He uses all his social media handles to expose young entrepreneurs to very important and useful business tips. Follow Mr. Mohammed on Instagram @ mo_babngida, Twitter @ hamid_mohammed, Facebook @ Mo Babangida and LinkedIn @ Mohammed Abdul Hamid.
Bellow are all the tips shared for 2019. Please share widely.
I think the collapse of businesses goes beyond these two major but quite common challenge. People should first if all understand the businesses they do and the industry they are operating in. Know the worth of the industry, the operational hazards, challenges, threats and opportunities. It's wrong to just jump into business for reasons other than passion, wisdom and some in depth understanding.
Most young people don't necessarily know what category of economic activity they are operating in. Is it a small business or a start up? These are two different things that requires a totally different business module and commitment.
Understand the reason behind your business. Have a clear cut goal and target. Else, you become like a ship with no compass. Moreover, people should know that a sustainable business is more important than a profitable yet unsustainable one. Make sure the business you are doing has a long term competitive advantage. You should either have a unique product, unique service or unbeatable buying and selling price. This is what makes a business generational
People should also learn to adopt basic business ethics and values. Business in every sector is guarded by rules. Understanding the rules of your industry is key to your survival. Avoiding personal interest is a cross-industry rule that most young Zongo businesses find it difficult to avoid.
Also, owning a business is different from running a business. There is a difference between a CEO and a Manager. A Manager manages today's business, a CEO manages tomorrow's business. Know where your strength is and outsource the other. If you don't have the capacity, then study.
Don't try to own or control every aspect of your business by yourself. Being a good business Man also requires the ability to delegate roles to talents you have identified. Ultimately, learn how to partner. This helps you to leverage on resources that you can not pay for currently, to develop your business.
Develop good networks for your business. Your network determines your net worth, but on one condition. The network should be a functional one. Don't just know people, make them relevant to the growth of your business. Develop an accessibility with them. You should be able to fall on them for help anytime thisgs get difficult, because they will. Make them your support system against the storm. Your network should function as your support system. If it doesn't, then it has nothing to do with your net-worth.
Everyone wants a good opportunity. But only a few are willing to make the necessary sacrifice and commitment that comes with exploring these opportunities. Some people want everything done for them. They are still waiting for their success to be served at the dinner table. This happens even in bussiness. Unfortunately, it doesn't work that way. Change this perception, and see the other version of a miracle in your life. The kind of miracle you can experience each and everyday.
You need to be careful when choosing a business activity to develop or even invest it. For a business to be worthy of your time commitment and resources, you need to look out for two very important features. The business should has developed or has the potential of developing a unique product or service brand that does not require too much modification. You don't need to spend so much money on product designing and research development every year. Unilever, St. Loius Sugar and Coca Cola are good examples. Or, the business has developed or has the potential of developing a unique product or service brand that allows you the monopoly to charge high for your product or service. This is mostly with products or services that are of regular demand. Ghana Watwr Company, MTN and ECG are good examples. This way, the business saves or will save lots of cash every year to give room for staff motivation and huge bonuses.
A start up could take an average of about three to five years before making substantial profit. It could be more or less depending on the industry you are operating in and the type of good or service you have to offer or what need of society your business is addressing. Have a clear vision and implementation plan for your business. Know when it's normal to make losses, break even or make profit. In this case, you reduce the risk of failure and the fear that comes along with it.
The business manager knows the market, the business owner knows the industry and the business consultant knows both and more. The knowledge of the industry and market are the most critical in business development. However, regardless of the competency of management, the business sometimes doesn't seem to be doing well. What people don't realize is that a business is like a living being. When it is fed with the right resources and intelligence, it does well. On the flip side, a business can get sick when a few things are not going on well. It will take the experience of a professional to diagnose your business by studying the entire business channel and prescribing the appropriate recommendations needed for improvement. For a start up, you might not be able to employ the services of a consultant. The best is to sign up with an Incubator hub that can provide you with free or subsidized basic consultancy, mentoring and business advisory services.
Moreover, learn to pay for business advisory. Don't think that it's the big cooperations that need to hire and pay for business advisory services. Remember, that your journey as a business or social entrepreneur could be a lot easier when a very solid foundation backed by some professional assistance is laid. Technically, it is the start ups and small businesses that require serious business advisory services. However, be extremely careful of free advice. You could either end up being a trial version of someone's business advisory toolkit or a victim of a collapsed business as a result of bad business decisions.
As a start up or a small business, you mostly at a point in time need some financial boost for your business. Basically, you might need an investor. When ever you find your business at this stage of development, don't try to approach any investor until you know three things.
1. The worth of your business.
2. What type of investment you need and how much?
3. What is in for your investor?
We will explain these in subsequent posts.
1. Knowing The Value of Your Business
Know the worth of your business. The capital and human resource investment that has gone into your business so far, as well as how important your business is to you are very much critical information that every profit making investor will be looking out for in a potential investable business. The liquidated and fixed aseets are easy to value. However, the trouble most people go through in assessing the worth of their business is quantifying the non-physical investments made; like time commitment, intellectual capacity of staff, years of experience of working staff, etc. What most people don't know is that even if a business is at the idea stage, it has a value. Know the value of your business and don't sell yourself short to any investor.
2. Knowing the type investment you need and how much
A very unfortunate mistake that has denied very promising and potential businesses from getting investment support is their inability to examine their business and identify what kind of investment they need and how much.
There are types of investments parchages that most investors look out for and deem as profitable and convincing enoughfor them to invest. Each form of investment and amount that you think your business needs comes along with its own demands, espectations, risks and advantages. Know what type of investment you need at each level of your business, how much investment you need to start making marginal/ substantial profit, and how long a period before you can meet the demands of your investor.
Don't always think your business needs financial investment. Investment sometimes could be in the form of time committed, resources or professional expertise and advice.
Have a clear cut terms of engagement with your investor. Never take anyone's time, money or expertise for granted. Let them know what is in for them before you invite them to the dinner table.
3. What is in for your investor?
Whatever attractive package or percentage you have planned to give your investor would depend on the type of investor you are approaching and what their interests are. Impact investors care very less about the profit margin they would be getting from investing in your business. However, they are more interested in how beneficial your business will be on other people as well, the environment and your community at large. They look out for businesses with scalability to employ a lot of people, eco-friendly and highly sustainable. Most impact investors make their funds available in the form of grants and soft loans.
Profit investors on the other hand have only one goal, and that is to maximize profit. As long as your business idea gives them the opportunity to earn more on their investment for a great deal of time, then you have their attention. In this case, you can offer then either equity, profit sharing or loan proposal.
Remember, both investors have interest in profit making. Unlike profit investors who look at profit for themselves, impact investors look at profit for your business to grow and continue to benefit others in a more sustainable manner.
Know the espectation of your investor and have a realistically attractive offer for them to invest in your business idea.
When do I start a CSR?
A Corporate Social Responsibility (CSR) is a strategic socioeconomic intervention by companies to give back to the society from whose resources they depend on for profit. The idea is make room for the general society to benefit from the share of profit that you have made over a period of time. It is also a strategic marketing tool for most companies and makes them look genuine and good in the eyes of the people.
However, according to The Carolls pyramid of corporate social responsibility, it is a theoretical concept that implies that corporate social responsibility is presented by four dimensions: economic, legal, ethical, and philanthropic responsibility. Unfortunately for most companies in Ghana and Africa, CSR has been reduced to just the philanthropic aspect of it, which is the last item on the CSR pyramid.
As far as this concept is concerned, making profit in your business, taking care of your workers, operating a legal venture, paying your taxes and beign philanthropic are all part of CSR.
So, as a small business or startup, when you want to know when to start a CSR, I'll say; 'start making money and you are already doing CSR'.
Forming the right partnerships
Partnership is an essential aspect of business development. It is the single most important element that encourages the creation of inclusive economies and a functional value chain. It is more advantageous to the 21st century business / startup to engage in strategic partnerships in an era of very limited fiscal financing/investment for business. Strategic partnerships helps the business not only reduce the work load which distorts quality and efficiency, but also helps the business to share in its anticipated risks. You don't need to own/produce/manage everything that has to do with developing your product or service. Its very important to outsource certain portion of your business. In very simple terms; if you make torch lights, don't worry yourself to make batteries. Buy from people who have become the best in making batteries and give your customers the best user experience.
Scaling Up your business.
Scaling up your business simply means, increasing the supply base capacity of your business. This is done by increasing capital investments in the form of increasing accessibility(branches), labour, production quantity or quality and other elements of the supply value chain. In very simple terms, it means expansion. It might seem like a pretty simple thing to do if you have all the capital it requires. However, if scaling up is not done strategically, it could have a very detrimental effect on the sustainability of the business. People have gone out of business because they have failed to identify when it is appropriate to expand and how. As we will try to answer these two questions subsequently, it is important that we remember this; "Never force a business to grow. The key for business growth is to make turn overs. What good is a tall Mango tree to a Mango farmer if it can't bare Mango fruits"
When do I start to scale up/expand my business?
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Scaling up is neccessary for every business, but irrelivant at certain stages of a business. One can not deny the very intense desire of young entrepreneurs to see their business flourishing with branches and outlets scattered all over. However, if you fail to scale up at the right time, you might end losing some valuable investment. I will encourage every young business to look out for two strong indicators before deciding to scale up;
1. When there is an increase in sustainable demand for your product or service.
2. When there is opportunity to penetrate a market segment.
How do I scale up my business( Scale Small Concept)
Special Lense Investmentor.
Entrepreneurs solve problems. Business people only make money.
Increasing profit by reducing cost.
Developing a business requires more than just believe.
Young entrepreneurs have totally substituted traditional marketing with social media marketing. Unfortunately, it's not always the case. Traditional marketing tools like market storm still works very effectively. But the key here is to know where your customers are. Don't come on Facebook and Twitter selling hair dye. Those who use it are not any of those platforms. A good market analysis should tell you where to find your customers and how best to interact with them. If it turns out that your customers are in Makola, please put away your phone and go make some money for your business.
Understand the stages of business development, especially the first stage. Don't go focusing your energy on things that has no influence on your business. Speed comes when you have a clear direction. Stay focused...
Create your customers around your business idea, not your personality. You can't live forever, but your idea can.
Young entrepreneurs should be careful of awards, certificates, features and promotions. They are not always a good evaluation of business success. Stay in those corners, work on your craft and make financial turnovers. That is the only evaluation of business success.
Young entrepreneurs should re-codify the concept of entrepreneurship to complement desired results. Know that you are not solving problems and making money out of it, but rather making money out of a problem you are solving. Which ever way you chose to look at it shows what your interests are as a sustainable business person.
Entrepreneurs are leaners. That's a basic fact. However, the source of your business knowledge is a key contention. Being an experienced entrepreneur and business person doesn't lie in book pages. Books, give guidance and ideas. You'll find the knowledge you need to succeed at the market.
As much as possible, try to separate your business from family and friends. These are both important elements to your personal development that makes their best impact respectively and distinctively from each Treat them very separate from each other to the extend that a disappointment in one should not affect progress of the other.
Ghanaian Business grow by increasing physical structure and reducing quality product or service delivery
Every business is unique. Don't replicate someone's business model directly for your business. Understand your business setting and create a model that makes financial sense as far as your business idea is concerned.
You business idea should make both business and social sense. Don't call yourself a social entrepreneur is you don't have both at the same time
Not every Business to Customer (B to C) model requires a delivery service. Having an outlet and selling at a location has it's own advantages and opportunities for good financial returns and business sustainability.
Customer repeatability and a consistently increasing customer base are the main conduit for the financial sustainability of a business. How many new customers are you making and how many of them returned again?
Do you know that your business can slow down and there is actually nothing you should or can do but wait?
According to Eric Ries in his popular book; Lean Startup, a startup is any human organization that is committed to creating a new product or service, under conditions of extreme uncertainty. This means that, you don't know who your customers are, what they want or how to even reach them. If your new business has an already existing business model, has an identified customer segment and expectation/requirement, already existing customer channels and industry operating standards and regulations, then you're running a small business and not a startup. Know the difference between a startup and a small business because the approach to growth is different in either of them.
Contact Maazi Okoro for a copy of the book called The Lean Start by Eric Ries. I recommend this book to every entrepreneur. You can also visit the blog below and learn a thing or two.
Quality is an intrinsic value ofcourse. It is measured against the expectations of your customer. If your customers are not satisfied with your quality level, you've still not met your quality requirement no matter how hard your worked on the product or service. This also means that if you have not clearly identified who your customers are, what they want and how they want it, then you don't know what quality means yet.
Product Development (Developing products and services people don't need)
Startups and small businesses, in their quest to grow sometimes end up developing amazing products and services that people do not neccesarily need. They are able to achieve technical, transitional and sometimes solution success. But due to the lack of need or demand for the good or service, they are not able to achieve business success. The technology industry is noted for it's high uncertainties. For that matter; "the pace of technological progress can, and often does, outstrip what markets need. This means that the relevance and competitiveness of different technological approaches can change with respect to different markets over time." (Thr Innovator's Dilemma)
Pivot or Persevere (So I've done I'll I can but people don't seem to patronize my product or service.)
I get to hear this statement from a lot of young entrepreneurs and business people. To those of them who have been in operation for just a short period, I fundamentally introduce them to a concept called validated leaning. However, those business who have been operating for as long as possible and still can't boast of any customer base, I suggest two approaches to managing such crisis. You can either pivot or persevere. They are both strategies employed in such situations without changing the vision or strategic objectives of the business. To pivot means to change course with one foot anchored to the ground. In this case, strategic alterations are done to meet other potential demands of customers. You persevere when you are sure that your product or service will eventually gain customer appraisal. In this case, more energy is channeled into marketing.
Note: Which ever approach taken should be backed by a good business and product assessment against available or anticipated market demand.
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