Why are they ?dying? young?
My motto throughout this year is going to be Test Fast, Fail Fast and Adjust Fast. Well that is a quote I got from somebody and by the time I was writing this I could not remember who. Now the failure part is the most troubling aspect in life. Am talking about startup and small businesses here, and the question is why are they failing fast and even those which survive do stagnate at a certain point. I came across a stat stating that 90% of small businesses and startups collapse within the first two years of the operation. I went down the memory lane to find out the reasons why and I could only master five:
Operating without business Plan
Writing a business plan is a tedious task, actually most of very established businesses you see around are operated without any plan at all. I did a spot check on the small businesses towards the end of last year and the most shocking thing a found out is the fact that the owners did not see the need of having any plan at all.
The thing with business plan, it requires extensive research. When come to research in Kenya nobody is willing to do it. The people themselves are not research friendly. I mean, how many times have you stopped to answer questions from a regular guy carrying a note book trying to find out your feelings, opinion, thoughts about a certain product, topic, industry. The only time we are excited about this is when the media people are involved, when you know that you will appear on TV or Radio. This culture of intolerance to research extends to the corporate world, when you approach executives of the companies, the secretaries will never allow you in, and even if you go past the gate, the big guy might still have no time for you. Now tell me how do expect businesses to grow in Kenya under such atmosphere?
The greatest sin one would commit in the world of business is to wake up and think they can do business without planning. This is the very reason why 90 percent of businesses fail in their first 2 years of operation. You might have seen a lesser person being successful in doing certain business, and you are thinking if he can do it I would do it better. Let us not deny the idea that you can do it better, but the fact remains, things are not always black and white. To start with some businesses are run as a cover-up for a bigger operation on the background which might be purely legal or sometimes illegal.
Being Part of Bandwagon
It is not good to be left behind; it is good to be in the right place at the right time. But before you do that take a minute and think if it is what you want to do. The most successful people in the business world are people who do what they love doing most. When you do what you love doing most, it translates to unparalleled passion for the work. When you hear that so and so is workaholic you think mmmh that is their nature. The only thing i can say about this is that i think you are dead wrong, it is not their nature, they are doing what they love doing most and they have passion for it. Most of the time you will be asked what is your hobbies and interest and surprisingly you always have it at your finger tips, but you have never stopped on your track and think that you can make money out of your hobbies and interest. We go wrong in most cases because we want to do what others are doing, we want to be part of bandwagon. You want to invest in stock market because your neighbor is doing it, you want to start a shop because your friend has one, you want to be in food industry because your former classmate is successful there.
If we are honest most of us will confess that we are big victims of this. Not keeping records when running a business is inviting failure knowingly. So when writing the business plan, come up with the projections, the startup cost, the sales projections, the expenditure, the ratios, balance sheet. But when you start off write down every single dollar you spent, the actual sales and all other financial aspect of the business. Other records ignored are the withdrawals, as the owner most of the time you convince yourself that the reason you are doing it is because of yourself. So you withdraw and withdraw, yes do it but remember to record it down. At one time you might see the bigger picture and the very record will tell you exactly where you had gone wrong. Also remember to keep the employees records, performance, and payroll information
Ignoring the Technology
Young people have embraced the technology to the level not seen before. Unfortunately most businesses are run by the old guards, even those run by young people there are still big grey beards on the background. To them getting a website for the business is a waste of money, using sms marketing is complete stupidity, buying a new laptop is a show off venture we can do without, buying the latest payroll is system is a joke of the century. Now the same people are willing to put a newspaper advert costing ksh.40,000 a day but will not consider using the same amount to do a website.
Talking about websites, Kenyans have not grasp the need for a good interactive websites. You will be shocked if you look at the websites of most organization even those considered as the top of the cream. They have nothing worth noting, not even the prices of their products or services. I tried to get the prices of Nakumatt products from their site and I was shocked, the only listed prices are the goods on offer. From there I wanted to read the news online of the People Daily, Kenya Times, and Nairobi Star. Yeah some have their websites under construction for the last one year, some have their last news posting on July of the year of our Lord 2008. That should tell you where we stand in terms of technology and unless the mindset is changed the Kenyan businesses will not be able to compete beyond our borders.
Lack of strategy
Most businesses operate without any strategy, no future direction, no known path to the final destination. While those which have, the owners keep their marketing strategy and growth plans in their heads. They get easily distracted, in turn the result may never happen or if they do, they take much too longer to attain. .I think there are others but am blank at this point. Add your comments or reasons?.