Overcoming the growth challenges I faced early in business

Every business has its teething problems, and these established entrepreneurs had their fair share. We find out how they solved some of the most common challenges you are also likely to encounter in your business journey.

1. Maintaining sales and loyalty from customers

Mohan Singh Panesar of Panesar Furniture.

My father used to say that a business is like a son who will always feed you later on in life. Take care of the son now and never take away from him so he can keep feeding you. That means delivering what you promised a customer. Never take advantage of other people. Our clients are our best marketers. When you produce something good for a client and you see the look on their face, that keeps us going. Second, the motivation to continue comes from knowing that we are feeding over 500 people by employing over 100 people, some who have been with us for 40 years.

But you also have to manage your cash flows… First, don’t heamorrhage cash out of the business. Unfortunately, youngsters want to become rich instantly. They hope to start a business and become rich overnight. I am still driving a 14-year-old car and I’m not about to change it any time soon.

My business almost didn’t make it… In 1974, the business almost declared bankruptcy due to wrong investment decisions. But we overcame the hurdle. The real test came in June 1982 when the workshop in Bamburi Road, Industrial Area, caught fire, destroying all we had painfully built. My father told us to decide if we wanted the business model to continue. “Woodwork needs commitment,” he told us. In the midst of the 1982 attempted coup, we started all over again. We had nothing, not even a needle. People were quite good and gave us some materials to start with all over again. We had to sell all personal cars and use a small Datsun 1200 pickup. I inherited nothing, only what I built for myself. Restarting the business all over again after the fire was the hardest decision I had to make. It was a leap of faith.

2. The physical address fail

Dr Joyce Gikunda, founder of Lintons Beauty World

In the beauty industry, like many other businesses, location matters. You may open a shop in a place where it may not pick up and you have to shut it down. The best decision I ever made was making it my task to scout for prime spots for the business. Placing the shops strategically I believe is one of the reasons I am still in business doing great business.

A friend once told me to focus on what I can do right, then do it over and over. And in tough times, have faith that it will all work out. For us, we had to introduce pay cuts, and even let some people go. But you cannot afford to give up. Talk to others and hear how people are managing and coping. Do not aspire for huge profits but endeavour to see your staff well catered for.

3. The long wait to breaking even

Phillippe Bresson of Insignia Productions

 My wait for financial stability was long, and only two years ago did I start to feel like we had a bit of financial freedom. As a production company working with bigger companies, one has to have the ability to fund their own content because the big companies don’t give a down-payment. Big companies want to work with companies, or individuals, who are stable and able to stand on their own, at least financially. I have been paying salaries for over 10 years, to the tune of over Sh500,000 a month. My business partner and I have sometimes had to go without a salary for weeks just to make sure that the employees are catered for. I don’t regret the journey though.

 I greatest lesson this journey has taught me is that you should treat your clients right. With time, fortunes change and the people who were at the very bottom rise to the top, and vice versa. I have met horrible clients, some who even bully me, but I keep my cool and deliver my best. The quality I deliver eventually endears them to me. Don’t burn bridges. You will need them again.

  4. Difficulty getting investors on board

 Mark Mwangi, founder of Amitruck

Before I secured funding from Greentec Capital Partners, a German company that invests in African startups, accessing solutions for working capital had been very difficult. And it is rather costly to get funding in this market. This greatly limited our growth.  To secure the funds, we went through the process of identifying who would be of interest to us and who would be interested in us and interested in investing in us. Once we did that we then went through another process of introducing ourselves to them. It took a great many phone calls. We explained the work we do, how it works and eventually, managed to secure funding.

If you want to secure investors, do your homework and gather the information about who is relevant and active in your start-up area or business. I’d recommend a database such as gumroad.com which captures about 400 investors in the past year who have been active in this region. Put on a brave face and expect a lot of rejection and a lot of hard work, and have a clear idea on why your business is worth the problem you’re solving and how you are going to spend the money from the funding.

5. The motivation to take the leap from employment into business

John Gitau, the founder of Rift Valley Institute of Business Studies (RVIBS)

Being an entrepreneur is like being an artist. If you do what you love you will experience lots of satisfaction. I have great love for the education of the youth. That love gives me the energy and hope for a better day despite Covid-19 pandemic hampering the business. So you think you want to get into the murky world of business? This is an opportune moment to sit back and reflect on your calling. You could be having many great ideas but I would urge you to focus on where your heart truly is. Crystallise the idea to actionable points. Believe in your ability to action. Also, start small. Many people make the mistake of starting too big and with huge loans which cripple them. Start a small business that is scalable, an example is, if you desire to run a primary school, start with early childhood education to say Grade Two level.  Then progressively increase the classes each year. Lastly, as an entrepreneur you have to learn to manage your time well. God gave all of us 24 hours each day. How you utilise your every hour will determine your success.

   It is noble to fail attempting to do something than to fail doing nothing. It was discouraging for me too with each setback experienced along the process but I soldiered on. To those setting off on an investment journey, it pays to study the market to see if the investment is viable or worth it. You should want to address a need or offer services by stepping in to fill a gap in a market segment rather than try to be a market disruptor by introducing what may not sell.

6. Start-up capital challenge 

Joyce Mbaya, founder of Zydii, an online learning and teaching platform

Lack of capital is one of the major hurdles I had to jump. No one will pay you for just an idea or a vision you have, so I had to start small. In fact, it took me a year before I finally launched Zydii because I did not have cash to expedite the process of creating a platform. I was doing it in phases due to availability of finances. Secondly, as a startup I had to find a lean management team depending hugely on individuals who had some experience because I did not have the cash to employ people rich in experience. Third, as a woman, you have to strike a balance particularly when you have children who depend on you — most of the time this is a sacrifice you must make.

I would advise that you don’t start a business with a friend or a family member you can’t treat professionally. If you can separate your business from your friends, then you are moving in the right direction. I have also learnt the wisdom behind not getting attached to what you think is the best solution. With this in mind, you will approach each challenge with an open mind and you will be amazed at how many options you have to solve that problem.

 SIDEBAR

HIGHLIGHT/ GLANCE

 How does one know it is time to QUIT the business?

Before shutting down a business, one should consider whether the time for that idea has come to an end. If the business idea is not feasible within the current or future context of the industry, then the business should close down. Also of consideration is the mounting debt in the business in comparison to revenue. If the revenue is insignificant and the debts keep growing, then the business should be shut down for a re-strategy.

Ronald Bwosi, Ronalds LLP; an auditing and advisory firm

enterprise@standardmedia.co.ke