Blood, sweat and tears: Behind the pain of growing a business empire

Worried businessman at office [File]

Entrepreneurs attract all the praise and admiration when their ventures eventually succeed. They equally face harsh criticism and sometimes blame when their ideas fail.

The more discussed category, as it is in many other fields, is the successful one.

While their achievements are broadcast for all to appreciate, little is said about the rigours of making a business successful.

Sweat capital

Nelson Mandela, founder and CEO of fashion and clothing line, Logical Solutions, says that while money is the most discussed form of capital, it is not the most necessary when starting a business. Sweat capital — famously known as sweat equity — is.

Sweat capital is described as a person’s, or company’s, non-monetary contribution towards a business venture or any other project. It comes in the form of physical labour, mental effort and time invested in the business.

“It all begins with an idea. The willingness to conceptualise the idea is the most important asset one should have when starting a business. It is quite expensive — more expensive than any monetary input,” says Mandela.

Sweat equity, in his view, is time-consuming and tests an entrepreneurs’ resilience. Mandela calls sweat equity the fulcrum of a business.

Business registration

Another pain point for entrepreneurs is the registration of a business. Stories of the often long procedure, which is characterised by uncertainty — and which is usually expensive — discourage many potential entrepreneurs.

“The registration depends on a potential businessman’s exposure. Knowing what papers are needed in the registration of what business, understanding the offices to approach for what, and knowing where to access the information are key,” he says.

How well that information is made available by the relevant authorities determines how easily entrepreneurs can set up shop.

Mandela says that for a business idea to translate into a viable venture, it must be seen to be solving a problem in society.

Making a profit

For people to pay for it (one of the main reasons for starting a business is to make a profit) they have to be convinced there is a service they needed which is now offered by the entrepreneur through the business.

But even as Mandela insists on sweat capital, he quickly adds that money should not be overlooked in the discussion, calling it “the motivator of everything”.

“No one will think straight when broke,” he says. “You need to have the money, although, in spite of how much of this you have, you will still not run a successful business if you lack the drive.”

Accounting headache

Ivynne Okoth is the founder of Kairo Ltd, an online business that deals in fashion, furniture and home décor. Although her company, which she started soon after graduating from the university, has been doing just fine, she has learned a lot along the way, often regretting some decisions she has made.

One of them was an accounting gaffe.

“I have spent far more over the past one-and-a-half years making amends for my own bad accounting in the total three years’ life of the business. I would not have been in this situation had I hired an accountant from the start. Entrepreneurs should always factor in an accountant into their budgets,” she told Enterprise.

Ivynne also says that the if-one-builds-a-business-customers-will-come belief is a lie.

Marketing

“Marketing isn’t easy.”

“Don’t develop the product or service yet. Sell first. Get clients first and then figure it out after. Most people spend way too much time and money building their apps or websites and never even talk to customers,” she says.

Talking to people allows one to validate, source for funds and learn, or fail, quickly without wasting as much time and money.

Every business is different but almost all ideas can be tested without first building anything. Furthermore, trends change all the time and a business that has been thought up could easily go down the drain due to a change in trends, or the business environment.

Making sure that business legalities such as registration and taxes are taken care of is also another key area a business should pursue.

“You likely won’t even look into the exact details until things go south. Often times it’s already too late,” the entrepreneur says.

Failure to honour tax obligations could kill a business, she warns.

Managing expectations

Ivynne also says that she has had problems managing her expectations.  She says that it is easy to get caught up in projections that end up being a fantasy.

“Business is tough,” she says. “It costs twice as much and takes twice as long as your worst-case estimate.”

Many entrepreneurs have managed to get their businesses doing very well due to the networking that they are able to achieve. Joining a professional community gives business people a path to get insights and answers to any problems that they may encounter along the way.

External help

“Instead of figuring out issues on your own, you can reach out to more experienced business owners who may have already faced and solved similar problems,” says Ivynne.

Having learned this, she is launching The Founder’s Networking Club in a few months, to bring business people together.

The Founder’s Networking Club, she hopes, will be “an influential members-only business networking club with a proactive pursuit for novel ideas on critical market development; linking entrepreneurs and aspiring business leaders with captains of industry for mentorship and guidance in their career and, or, business journey”. 

The aim is to consolidate efforts to inspire and educate nascent entrepreneurs for the advancement of business research and connecting global leaders.

Entrepreneurs should also invest in branding, which sets their business apart from competitors.

“Strong unique branding, strong management and knowledge of finance and accounting will save your business in the long run. Don’t go cheap on these,” advises Ivynne.

In the end, the entrepreneurial lessons learned in the course of running a business will either strengthen the resolve of the entrepreneur and make them sharp as a tack or send them teetering out of entrepreneurship.