What they don’t tell you about business in class but you need to know-part 1
When I started business I knew it was going to be a tough journey and for a while I was not fully into it. My mentor at the time kept telling me, “you need to dive into the deep sea and swim with the sharks”. Part of me was so scared with the questions that every new business owner has. Will I make it? What if the business fails? Where will clients come from? How long will it take before I am stable? Then there is self-doubt, you begin to feel inadequate especially if you are in a consultancy business like me. Eventually as I began to gain a few clients I finally made up my mind and dived into the deep sea. I was ready to try and fail rather than fail to try. There are a few things I wish I knew or someone had mentioned that I should be ready for.
Introducing yourself to the market.
This so far was my biggest challenge and I believe it is for new business owners. Statistics say 90% of small businesses fail and 90% of franchises succeed. If you go to a new deserted island and you find two restaurants. One that is Java House and another that is equally good but you don’t know and you have to choose one, most people will choose Java, myself included. That is why franchises succeed and small businesses fail. People respect brands and are more inclined to what is familiar. This is a battle any new business owner will face and must be ready to fight. When you are introducing yourself, the market will not immediately be receptive. I have gone to meet clients and they almost always ask. “Who are you? Who else have you worked for? How many years have you been doing this?” all those questions is simply clients wanting to know why they should trust you and not established brands that they know.
In my experience confidence has always worked for me. You cannot afford to stammer and look incompetent in such situations. You must believe in yourself and your brand so much that you can sell it to Warren Buffet.
Knowing your value.
After getting the chance, then comes another question, how much do you charge? What is your value? How do you do you’re pricing? I struggled a bit when it comes to pricing. When you are starting more often than not you are likely to undercharge. It does not help that you are desperate and trying to build a clientele so you are likely to undercharge in the hope of trying to grow yourself up. This may work for you but it may also work against you. If your nature of business is one that needs referrals, your first client will refer you to a friend with the same price and it’s a continuous cycle. It becomes hard to grow out of the low price levels.
In my opinion, decide your price points very early in the business and don’t undercharge in the name of trying to grow. There are people who can buy a cup of tea at KS 1,000 and others can only buy that same cup of tea at KS 10 bob. Choose your target market early and grow it.
To get a partner or not? When I was starting out I had partnerships not one but two. In both cases they failed terribly. The first one I was even scorned money. I can’t count how many partnerships I have seen dissolve even with my clients and if they are not dissolved it’s a real struggle. That much said I am not discouraging partnerships but I am against partnerships that have no corporate governance. When people are starting they have all the right motives, they are so excited about the new venture that they don’t sit to discuss possibilities or various scenarios that may interfere or break the partnerships altogether.
Before joining a partnership, invest time in building structures. Ask each other the toughest questions. For example, “Who does what? What if one party brings more money that the other? How shall remuneration be done? How shall signatories in the bank be? In case of dissolver ship how what process shall be used? When I was dissolving mine my partner came and told me I owed him money since the Articles of Association stipulated that directors be paid equally and for a while that had not been our remuneration plan. I had never taken time to read what the Articles of Association and it was in my house the whole time. You can imagine my shock when I was told I owed them money. This was a battle that I could have lost even in court, so I had to pay. I still believe in partnerships but I know better. Before joining one you might want to take time and invest on structures and corporate governance.
For those that don’t start with partners and decide to go solo your biggest challenge will be differentiating yourself from the business. When you are starting a business alone you and the business are the same person. You are your brand are the same person. When clients think of your business they think of you. This is an expensive mistake. When you begin to grow and have employees most of your clients will resist them. If you have a beautician or kinyozi whom you go to, imagine them delegating you to their assistant. If you are like me you will decline. That’s the same scenario. To date there are clients who if I am not there they don’t believe work has been done. I have sometimes gone to a clients and just showed face while my colleagues are doing all the work just so that the client can believe work has been done. It can get that bad.
I have had to get comfortable with losing some clients who expects me to do all the work. You will never grow if you are doing all the work. My advice, as soon as you can afford an extra person carry them to all the meeting. The more people the better. Your clients must know it’s a teamwork effort and not a one man’s show. That way when you don’t show up and your employees do, they are confident.
Entrepreneurship is a journey of the resilient. You must be ready to take challenges for breakfast. It not only changes your pockets but you as a person. It’s such a fulfilling journey but only of you don’t give up.