We all agree, the number one challenge of most small businesses is not lack of capital. It is lack of customers or market.
If your business lacks customers, it will suffer from a cash flow problem which is critical for survival. At the start, don’t be driven by profits. That should come as a natural expansion of business success. It does not matter how much loan capacity (capital) you have, if you don’t have customers, your capital will still not be enough. So, focus on revenue growth. Make more money and spend it on the critical business processes – customer acquisition, retention and relationship management. All other things will be great if you get the customer part of it right.
At worst, focus on breaking even – a point at which you make neither profit nor loss. Your objective is to be sustainable. When you keep in the business for long, you create a huge asset called Goodwill. Unfortunately, it is intangible – you cannot see it. That is why a few entrepreneurs do recognize it.
A case in point. Mid – 2006, Joseph Matanda, (not real name) received a special call which he had been expecting for long. It was from one of the ‘’big 4’’ audit firms. He had made the cut and it was a communication of a job offer as Auditor 3. He had applied for senior consulting position. But he couldn’t go into consulting yet. His education background was from very remote village schools.
The ‘’big 4’’ audit firms always preferred recruiting people who had gone through reputable traditional schools, especially the missionary founded ones. These firms assumed that three things were assured:
A strong family background, in which case their parents were likely to be well – connected to facilitate consulting deals for the firm.
Brilliant enough to make it to such schools
Both the above
After repeated attempts, he finally made it.
The story of how he got there will be for another day.
After a few months as an Auditor 3, he finally got an opportunity and crossed over to the consulting section. That is where his heart was.
He reported the supervisor; - a tall man with slightly bent back (he later got to learn that he loved golf so much that it was responsible for his slightly bent posture). In the first week, the supervisor gave this aspiring man a bid document and asked him to write a proposal. He did not give any tools – no computer, no sample proposal and no guidance whatsoever. He was to figure it out all by himself. The proposal was due in a week’s time.
If you have ever been involved in proposal writing, you know tiresome it can be. Lots of thinking is needed. In audit firms, each staff (consultant) is given a laptop and it becomes like a personal property. Joseph tried to ask his colleagues to assist him with their laptop so that he could do research and write the proposal but unsuccessfully. In the meantime, he processes the documents usually required for bidding – tax clearance, company registration and quality control certificates. A day to the deadline, the supervisor called him to his office for an update on the bid proposal documentation. Joseph told him: ‘’I don’t have a laptop. I am yet to start writing the proposal.’’
If you were with Joseph in that room, you would have seen the sudden change in supervisor’s voice.
Appearing very surprised, he stood up and looked at him from above and said: ‘’did I hire to type or to give me ideas?’’ ‘’did you come here to typeset for us?’’ No sir said Joseph. ‘’so, where is my proposal? You have a day to the deadline. My experience is the proposal should be ready and printed two days before the deadline so that any mistake is ironed out.’’
Technical people complain about lack of resources. Business people find a solution around the problem,’’ he said. ‘’if you were a business person, you would have gotten a piece of paper, written the proposal and given it to my secretary to type. What you write reflects your original thinking. If it is good and it warrants a laptop, I will surely give you one. But we don’t hire people to typeset here. We hire them for great ideas.’’
Are you a technical person? If you complain about constraints, then probably you are.
To succeed in business, you need to focus on overcoming constraints. Allocating more resources to marketing and customer retention throughout your business life cycle will be by far the best decision you make.
SOURCE: SUMMIT BUSINESS.NET/ VOL. 07 ISSUE 13 April 2015.