PURSUING ENTREPRENEURIAL SUCCESS IN 2014
After the Christmas and New Year festivities, many business owners have returned to base to face the uncertainties of the new year. For many, 2013 was a tough year, and most therefore will wish that 2014 will be a much better year. Entrepreneurial success any where is affected by what I call Extrinsic and Intrinsic factors. The extrinsic factors determine what we generally call the operating environment . And these factors are largely created by the governments at the three tiers of Government, with the federal government being the major contributor to determining these factors.
Usually these policies, programs and projects are captured through the annual budgets, hence most entrepreneurs wait with a lot of anxiety, the passage of the annual budgets. And when they come late as they will this year, the level of apprehension escalates. What is more, most entrepreneurs will have little or no hand in determining these policies, except, if they belong to the business membership organisations like MAN, NECA, NACCIMA, ANCCIMA,NESG, NASME,NASSI,NACC,etc. These bodies try to influence government policies through the submission of memoranda and the holding of dialogue sessions like the annual Nigerian Economic Summit(NES). The Jury is still out as to how successful these efforts have been in influencing policies. But my experience is that much has been achieved.
But the truth is that good government economic policies or good operating environment will not automatically guarantee success to every enterprise, just as it is true that poor government policies or bad operating environment will not necessarily result in poor business performance or business failure. There is something or certain actions which entrepreneurs take that significantly enhance their success, irrespective of the state of the external operating environment. When these actions are ignored or missed out, the ability of the business to succeed is diminished, more so if the the external operating environment is challenging. These intrinsic factors,to my mind determine to a larger extent the success or failure of any business endeavour. And any Business owner who wants to succeed this year, better than last year,irrespective of what awaits in the external environment, will be better advised to consider adopting the following paradigm
START WITH THE END IN MIND
You need to begin by envisioning how you want to end 2014. If the picture or experience of how 2013 ended is not good or not good enough, then you will need to create in your mind and thought what you want to see, feel or experience at the end of the year. Do not just hope you will see something good or experience something good. You must paint the picture in your minds eye, then transfer it unto a canvass or transmit into written words. If you have staff, you must let them see or experience this future you are seeing today. And then take deliberate actions to convince them and everybody around you, especially those connected to your Business that the future you have painted is feasible and achievable.Some may call this dreaming. So what is wrong with dreaming?. But this kind of dreaming happens with your eyes wide open. It is called VISIONING. Every entrepreneur who desires to succeed this year or to do better than last year, must begin with creating a Vision for his business in 2014. Where do you want to be? No wind can blow in the favour of a ship that has no destination.
DEVELOP A BUDGET
Many business owners especially the micro and small, operate every year without a written budget. At best, many operate on a mental budget written in their heads or hearts. Ask them what they plan to achieve this year and they will return blank. And those who venture to mention a figure or indicate an objective will return blank,when you ask them how they plan to achieve their target. No goals, no targets,and no plans! A critical key success factor for business success is that you have determined the strategy that will lead you to your vision. First is that you must determine your sales or income target for the year. Then determine how much you will need to spend to achieve that sales value. Then from that you can determine what will be your profit for the year. Thereafter, you can determine how much cash will be required to meet all of your expenses: raw materials or finished goods, cost of labour, cost of selling, administrative costs and tax. And how much cash will be generated from sales and determine if there is any gap and plan how that gap will be covered - through borrowing or overdraft or through new cash injection or through supplier credit. The full annual budget is then broken down into Quarters, months, weeks and days. Therefore every entrepreneur must know his daily sales expectation and weekly expectation and so forth. This way, you can control things and monitor your progress, minimising surprises.
The process of budget development is called PLANNING. No enterprise will grow big and remain big without planning. It is during planning that potential problems or difficulties can be identified and preventive or remedial actions can be taken,even before such problems occur. Doing business by trial and error and/or just hoping(including only praying),may not yield any sustainable success. Prayers are better answered when they are specific and when action backs faith.
Importantly, stick to your budget. When you have painstakingly developed a written budget,it is important that you follow the budget. Writing a budget and abandoning it and doing just what you like because it is your business, is akin to a Pilot drawing up a flight plan that will take him from Lagos to Abuja, files it with the Airspace Management Agency and then takes off and decides to ignore the plan and just fly any how. The fate of such a Pilot, his plane and passengers can be quite predictable. And there is bound to be collateral damage to other air space users. This is one reason, businesses perform poorly or even fail, sometimes dragging other businesses along.
UP GRADE YOUR SKILLS AND THOSE OF YOUR STAFF
Very often, entrepreneurs spend huge sums of money acquiring machines, offices and other working tools, but pay scant attention to upgrading the skills and expertise of the human resources that will man these equipment or run the offices. Indeed many SMEs think it is waste of resources to train their staff or themselves. Infact many can not 'afford' to 'lose' valuable business time by allowing staff to go to training. And if you attended one last year or two years ago, why waste time with another training this year!. This kind of thinking is outmoded and is a recipe for business stagnation. If makers of automobiles present new models every year with upgraded features or makers of soft ware produce regular up grades of their software, I am wondering why business owners will think upgrading their skills and those of their staff is a luxury they can not afford. Let it be known that the concept of garbage in,garbage out applies to human capital as well and that the only enterprises that will grow and flourish in these times are those termed learning organisations.
ADOPT THE MARKETING CONCEPT
Many SMEs that struggle are often the same ones that spend little on Marketing. Many Small Companies do not have a full understanding of the centrality of marketing in driving business success. This to my mind is a major reason many small companies are underperforming, sweating so much and getting little for all the effort. In 2014, I counsel all companies that wish to have outstanding success to be market-centric or market-focused. And in saying so, it is important that we understand that marketing is not synonymous with advertising and also,it not usually as expensive as many erroneously conclude.
Marketing is a paradigm in enterprise management. You can say it is a way of thinking. Companies that adopt the marketing paradigm or concept put their whole Focus on the customer. They seek to understand what the consumer wants, they supply what the customer wants or something better, they place it where the customer can most easily reach it at a price the consumer will be happy to pay and then make every effort to keep the customer informed and persuaded that they have what the customer said he wanted. That's what marketing is all about and companies that think the customer from product concept and design to product consumption and even post consumption( repeat purchase), are the ones that will have roaring success in 2014, whether the budget favours them or not.
Mazi Sam Ohuabunwa ofr