5 REASONS OF MOST BUSINESS IN AFRICA NOT TO SURVIVE
1:Succession Planning:
Human being is in characterized by death and misfortunes while business may live forever theoretical.In Africa societies most of us we dont think much on death, misfortune or permanent disabilities as far as on business theory is concern. Death, misfortune, and accidents never give advance warnings. There’s
an intrinsic risk in every young business that it could cease to exist
if the brain behind it suddenly disappears (probably due to death or
illness) or is no longer available for some reason to nurture, drive and
grow the business.
The best time to find a successor with the right level of commitment,
vision and zeal to lead a business beyond the lifetime of the founder
isn’t when the founder retires or is on his/her deathbed.Finding the right successor to take the reins of a business is a conscious, deliberate and calculated process (or decision) that should not be left to chance, or emergency situations. Actually, the earlier the process of succession planning is started in the life of a business, the better.
Once you have identified the likely candidate(s), it’s important to get them more involved in the business and groom them for leadership. They need to understand the nuts and bolts of the business and share a strong interest and passion in growing it into a bigger and better organisation.
If you identify any skills or knowledge they may be missing, invest in their learning and training. Formal education, short courses, mentorship, coaching and exposure are critical to the nurture and grooming of successors.
Most of business start at small scale, and grow as time goes,but in African business many business remained as it is and the main reason behind is that founders think small. Small thinking undermines the possibilities and potential
of many businesses in Africa. If only we knew how truly big some of our
local products and services could truly become, most African founders
would test the limits of their vision and challenge themselves more.By thinking big, the possible lifespan of your business automatically
increases. Growth and expansion is an objective that could take several
generations to accomplish, and embracing this fact can eliminate
shortsightedness and increase your horizon of possibilities. Example Coca-cola drink initial started as morphine medicine and cure for headache,but it was later developed and become international brand till today due to big thinking that lead to innovation of the product.
3.Lack of structure and business systems
One key trait of successful businesses, especially those that have
existed through several generations, is the existence of a clear
structure and business systems that help the business to operate
effectively.
Structure is essential to every well-run business because it provides order, assigns responsibilities for key activities and improves accountability. Many African businesses cannot function independently of the founder.
For example, if they’re out of town for any reason, or unavailable to sign cheques, suppliers and employees may not get paid on time. If he/she doesn’t OK a deal, it’s likely to fall through. His/her involvement in the business is often so central and too personal that it gets in the way of everything.
Business systems are also very important. How many medium-sized businesses on the continent actually have policies and procedures that govern everything from recruitment, employee conduct, finance and accounting, among others?
How many businesses actually keep accurate and up-to-date records of their activities, including complete information about operations, finances, transactions, customers, suppliers, employees and everything else?
It’s not surprising then that the most critical information and records concerning most businesses are housed in the heads of their founders. They seem to be the only ones who know where everything should be and how the business should run.
With this kind of ‘chaos’, it’s almost impossible to carry on a business when the almighty founder is unavailable.
4.
Adapt or die!
Many businesses seem to think that they’ve found a formula for success that will remain effective for a thousand years.
Big lie.
Entrepreneurs are often too focused on running their businesses that they don’t take the time to look into the distance to think, strategies or identify current and future threats or risks that could significantly affect their business, or worse still, kick them out of business.
In today’s globalized and interconnected world, one disruptive idea or business in a faraway country can totally change the landscape of your industry or market so fast you may never find the time to think or plan.
Looking into the future, changes and trends in both the local and international market place will be one of the biggest risks that African entrepreneurs and businesses are likely to face. With a growing number of foreign businesses and brands increasing their footprint in Africa, even small family-owned corner shops and neighborhood businesses may not be spared.
To survive in these times of rapid change, entrepreneurs need to be open-minded and must not take everything for granted. Unlike a few decades ago, no business is too big to fail these days. One little unknown startup could have your business for lunch if you’re not prepared to adapt.
Among several others, Über is one example of a foreign disruptive idea/business that is changing the landscape of business across Africa – urban transport, in this case.
My advice: stay in the know about developments in your market and industry, both locally and globally. Seek out innovative ways and technologies to make your business run more efficiently; make your products and services more valuable; keep your employees committed and effective; and improve the satisfaction of your customers.
In today’s internet-obsessed world, it’s cheaper and easier to find the information you need. You just need to know where to look, and how to find it.
5.A dominant ‘lifestyle’ mentality
Dominant lifestyle mentality does two dangerous things to the longevity of a business.
The first is distraction. The funds you’re using to shore up your lifestyle can actually be dedicated to improving and expanding the business into a much bigger success. Those funds could also be used for strategic investments that diversify or consolidate the business, making it stronger and more resilient. So, using proceeds from the business to celebrate your ‘success’ is really a sign of small thinking.
The second is you’re sending the wrong signals to your employees and potential successors. People are watching. If you treat the business like an ATM, it’s going to be really hard for anybody else to manage the business with diligence and prudence.
If we see a business as an asset that should be nurtured and expanded beyond our lifetime, maybe we wouldn’t do our best to suck the life out of it, or just see it as a tool to serve our lifestyle interests.
Structure is essential to every well-run business because it provides order, assigns responsibilities for key activities and improves accountability. Many African businesses cannot function independently of the founder.
For example, if they’re out of town for any reason, or unavailable to sign cheques, suppliers and employees may not get paid on time. If he/she doesn’t OK a deal, it’s likely to fall through. His/her involvement in the business is often so central and too personal that it gets in the way of everything.
Business systems are also very important. How many medium-sized businesses on the continent actually have policies and procedures that govern everything from recruitment, employee conduct, finance and accounting, among others?
How many businesses actually keep accurate and up-to-date records of their activities, including complete information about operations, finances, transactions, customers, suppliers, employees and everything else?
It’s not surprising then that the most critical information and records concerning most businesses are housed in the heads of their founders. They seem to be the only ones who know where everything should be and how the business should run.
With this kind of ‘chaos’, it’s almost impossible to carry on a business when the almighty founder is unavailable.
4.
Blind to business trends and changes
Another strong feature of businesses that last beyond a generation is their ability to adapt. In a world of constantly changing markets, consumer trends, socio-political influences and outright disruption, adaptation is a key strength of businesses that will survive today and in the future.Adapt or die!
Many businesses seem to think that they’ve found a formula for success that will remain effective for a thousand years.
Big lie.
Entrepreneurs are often too focused on running their businesses that they don’t take the time to look into the distance to think, strategies or identify current and future threats or risks that could significantly affect their business, or worse still, kick them out of business.
In today’s globalized and interconnected world, one disruptive idea or business in a faraway country can totally change the landscape of your industry or market so fast you may never find the time to think or plan.
Looking into the future, changes and trends in both the local and international market place will be one of the biggest risks that African entrepreneurs and businesses are likely to face. With a growing number of foreign businesses and brands increasing their footprint in Africa, even small family-owned corner shops and neighborhood businesses may not be spared.
To survive in these times of rapid change, entrepreneurs need to be open-minded and must not take everything for granted. Unlike a few decades ago, no business is too big to fail these days. One little unknown startup could have your business for lunch if you’re not prepared to adapt.
Among several others, Über is one example of a foreign disruptive idea/business that is changing the landscape of business across Africa – urban transport, in this case.
My advice: stay in the know about developments in your market and industry, both locally and globally. Seek out innovative ways and technologies to make your business run more efficiently; make your products and services more valuable; keep your employees committed and effective; and improve the satisfaction of your customers.
In today’s internet-obsessed world, it’s cheaper and easier to find the information you need. You just need to know where to look, and how to find it.
5.A dominant ‘lifestyle’ mentality
Dominant lifestyle mentality does two dangerous things to the longevity of a business.
The first is distraction. The funds you’re using to shore up your lifestyle can actually be dedicated to improving and expanding the business into a much bigger success. Those funds could also be used for strategic investments that diversify or consolidate the business, making it stronger and more resilient. So, using proceeds from the business to celebrate your ‘success’ is really a sign of small thinking.
The second is you’re sending the wrong signals to your employees and potential successors. People are watching. If you treat the business like an ATM, it’s going to be really hard for anybody else to manage the business with diligence and prudence.
If we see a business as an asset that should be nurtured and expanded beyond our lifetime, maybe we wouldn’t do our best to suck the life out of it, or just see it as a tool to serve our lifestyle interests.
Our continent has several unique products that have the potential to become global brands and build international corporations. While they could become global brands all the same with or without African entrepreneurs, it would be great if we can pull this off ourselves.
Do you think there are other reasons African businesses aren’t surviving beyond the founders’ generation?
Let’s go, Africa!
Article is by John-Paul Iwuoha is an author, impact entrepreneur, business strategist and founder of Smallstarter Africa.
Click the course banner below or click here to get started with the course.
No comments