Starting up in Business? Here are some basics
1. Don’t be afraid to fail. You are doing it for yourself and not for anybody else. Your failure is a learning experience. Pick yourself up and try again and remember all the lessons learnt.
2. Always remember cash is king. Being profitable is great but collecting cash is everything. You can profitably sell your products but if you don’t collect the cash you will go bust. Always have at least one product in your business that moves fast and is easily converted to cash. For example banks main business is loans. Lending money. Yet they charge fees. The fees provide ready cash flow while they are waiting to do the big deals. Toyota Zambia sells car parts and services cars while it waits to sell the $90,000 Prado. Whatever you are selling find your cash product. The one that will deliver cash constantly. Cash is king.
3. Be compliant. Always file all your returns, ZRA, Workmen’s, NAPSA etc and always ensure you file with a payment. ZRA penalties and fines can close you down.
4. Pay your suppliers regularly but make sure you collect your money faster than you pay out.
5. Get an education in basic financial accounting and ensure you have a proper accounting system in place.
6. Always know your Key Performance Indicators. Always make sure they are up to date. Always have 10-20 Key Performance Indictors and make sure they are up to date. Always make sure you update them daily. Always have a Daily Flash Report and always look at it. Suggested ones. Debtors List. Creditors List. Payments to be Made. Payments to be Collected. Daily Sales. Outstanding Tasks from Yesterdays Task List.
7. Pay your workers and yourself. Always make sure you and your workers are paid. You can’t be productive if you are worrying about mealie meal.
8. Make sure you have a roof over your head and your bills are paid. You can’t be a successful businessman if you are on the verge of eviction or there are no units in the electricity meter!!!!
9. Avoid dependency on one client and one source of income. Diversify your income sources and types of income.
10. Don’t be afraid to get your hands dirty or make the necessary sacrifices to get your business off the ground. If it means you don’t have DSTV and you swap your Ford Ranger for a Corrola so be it. The rewards will be greater in the future.
11. Always plan ahead. Always have a budget, action plan and a task list. Always break down everything you do into task lists. As you work your way down the lists you will find you are getting stuff done. Always make sure the last thing you do before you sleep is make sure your task list is ready for the next day. DONT DO THE TASK LIST IN THE MORNING YOU ARE WASTING TIME YOU SHOULD HAVE PLANNED AHEAD
12. Get all the support you can get. Make sure your wife, you mum, your Dad, you kids everybody are behind you. If you are religious pray hard. Make sure your mind is clear and your support network is with you.
13. Be careful with big deals and bribes. Many a businessman or woman has found that after a lot of sweat and effort the K5 Million contract they got was a total loss and the middlemen and procurement guys made more money than they did. No matter how big a deal if it does not make money walk away. Same goes for bribes, commissions etc. If the middleman is making more money than you walk away. Before anyone protests, payoff, kickbacks, bribes etc are a reality in Zambian business. Regrettably.
14. Fix your love life. Starting a new business is not the time for drama. If you are married fire the side chick or Ben10. Stability at home is crucial for your business.
15. Don’t be afraid to fire people. Even if he is your best friend or your wife or your Ben10, if they are not making you money or are incompetent, fire them. And please don’t sleep with the help. It’s the quickest way to go bust.
16. Hire Professionals. Always have the best lawyers, accountants, architects etc you can afford or convince to work for you. Never fall into the trap of thinking you know it all.
There you have it. That is my personal experience from working in and running my own startups. Just remember business is not a picnic and 80% of all businesses fail and fail within the first two years of existence. Remembering these 16 tips will help you be among the 20% that dont.
By Brian Mulenga