eBusiness Weekly
Kudzai M. Mubaiwa
Last week we started five of ten things any current or aspiring small business owner must think about if they want to thrive in Zimbabwe, and stay in business should other competition in the form of external investors and/or returning residents emerge. We highlighted the issues of idea generation, an economic model, formalizing, pricing and marketing.
Here are the balance five things I believe matter:
Digital Tools for Small Business have never been more important than now. We are in a digital age and anyone who is not traceable online is as good as dead. Websites are the new company locations, and social media is the new network and marketing tool.
Mobile money has been a phenomenal success in Zimbabwe, disrupting all banking platforms, and coming in only second to hard cash as the payment preference for the majority of Zimbabweans. Artificial intelligence is permeating our operational spaces, starting with the simplest forms that are bots in applications such as WhatsApp and Facebook that are the internet to some.
Software and applications can be obtained off the streets and are increasingly popular. The business owner of today must appreciate the new customer is extremely connected and impatient. They want detailed content about products online and they will use this as a basis for comparison. WhatsApp in particular is a game changer.
No one knows the exact figure but it is estimated that at least five million Zimbabweans are on it. With the capacity to share images, videos, audios and documents, this includes more people online at a low cost and these can be customers for business.
Those who cannot build email mailing lists are now disrupting them by creating groups of like-minded people and serious transactions are done through referrals from such groups.
A business that stays abreast with digital matters will certainly avoid disruption, survive and thrive.
Financial statements and record keeping are very important for any business. How else can you know if you are making progress unless you measure it by comparing records?
Cashflow and income statements must be drawn up every accounting period and the business must invest in its’ people becoming financially savvy. Numbers do not lie. Managing cash-flow alone is one of the key responsibilities of business owners in this dynamic environment.
One can hire bookkeepers and accountants but there is still a demand to understand and interpret financial statements so as to make quality business decisions from both a qualitative and quantitative basis.
Ensure that you produce periodic financial statements annually, even if they are not audited, without fail so that you can be sure you are running a real business and not a non-profit or mere hobby.
This can be done with a small investment but will work in your favour when you want to objectively demonstrate viability to funders in the future. The businesses that will survive and thrive ensure that financial records are generated, reviewed and filed every year.
Business plans are the long white papers a business needs when it seeks to detail its’ idea and intentions and to raise capital from financiers.
A business plan must be clear to the readers and contain compelling content both from a qualitative perspective and from the quantitative.
There must be clear and logical story that speaks of the business opportunity, your objectives, your step by step plans to achieve them, your resource requirements and the people involved.
Business plans are inherently strategic, speaking to the future. They deal with known problems and known data and are created with a mind-set to plan, refine and execute.
Business plans, unlike canvases, tend to be high fidelity with a lot of detail under the usual sub sections of an executive summary, your company analysis, an industry analysis, customer analysis, competitive analysis, a marketing plan, operations plan, the management team, a financial plan and an appendix with attachments.
Little or no testing is done prior or during the preparation of a plan so everything contained in it is by desktop research and theoretical knowledge.
The quantitative aspect is also important and is usually covered under financial analysis. This contains the projected cash-flows, naturally informed by the anticipated trade volumes, in turn originating from the pricing regime utilised.
It is important to continue to review the business plan so as to survive and thrive, things change fast!
Soft skills for the business owner are an important aspect of small business. Very often you will come across a decent business with a good product and a bright future. If it is fronted by a careless owner, then its’ sustainability is under threat.
A business owner must invest in themselves so that they possess the necessary soft skills like personal grooming and etiquette, so that they are presentable and acceptable.
A small business owner must also have strong time management abilities, for indeed time is money. They must be deliberate in learning the art of negotiation and networking with people at all levels.
A business owner needs to ensure they are financially literate. All of these things are possible through training, attending events where these are taught and subsequently practicing them and refining them.
Some transactions can be sealed or lost depending on the promoter’s aptitude. Those who take soft skills seriously will certainly survive and thrive.
Capital raising is where the real deal is. Enterprises may do everything necessary in terms of planning, but it all comes down to the bottom line of funds to start up, start to keep going and funds to grow or for scaling up.
Capital expenditure is the financial requirement to get started that caters for things you pay for and use for at least twelve months and beyond such as land, buildings, machinery, equipment, technological gadgets, furniture and fittings.
Working capital is that which you use in the short term under twelve months, funding salaries, rent and utilities like power, rates, water, Wi-Fi, cleaning, marketing, travel, training, stationery, transport, telephone, office groceries and so on — the recurrent costs that add up to something meaningful to be paid monthly. Numbers are important therefore the business owner must be able to define their burn rate – the amount they will spend until they are generating cash from sales. Further, the business owner must acquaint themselves with the various ways of capital raising – other than the typical bank loan. You cannot grow and scale up operations if you are limited by the usual rhetoric of whining for “start” from banks and government. If you want your business to survive and thrive, be open to various types of capital – crowdfunding, venture capital, angel investing, family and friends, asset disposal, bootstrapping, savings, sweat equity, consignments, partnerships, and of course the “default” loans.
Take a look at the state of your enterprise in view of these ten pointers, and make the necessary changes. When applied, your small business prosperity and longevity in Zimbabwe will be guaranteed!
Feedback: Twitter @kumub, Email [email protected]
