grounds for corruption, enough to discourage any well meaning entrepreneur. Since every large company wont touch you with a 10 foot pole, you are left convincing your fellow broke entrepreneurs to be your clients and get into the vicious cycle of not paying each other.

By the time you navigate the above maze and survive break ins, skeptical family, debtors, homicidal employees….. time has passed. And a lot of it. Which is why when you see an honest succesful Kenyan business person, salute them and acknowledge that they are tougher and more resilient than a Kenya Army soldier (before they went into somalia that is). However I have found that the rewards to the resilient ones is usually quite large because you step into the promised land and find very few players to share the spoils with. So it pays off and next week ill talk about some of those businesses that I have come across.

The good news is, with the changes happening in the judiciary, government structure, macro economic environment (don’t worry i also can’t tell you exactly what that means but i believe the CITIZEN, NTV and KTN business news guys) its getting better and easier and eventually we will get to the place where it takes those 2 years you read about in western literature.

A powerful vision is ALIVE!

Every entrepreneur begins with a vision of the future.  But there are a few who begin with a powerful vision. One that goes way beyond themselves and if brought to pass, would revolutionize how things are done in the industry, society, culture or economy. It would transform lives, change lifestyles, force people to adopt a new way of doing things that makes them wonder how they survived without you in the first place. They find it hard to imagine a life without you and what you put in place. This type of vision is for a select few, those who see things that others would only experience to believe that it’s possible.

This vision usually has a life of its own. And despite the fact that the vision bearer may think they own the vision, it actually owns them. And it goes through a life cycle.

A Powerful Vision usually begins with many excesses but goes through a period of refinement, where it strips away all the chaff and begins to rebuild itself. These excesses come in the form of exploitative business partners, expensive offices, impressive gadgets and machines, excess staff, and pretentious clients many of whom don’t believe in your product or services as it is. At this stage the Powerful Vision looks down at the vision bearer and says “The vision bearer is not ready to carry this vision, if they continue like this, the powerful vision will not come to pass”. The vision is wise enough to recognize that the initial configuration of the set up is bad for the vision. The vision at this point is usually driven by greed masked as change for society. Whilst the vision bearer may say they want things to be different, their primary objective may be to grow rich and wealthy and make a lot of money for themselves. But the Powerful Vision knows that this focus will destroy the vision bearer should it happen too soon. The Powerful vision usually sets out to straighten things out because it knows that the vision bearer is not ready or maybe the market is not ready. And this straightening of things will take time and test you, the vision bearer, to the core of your being. Setting you on a path of true soul searching and self awareness.

The powerful vision will systematically take you the vision bearer though a series of tests. It will strip away initial partners who were in it for quick or selfish gain without putting in any work. They will begin to fall out as soon as they realize it will not be an easy journey. Then it will ensure there isn’t enough money to sustain a lifestyle of careless spending. In the times of need you will have to get accustomed to careful spending, cost cutting and budgeting, many times unable to do things aligned to your greed. Your self esteem will be tested when all people around you seem to be doing better than you. It will strip away initial cheerleaders who begin to doubt your prowess as they walk away to pursue their own interests that put food on their table. They will get tired of giving themselves to your cause for no immediate return. It will strip away employees whom you thought would die for the company only to realize you are the only one willing to give everything for it to work. It will even strip away fake clients who only bought from you as a favour or because they are family or friends. They will begin to question the value that you sell and when they do not see it they will pull away.

All the stripping away leaves the vision bearer in a wilderness. All alone, tired, exhausted and burnt out with very little results to show for it. It is at this point that the vision bearer will begin to ask themselves tough questions about why they are really doing what they are doing. Was it for the money? Was it for change? Was it for all the above? Those with ill intention will either quit or resort to underhand dealings. Those with pure intentions, to create sustainable change, will affirm themselves with powerful answers that go beyond money making. They will remember the reason why and they will examine their hearts and realize that it was not just for the money. At this point, the Powerful vision will look down at the vision bearer and say “You are now ready to carry the powerful vision forward; your heart is in the right place”. At this point the vision only leaves room for true believers. And true believers set the foundation for greatness.

The powerful vision will open up the vision bearers mind to innovative ideas, creative solutions, new resources, new ideas for products and services, new markets that they had previously not seen. The powerful vision will enable the vision bearer to establish clarity and focus and know exactly what is required to take the vision forward, even if at this point the money is not streaming in bucket-loads yet. You the vision bearer will be energized, not by the big results but by the steady and consistent progress you make and the few believers that cheer you on. New clients, new partners, new employees, new suppliers, new stakeholders all aligned to the vision and the bearer’s values will be attracted slowly but surely. The wheel will begin to turn and results will begin to stream in. First a trickle, then a steam, then a river and eventually a waterfall. The vision will take off so powerfully at some point that the vision bearer will have to run to keep up with it. It will be like riding a bull that is charging forward without any prompting. First a small locality will feel the power of the vision, then it will be felt in the next village, then in the district and it will keep growing. The more powerful it is the more it is likely to reach far and wide, sometimes touching far corners of the world. Some are so powerful that they out live the vision bearer and grow even more after they leave us. At this point, the Powerful Vision will reward the vision bearer with much more than they had ever dreamed of. Money, satisfaction, recognition and a legacy. But most of all a refined character and a feeling of security in who they are and not what they have. They will not need to show off to others or be arrogant. Be prepared at this point for the unbelievers and cheerleaders to return, singing your praises and taking credit for getting you there.

All because the vision bearer was the only one sensitive enough to realize that something was very wrong with the world as it is today, and were willing to pay the price to give their lives to something that was going to change the world as it is. Because what we have today is the powerful vision of a vision bearer in the ancient days, and what we will have tomorrow will be the result of some powerful vision bearers of today.

Are you a vision bearer or living in the vision of another long gone? The lack of vision bearers today leaves us at the mercy of the greedy, negligent or archaic thinkers. Step forward oh you vision bearer!

Finding your place in this (entrepreneurial) world

 

“How do I know that I am doing the right thing?”

This one is long but bear with me, it could change your life.

The entrepreneur is always faced with many questions and choices that make us think a lot. In fact I don’t know of any group of people in the world who think more than entrepreneurs. We are always thinking about our businesses. We wake up with a start at night with an answer to a question that had been disturbing us all week. We get ideas about what to do next when stuck in traffic and jot it down in our ideas notebook that is tattered and full of ideas, many of them not implemented because we are waiting to get the elusive money to put them in place. However, one question that bugs many entrepreneurs especially in the early stages is determining whether they are in the right kind of business or not.

Interestingly, knowing whether you are in the right business or doing the right thing at the moment is something that will continue to nag you for most of the journey. Usually, when things are going really well like when you just got that client you have been chasing for 2 years,when you get recognized in the media, when you receive an award or when a client mentions how your work has changed their lives, you feel at home, you feel like this is what you were created for. You feel ALIVE!

But then there is the flipside. There is that time when you disappoint a key client or when you lose a client account that pays half your bills, or when you are at a contract signing stage  of your biggest deal and the client pulls out citing policy changes at head office.It can also be when that pivotal employee leaves, or in the worst case scenario, the dark days when the  3 unwanted visitors show up. The Taxman, unpaid landlord or Auctioneer. These are the days you want the ground to open up and swallow you. The days you  barely sleep and dread when morning comes. These dark days come with some of the biggest doubts you have had about your abilities and whether you were ever meant to be an entrepreneur in the first place.

If you oscillate between the dark and celebratory days several times in a month,then take heart, you are quite normal.

Over time, I have come to observe that those who seem to be in their element and who thrive possess 3 key things . These are Passion, Competence and Products/Services that meet a definite need in the market. When these 3 ingredients meet, the result can be magical,even if it takes time to come to pass. It doesnt work for all,some success stories fall outside the 3 ingredients but this can help you think through your own journey and possibly point out where the frustrations could be coming from.

Passion is when your heart beats for what you do. You have an emotional connection and you think about it all the time.You have a big dream for it and always picture yourself in the future having made a difference when it all works out. You would do it for free, only that reality requires that you do get paid. Without passion, you will not survive the hard and harsh times .  You will not commit to excellence and once money comes in and  you will lose interest  becoming just another player in the market making money but no impact to the society and industry. Passion makes you go the extra mile in all manner of ways.Be it to please clients,innovate or make amends when things go wrong. Passion will even cover for lack of competence sometimes and drive you to acquire it. This one is perhaps the most important.

Competence is either professional training,talent or extensive experience in the field that your company is operating in. You understand the technicalities behind your products or services. You research extensively about it. Maybe you have gone to school for it and understand how things work in the background .You can explain the deep concepts but can also break it down to be simple enough for your grandmother to understand. Without competence, you will be at the mercy of your technically adept employees especially when you are too broke to keep them for long before they find better paying alternatives. You will also find it hard to give strategic direction and drive your teams to be innovative. You can acquire it over time but the faster you do so the better. Those with large amounts of capital are able to buy talent easier since they can afford it but those who don’t need to incentivise their technicians creatively. Others partner with a technician and complement each other.If you are not competent, try in every way possible whether formally or informally to build it. You can read books and magazines. You can join your technical employees on assignments to learn what goes on. You don’t necessarily need to be the best at doing it but you need to know and understand what goes on. Don’t take vague explanations from your team.

Market need means there is more demand than supply and you have an angle that guarantees you will do it better than everyone else, or at least differently enough to capture a section of the market that hates current alternatives. Many people run companies that have products or services that look good on the outside but the market doesn’t really care for. They simply dont need it or want it,they are happy with the status quo until you convince them otherwise. These entrepreneurs  live in a fantasy world where they believe that since they think its important then everyone else should. Clients vote for a business only with their money, not their mouths or empty praises and promises.Listen to the customer and give them what they need. It will save you time and make you a lot of money in future. Dont necessarily buy the Steve Jobs theory that the market doesnt know what it wants. To get to that level you need to have a very deep understanding of the market to anticipate what they need. For now, listen to them and start with where they are

Get to your area of highest potential. It will propel you forward.

 

THE BEAUTY OF STARTING small

Many people intending to go into business usually ask me what is the one thing that is most important. My answer in the recent past has been consistent. START SMALL.

Unfortunately not many people want to hear this, because the reason we go into business is to become rich and to build a BIG humongous money making business.I find it amusing how almost  every startup has Safaricom ,Barclays bank or similar big companies on their hit list. They all seem to know someone on the inside who has promised them a contract. 6 months down the line the contract is elusive, and if it comes through they get paid in 120 days,deep in debt and disillusioned.If you are keen on starting big, you might be better off walking into a casino and trying your hand there. Your chances of riches in the casino might be higher,and if you lose all your money, you will not have auctioneers and angry unpaid employees at your doorstep. The only place a business should start big is in your head, DREAM BIG!

The reason I give this advise is because if you have not been an entrepreneur before, the biggest mistake you can make is to go into a big investment right away. These come in the form of plush offices with new furniture, computers,gizmos,randomly hired staff and unnecessarily high rent. Sometimes the entrepreneur will even buy a sleek car on loan to impress their potential clients. Even if you have saved up millions of shillings, or have access to large amounts of money through a partner or investor, I still insist that you start small. Heres why…

Entrepreneurs begin with very unrealistic assumptions about the market. In fact,those who come from big companies and have identified gaps in their industry , are likely to make the biggest mistakes.They bring their big company mentality into their small business. What they dont realise is that their small business is a very different ball game from the big company they worked for, and in a few months the reality begins to sink in. They soon discover that they dont have the bucket loads of cash to waste on lunches that their former employer had, they dont have the trust of the clients, they dont have the brand name and legacy and sometimes, they dont have the capacity to deliver on the same scale.Their  may even have their golfing buddies quickly abandon them and even if they move with 1 or 2 big clients, they soon realise that they have to work even harder to attract and retain more clients.

Starting small mitigates unseen risks. Starting small has no prestige in it, and definitely doesnt promise big money in the short term. But it can save you a lot of problems in future. If you want to start a restaurant, before you go and put millions of shillings into a facility, start with outside catering for your friends and see if they like the food. If you want to start a marketing agency,nothing stops you from doing trial jobs while still employed just to see if people are happy with what you do. If you want to start an airline , do what richard branson did and hire a plane and see if you can do one route succesfully even if its from Nairobi to Lodwar several times. The beauty with such low risk ventures is that if something goes terribly wrong, you have the opportunity to rectify it quickly without causing much damage, and also you can manage the growth without losing a lot of money and making lots of enemies in the process in the form of disappointed clients,re-possesive bank,  unhappy employees or competitors out to destroy you and your descendants to the third and fourth generation.

2 things to keep in mind today

1. If you are employed , start on a part time basis on weekends and after work or during holidays before quitting.

2.If you were brave enough and already  jumped ship ,look for an unserved market or a gap where the  industry you are venturing into is doing a bad job.  It could be a fully fledged product or service, or a support service to the industry. For example, if you want to venture into insurance, you could either start selling insurance directly or you could go into training insurance sales people if you identified that every company did a bad job in training their people. If you want to go into construction, you could buy a rare piece of construction equipment and hire it out to established players or offer a rare service as a subcontractor to the big companies.If you want to start a school, how about tutoring the neighbours kids and see if their grades improve.

Starting small may take years to yield fruits, so you could do something else in which you have a competency to supplement your income before your company takes off. Lecture at a college, be a freelance consultant to your former employer, be a part time employee at your industry lobby association. Be creative, find something.

There is definitely many people who may start big and make it big ,but I usually find that they either have large sums of money to kickstart them, have venture capital backed by expert advise and management from the investors or have an experienced business partner who has cut his or her teeth in business and therefore can help them navigate the terrain. The rest of us mere mortals have to sweat it out for years. Sometimes one is just lucky to step into something new that is just about to take off that makes them extremely wealthy in a short period of time.Early telecoms  dealers made billions by being the first movers in the new industry.  However, this is normally the odd story rather than the norm.

Finally, be proud of whatever you do. Dont look down upon yourself. Every great company today started small in a public phone booth,  garage, SQ, street corner or at a kind friends office kitchen. My business partner  told us today that the only difference between a small elephant and big elephant is time and food.