I was recently speaking at Nairobi Chapel. After asking a question to almost 4000 people in two services – over 90% of the hands went up.
The crowd was asked, “how many of you have a business?” That, my friend, is the level of competition out there. The level of desire to grow and succeed.
I, like many entrepreneurs out there, like to think of business as a game. A 24/7 match that can never stop or else you lose the momentum you have. Granted no one can pull a 24/7 work schedule – but you get my point. You have to keep at it, there’s no other option.
To that effect, I’m going to give you a few tips about starting a business and running it. Let’s first demystify a few myths around business – and then, hopefully, save you some money on your entrepreneurial journey because few things irritate me more than seeing someone’s potential and money being wasted.
DON’T START A BUSINESS – SOLVE A PROBLEM FIRST. So often we start a business with the main aim of making money and a secondary aim of ‘helping people’. I’ve heard it so many times that it sounds like a recording. Truth is, you can’t make money your number one objective – because often the money will take a long time to come in. What will happen when business is slow? Will you quit when the going is tough in the first 2-3 years? Will you get disillusioned when you see hundreds of other companies vying for the same clients you are? Chances are you’ve answered YES to one of those questions.
Lesson 1: Find a problem that is affecting a large number of people. Find a solution to that problem. Market your solution to the people who are affected by that problem at a fair market price. Poverty and lack of development create INFINITE problems, so if you can’t find that problem – chances are the entrepreneurial journey is not for you.
NEVER BUY SWAG. This tip is courtesy of Mark Cuban. How many startups have you come across that have their own polo shirts, caps, t-shirts and such? Trying to create a brand feel even before the company has started generating revenue. If you think that printing a bunch a shirts with your logo on it is a sign of growth, you’re wrong. If you get excited by it (and you’re not the t-shirt manufacturer) you’re delusional. Simple. To quote Mr Cuban “every time I get a branded polo from a startup, I know they are going to fail”.
Lesson 2: don’t waste precious resources on image building within your team. If your employees need branded stuff to feel like a team, they aren’t one.
DON’T CREATE OFFICE POLITICS. Startups have enough going against them without having to battle against internal demons. One of my favorite quotes regarding this topic is “if you have managers reporting to managers in a startup – you will fail. If you have managers reporting to managers in an established company, you’ll create politics”. How true that is. Walking into some of the large corporates that exist you can see the lobbying that needs to be done just to get approvals. It is exhausting.
Lesson 3: Streamline your business. More employees is not a sign of wealth. Quite often it’s a sign of delusions of grandeur. 25 people doing the jobs of 5. Before its dramatic fall, KODAK employed 145,000 people. When INSTAGRAM was bought by Facebook – it employed 13. Which company do you interact with on a daily basis today?
SHOULD I DROP OUT OF SCHOOL TO SUCCEED? Hell no. I get asked this so many times it’s unbelievable. ‘Why does it seem like everyone who has succeeded in life has dropped out? Does school teach us what we need to know to succeed or am I just wasting my time?’ The questions go on and on and on. Yes, a large number of the world’s wealthiest people never finished tertiary education. But the real statistic you should be looking at is what percent of all dropouts turn out to be large financial success stories? That number is miniscule.
Lesson 4: if you have the opportunity to go to school – GRAB IT. Learn everything you can. Be hungry for knowledge and learn to manage your time well. Patience and a problem solving attitude is what school teaches best. You’ll still be able to get started on your entrepreneurial dream when you finish – at least you’ll have a great fallback option as well.
MAINTAIN A LOW OVERHEAD. It is one of the most irritating feelings to look at a balance sheet and see the salaries, rent and miscellaneous tabs sending the numbers through the roof. Treat your business like a startup. The company is not your wallet. If you’re looking to get fancy offices, better cars and a bigger home at your company’s expense – your company will pay dearly for it.
Lesson 5: Stay lean. Cut unwanted expenses. I’ve seen companies with great potential pitch to us – only to be rejected due to unbelievable salary bills every month for ‘necessary and key employees’. If that necessary person isn’t bringing in revenues commensurate to their exorbitant pay – it’s time to cut the cord that binds them to your organisation and move on.
YOU’LL NEVER HAVE ENOUGH MONEY. Do you think people are lurking in the shadows, just waiting to throw money at your business? Do you think that your brand speaks for itself and requires no effort to acquire clients? Do you think that your idea is so great that an investor would have to be an idiot to say NO to it? If your answer is YES to any of those questions – you’re on your way down.
Lesson 6: You have to get out there and show your worth before seeking someone’s hard earned cash. Keep your business as streamlined as possible. Have big plans, but know how to get there with what you have. If you’re going to wait for money to come to you, you’ll be waiting forever.