Mastering money: Getting ready to set-up  and run a business

It is the desire of everyone to own a flourishing business venture especially when we see successful business moguls doing well in their business endeavours but as much as we admire them and wished that their businesses were ours, how many of us are really prepared to do business even when we have personal resources and supports from kin, kith and well-wishers?

The fact is that not everyone who has financial resources and desires to own a business is prepared to run a business. We easily observe successful and flourishing businesses but hardly do we notice all the preparatory and sacrificial efforts with building blocks that got sunk into their foundation through their gradual metamorphosis.

Just as Rome was not built in a day, a successful business too takes avalanche of resources and time to build but the foundation must be well laid if any business is to occupy its rightful position in the industry and market where it competes. What then is a business and what does it mean to lay a solid foundation for a business?

The word business is perhaps the most commonly used term by everybody on daily basis but it means different thing to different people. James Stephenson defines business as, “the regular production or purchase and sale of goods undertaken with an objective of earning profit and acquiring wealth through the satisfaction of human wants.”

According to Dicksee, “business refers to a form of activity conducted with an objective of earning profits for the benefit of those on whose behalf the activity is conducted.” Lewis Henry defines business as, “human activity directed towards producing or acquiring wealth through buying and selling of goods.” William Pride, et al say business is ‘the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs.’

Succinctly put, a business, therefore, is an organization which seeks to make a profit through the deployment of resources working toward common goals. The goals and objectives of a business will vary depending on the nature of business and the business strategy being adopted. Thus, the term business means continuous production and distribution of goods and services with the aim of realizing profits under prevailing market conditions. Irrespective of the preferred modus operandi being adopted, businesses must offer a service, product, or good that satisfies a need of customers in some way.

For a business to operate smoothly devoid of disturbances, it must be birthed on a solid foundation without which nothing meaningful can be achieved as indicated in a quote by Jack Scalia: “Because if you have a strong foundation like we have, then you can build or rebuild anything on it. But if you’ve got a weak foundation you can’t build anything”.

Laying solid foundation for a business take-off includes making spirited efforts at refining your idea and initiative; writing a business plan; assessing your finances, strength and weaknesses; determining and defining your legal business structure; registering with all relevant government agencies and tax authorities; developing risk management strategy; recruiting and building your team; researching and defining your target market; engaging in self branding and business publicity; and developing strategy for business growth.

Refine your idea and initiative

When thinking of starting a business, you mostly likely already have an idea of what you wish to offer, or at least the target market you intend to explore. It is important that you conduct a quick search for existing players in your identified industry. Study what current industry leaders are doing and work out how you surpass them.

Should you think your business can offer something other companies do not have (or deliver the same thing more efficiently in terms of speed at cheaper cost), it means you have a solid idea and are in position to draw up a business plan.

“Simon Sinek suggests that ‘always start with why,’” while Glenn Gutek, the Chief of Executive Office of Awake Consulting and Coaching”, said that “it is good to know why you are launching your business and in this process, it may be necessary to distinguish between whether the business serves a personal why or a marketplace why. When a why is focused on satisfying a need in the marketplace, the scope of the business will always be broader than a business that is structured to serve a personal need.”

An alternative way out is to acquire a franchise of an established flourishing company in which the concept, strong brand following and business model are already well grounded and all that are required are a good location and the financial resources to fund the operation. Irrespective of which option is chosen, it is important to appreciate the rationale behind the idea.

The Director of Operations and Women’s Business Programs at Covation Center, Stephanie Desaulniers, admonishes entrepreneurs to avoid rushing to write a business plan or worry about a business name before nailing down the value of a business idea proposition. According to Stephanie Desaulniers, many people feel they have a great idea and jump into launching their business without clearly thinking through who their target customers will be, or why these people should want to procure from or hire them”.

“Second, there is need to clarify why you want to work with these customers. In other words, do you have a passion for making people’s lives easier? Or enjoy creating art to bring colour to their world? Identifying these answers helps clarify your mission. Third, it is necessary to clearly define how you will provide this value to your customer and how to communicate that value in a way that they are willing to pay.” During the ideation phase, there is need to sort out the major details. If the idea is not something you are passionate about or if there isn’t a market for the idea or innovation, it might be time to consider and brainstorm other ideas.

Akinola is the Executive Consultant – Financial & Risk Management Advisory & Capacity Development Services

DEMVROS Financial Resources Consult

April, 2019

SUCCESS CLINIC

Something about the subject of fame fortune has not stopped to amaze me since I started to investigate and study the matter. It seems to me that everything we conventionally, traditionally or naturally think, believe, and do is contrary to the laws, principles and dynamics of the divine nature of life and success.

For instance, man is naturally and mentally averse to work, sacrifice and discipline, but stupendously inclined to pleasure and enjoyment. The former are critical indices for the attainment of fame and fortune while the latter could only lead to indolence and mediocrity. King Solomon, the Preacher, said that too much pleasure and enjoyment leads to poverty.

Go to any work environment and you will understand why many people are poor and struggling in life. Very few people are happy doing their work for which they are paid at the end of the month. They are always monitoring time, and complaining of one abuse, dysfunction, or the other. Then contrast this with what obtains in a party situation, which also takes your time and energy, but without any financial expectation or reward. It is in parties that you see the worst and most frivolous instincts of human nature.

That could explain why most serious-minded and success driven people shy away from parties and social gatherings. So, unless you reverse that conflict of values within you by substituting the convenient for the desirable life will be one hell of struggle and uncertainty. May be a recent experience will further explain this paradox of success.

I have a friend, in fact my mentor, whom you will meet more frequently on this page if you keep reading it, who is one of the biggest names in the non oil export sector in this country. One day, he told me of the shipment he was about making. I was staggered, “N100 million in one shipment; what if something wrong happens?”

He laughed hilariously as he often does.

“It is too risky,” I added to save face.

He calmed down before responding.

“My friend”, he began with a sympathetic smile, “something is always happening, but that shouldn’t bother you; in fact it is your responsibility to expect such things and to ensure that they favour you either way. All you need to  do is do what you know from experience is right and correct by avoiding doing the wrong things, and the odds will be in your favour; so whatever happens, good or bad, you won’t lose, at least not overall.” My confusion was evident on my face. “Please explain, I don’t understand”, I confessed.

He laughed again at any ignorance and discomfiture. “You don’t win big if you don’t take big risks, I take big risk because I want to win big,” he declared.

Now don’t deceive yourself to believe that he is a reckless gambler. He is one of the most conservative people I know and above all a practicing Christian. He learnt the hard way and his story is one that will be rare anywhere in the world. At 28 he lost N10 million in 1990 in the same line of business due to his inexperience and over ambition to play it big without sufficient preparation. Although he lost money he gained something more important – experience – and today he is reaping from the experience of the loss.

Here is the problem: Most people become defensive to hide their inadequacies instead of working on themselves to improve the odds in their favour, because ultimately, your success is a direct function of your knowledge of what you are doing.

The point being made here is that whether in business or life generally, you must play to win at  all times. But it does not mean you will always win. On the contrary, you will in fact lose quite a few initially until you master the techniques and attitude of winning. And then, nothing can stop you. The problem is most people become defensive after a few set-backs that they miss out on the opportunity for their own greatness.

So to win, be willing and ready to lose; if you lose; no problem; you can try again. But in most cases, having properly done your home-work, you are more likely to win, if you give it all you have to succeed or win.