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Without the element of uncertainty, the bringing off of even, the greatest
business triumph would be dull, routine and eminently unsatisfying. J.
Paul Getty
If you are an entrepreneur, then I believe you will be familiar with the challenges
associated with the entrepreneurial process of building a business from scratch. But if
not, and you dream of becoming one someday; then I think you will find this article
worthwhile.
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A good businessman must have nose for business the same way a
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journalist has nose for news. Once your eyes, ears, nose, heart and brain are
trained on business, you sniff business opportunities everywhere. In places
where people see a lot of obstacles, I see a lot of opportunities. At times,
there is something instinctive in me that tell me a business opportunity
exist even at a place where others see nothing. That is what makes me
different, maybe unique. A good businessman sees where others dont see.
What I see, you may not see. You cannot see because that is the secret of
the business the entire world is a big market waiting for anybody who
knows the rules of the game. Orji Uzor Kalu
Developing a vision is definitely a business challenge because an entrepreneur must
sometimes assume the role of a sorcerer. Let me explain in detail. Most individuals are
comfortable with the present way of doing things but it is the duty of an entrepreneur
to envision and forecast the future. An entrepreneur must always be ahead of his time
or else he will lose his relevance. It is the duty of an entrepreneur to bring into present
what is yet to be. It is also the duty of an entrepreneur to bring solutions to other
peoples problems. Let me give you some practical illustrations:
If you want to be rich, you need to develop your vision. You must be
standing on the edge of time gazing into the future. Rich Dad
a) In the late 70s and early 80s, while IBM saw increase in demand for their mainframe
computers, Steve Jobs envisioned a personal computer in every home and Bill Gates
envisioned the need for easy to use software for personal computers. That single
vision made Bill Gates the richest man in the world and Steve Jobs the most famous
business person of the 21st century.
Business is going to change in the next ten years than it has in the last fifty
years. Bill Gates
b) The Wright brothers envisioned a flying machine but they were massively opposed
because the thought of humans flying was perceived as impossible. Today, the
Airplane is a reality.
c) Back in those days when cars were custom made and exclusively for the rich, Henry
Ford envisioned affordable cars for the masses. That single vision made Henry Ford
one of the richest men in history.
You are nuts and you should be proud of it. Stick with what you believe in.
Trip Hawkins
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I believe with these few examples, my point is clear. Developing the vision and idea is
the first true task and challenge of being an entrepreneur.
2. Raising Capital for your Startup
After developing your idea, the next challenge you are going to face when starting a
business from scratch is that of raising capital. As an entrepreneur, you are the only
one that knows business your idea to the core. You are the only one that knows the
story of your future.
If you want to know the value of money, go and try to borrow some.
Benjamin Franklin
There is more to raising capital than just simply asking for money. Most investors want
to invest in already established businesses with minimal risk and they want to be sure
that they get returns for the risk they took. Most brilliant business ideas never scale
through the venture capital stage because the entrepreneur is either not prepared or
lacks what it takes to raise the needed capital. Just as my mentor, Robert Kiyosaki
says:
The world is filled with brilliant ideas and excellent products but the world
lacks seasoned entrepreneurs. Robert Kiyosaki
To overcome the challenge of raising capital, you must develop the ability to sell your
idea and vision to potential investors. When I say sell your ideas, I mean improving
your communication skill and your manner of presentation. In the game of raising
capital, you must have a good story to tell; backed by a strong business plan and good
persuasion skills. You must know how to pitch angel investors and venture capitalists
alike.
The ability to sell is the number one skill in business. If you cannot sell,
dont bother thinking about becoming a business owner. Rich Dad
3. Assembling a Business Team
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Eagles dont flock, you have to find them one at a time. Henry Ross
Perot
The third business challenge you will face in the course of starting a small business
from scratch is assembling the right business management team. When I talk about a
team, I am not talking about regular employees. I am talking about a strategic round
table business team that will meet regularly to brainstorm on ways to grow your
business.
Individuals dont win in business, teams do. Sam Walton
The process of building a business team starts even before the issue of raising initial
start-up capital arises. Remember I said that most brilliant ideas never scale through
the phase of raising venture capital. Well; this is where most budding entrepreneurs
miss it. Most brilliant ideas and products never get funded because the entrepreneur is
trying to raise capital as an individual. A business team is a vital, yet often ignored key
to raising venture capital successfully.
Teams should be able to act with the same unity of purpose and focus as a
well motivated individual. Bill Gates
Its your duty as an entrepreneur to make sure your team sees the future you see. They
must believe in your possibilities and must also be passionate about making that
possibility a reality. If they cant grasp your vision, if they cant see the future with you,
then they are not worthy being your team.
My model for business is the Beatles. They were four guys that kept each
others negative tendencies in check; they balanced each other. And the
total was greater than the sum of the parts. Great things in business are not
done by one person; they are done by a team of people. Steve Jobs
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Your strategic business team should comprise your banker, financial adviser,
accountant, attorney or legal adviser and any other specialist that will be of
tremendous impact to your business. A question on your mind right now might be
how am I going to pay this team My answer is I dont know. You will have to figure it
out yourself or better still, you can consider bringing them on board as partners.
Go to the wolf, consider its ways and be wise. A wolf will never hunt alone;
it hunts in packs because it knows the power of team work. Ajaero Tony
Martins
4. Finding the Right Business Location
Is finding a good location a business challenge? I dont know but what I do know is that
finding a good business location at the right price is definitely not easy. How do you
get a location that has a rapidly growing population, good road network and other
amenities at a good price? Well, you will have to figure out yourself.
5. Finding Good Employees
If you own a butcher shop, dont hire vegetarians. To hire the right people,
you have to let the wrong people go. Rich Dad
Most writers and managers crank up the process of finding good employees as an easy
task. They define the process of finding an employee as simply presenting the job
description and the right employee will surface. But I think its more than that.
The competition to hire the best will increase in the years ahead.
Companies that give extra flexibility to their employees will have the edge
in this area. Bill Gates
Business owners know how difficult it is to find a hardworking, trustworthy employee.
Most employees want to work less and get paid more. Finding a good employee who
will be passionate about delivering his or her services is quite difficult. Finding good
employees is a minor task compared to the business challenge of forging your hired
employees into a team.
You may have great employees but if they cant act as a team, they are worthless and
will yield nothing but stagnation. A football team may have great skillful players but if
they fail to play as a team, their possessed skill is useless.
Bringing together the right information with the right people will
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Thank God for my customers. They buy my products before they are
perfected. Henry Ford
Bad customers will always look for loopholes in the companys policy to exploit and
make a few gains. Bad customers will always try to exploit the companys goodwill and
look for ways to rip off the company. Bad customers are responsible for bad debts.
Good customers build your business and bad customers will always try to liquidate
your business. Just as you fire employees, you must also be prepared to fire bad
customers without hesitation. Remember the story of the customer that sued
McDonalds claiming the coffee was too hot.
You must fire bad customers just as you would fire a bad employee. If you
do not get rid of your bad employees, the good employees will leave. If I do
not fire bad customers, not only will my good customers leave but many of
my good employees will leave as well. Rich Dad
7. Dealing with Competition
In business, the competition will bite you if you keep running. If you stand
still, they will swallow you. Victor Kiam
Competition is the next challenge you will face when starting a business. Most
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The competitor to be feared is one who never bothers about you at all but
goes on making his own business better all the time. Henry Ford
8. Unforeseen Business Challenges and Expenses
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In three years, every product my company makes will be obsolete. The only
question is whether we will make them obsolete or somebody else will.
Bill Gates
Change in trends is a challenge you must be prepared for when starting a small
business. Trends have made and broken lot of businesses. I know a lot of profitable
businesses that have been wiped out by slight industrial changes and trends. A typical
example is the Dot com trend, where many established industrial based businesses
were wiped out by new web based dot com companies.
In the world of business and investing, your exit is more important than
your entry. A good thumb of rule is this; exit before you enter. Robert
Kiyosaki
When building a business from scratch, you are going to face the challenge of
determining your exit strategy. Just as the quote above states, you have to plan your
exit strategy before you even start the business. Most entrepreneurs run their business
without any plans to exit and even if they have an exit strategy, they find it difficult to
implement it.
Always start at the end before you begin. Professional investors always
have an exit strategy before they invest. Knowing your exit strategy is an
important investment fundamental. Rich Dad
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Before starting a business, it is advisable to plan an exit. Lack of an exit plan is the
primary reason why most businesses crumble after the death of the founder. An exit
strategy is very important to the long term survival of a business. now how do you plan
an exit strategy? There are benchmarks you can use to determine your exit from any
business. Most smart entrepreneurs will use a certain benchmark as a target and once
this specific target is reached, they exit the business. Examples of such benchmarks
are:
Annual sales
Annual Turnover
Asset Base
Market Saturation
Customer base, subscribers or number of users
Now when it comes to exiting a business, there are three strategies you can apply. You
can choose to exit a business in any of the following ways:
a) Turning over the business to professional managers
When your business reaches a certain stage of maturity, you can exit by turning it over
to professional managers. In this case, the business still belongs to you but you are not
involved with its day to day affairs. You will have to give up administrative role to
assume the role of a watchdog. When you exit in this manner, you will have more free
time to look at other projects or retire.
b) Selling the business privately
In this case, you are exiting the business by selling it to a private investor. In the
business world, it is called M&A (Mergers and Acquisitions). Exiting your business this
way means that after the sale and transfer of assets is complete, you have nothing to
do with the business again.
c) Taking the company public
The unique thing about this type of exit strategy is that while you are selling your
business (in form of shares) to public investors, you still maintain control over the
business. Please before you apply any of these exit strategy, I will advise you consult
with your attorney or legal adviser. But ultimately, its up to you to decide the exit
strategy you want to apply; but always remember your exit is more important than
your entry.
As a final note, I want to state clearly that challenges come only to make you stronger;
so dont faint in the face of challenges. Stand tall; keep moving your business forward
and I will see you at the top.
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When you are successful, everyone wants to associate with you. But nobody gives a
damn about the process you went through to achieve such success.
Everyday, I keep receiving accolades with respect to my achievements; yet deep down
inside of me, I know success is not what its painted to be. This piece is about a recent
business challenge I encountered, how I solved it and the lessons I learned from the
experience. I am writing this for those who are currently experiencing hard times in
business and life in general. I want you to know that you are not alone. As you read, I
hope you learn and profit from my experience.
Sometimes, challenges or problems come so fast that you lose your grip. Regardless of
your financial or social status; you will never be free from problems. I get my own fair
share of problems everyday but just recently; I was hit by a massive setback.
The period April to July 2011 was one of the toughest in my life. I was practically
running on adrenaline and living on edge within these four months. Now you may want
to know what transpired within these four months but I think this should be a story for
another day. However, I will give you a brief insight of what I faced recently, how I
overcame and the lessons I learned. So if you are still eager to profit from my
experience and foolishness, then read on.
In the month of April 2011, I was robbed at gun point and it took me some weeks to
overcome the trauma. In the month of May, my business suffered a major setback and
in June; my bank placed a hold on our business account (meaning we cant make
withdrawals from the account) due to some differences that needed to be reconciled.
My business suffered a major cash flow crisis as a result of this single action the bank
took, so I resorted to borrowing cash from family and friends to keep my business
afloat. By July, I was deeply in debt. Within this period, I was always on the go;
shuttling from one state of Nigeria to another; just to resolve the problem I was
encountering.
Now lets fast forward to this day; the third day of August 2011. As I write this now, I
cant really tell how I feel. All I just want to say is this; I survived. As at today, I have
cleared all outstanding debt I incurred within the hard times, my bank account has
been restored and my business has roared back to life. But it took me and my team, 90
days of untold stress to bring things back to order.
Now how did i survive this trying period? How did i stay afloat? How did i keep my
body and soul together? You will find out below
a. I sustained my business cash flow
Cash flow is the life blood of business and when it begins to trend in the negative, it
will only be a matter of time before your business collapses. When I resorted to
borrowing cash from family and friends; I was only trying to keep my cash flow
position positive, I had to make sure the daily operations of my business continues
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unhindered and this also implied that I had to make some cut on our daily expenses.
b. I took responsibility
When the problem began, I had every right to point a finger to any member of my
business team and say; its your fault. After all, i am the boss. But I didnt do it. I did
not run into a hole and hide; rather, I placed myself in front of my team. I told them
that a mistake has been made and I was not interested in trading blames at that
moment; all I needed was a solution and my team responded positively. They thought I
was going to axe someone but I didnt. Rather, I preached the need to jointly assume
responsibility and resolve the mess together; with me as the lead dog.
c. I engaged in critical thinking
I have said it in previous articles that critical thinking is a key to effective problem
solving. In the midst of the ensuring tension, I still found time to think in solitude. In
fact, I spent most of my free time alone to the extent that my dad became concerned
over my health and began counseling me to take things easy. But I laughed him off
and quietly explained to him that I wasnt worrying, I was thinking. At this point, I want
to make it clear that theres a big difference between thinking and worrying. Thinking
solve problems but worrying compounds a problem and may even get you killed. My
dad probably never understood the difference.
d. I tackled the problem head-on
What do you do in the face of problems? Do you face them squarely or you run and
hide? Well, I know from experience that people react differently in the face of
problems. Some even ignore the problem as if it doesnt exist. But to pull myself and
business out of the mess, I knew I had to tackle the problem head-on and I did.
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are. Even though I have solved this particular problem, I know bigger problems are still
lying ahead of me. Instead of praying never to encounter challenges; the question I
constantly ask myself is how prepared am I to handle the next challenged?
I know you can never be too prepared for whats ahead since you cant predict what is
to come; but at least, I believe that he who is prepared has half won the battle. Now
how can you prepare for what is to come? A good way to start is to keep aside a
certain amount of cash specifically for emergency purposes.
As a final note, I want to say that I am happy to be writing this now. Call it my survival
write up and you wont be wrong. Its not easy being at the helm of affairs; its not easy
being a business leader. This single incident made me wonder the amount of pressure
top business leaders and CEOs go through during challenging periods. Well, like I said
earlier; all problems will surely come to pass. The real bone of contention is whether
you will survive or not.
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