Most of us have heard about start ups, some failed in the long run and some have turned to big companies in the world today.
In the world of animals, the animals that are able to survive in their kingdom are thriving.
In academics, students with the highest CGPA are the ones who have distinguished themselves.
In the market and business world, the one with the highest market share and growth is usually seen to have thrived.
The key terms in the topic, are *_thriving and start up_*
_Thriving_ implies prospering, coping fine, championing, being successful in one endeavor or the other
_Start ups_ are businesses that are young and most times new. Start ups may be owned individually or in a group.
Therefore, thriving as a start up implies being successful as a new business amongst strong competitors.
It also brings about attracting new investors. Most start ups failed because they didn’t take some very important factors into consideration. This includes:
1) developing a good business model.
2) creating an outstanding business plan.
3) identifying your markets.
4) pitching up your business ideas for investment.
I got to know that fifteen (15) years ago, investors expected start ups to spend great amounts of time writing long business plans filled with forecast that were unlikely to be ever true. Today, sophisticated investors expect start up founders to focus on developing a business model for their start ups.
For instance, if you want to buy a car, you will have to gather data about such car, make several assumptions and plan towards buying that car and how you will use it. If you plan very well, you are sure to thrive and the car will fulfill its purpose due to your research and planning. However, if you don’t plan and make adequate research, the car could develop fault in the long run, thereby not fulfilling it purpose., thus the car is a failure. The same is applicable to business.
An adage says when you fail to plan, you plan to fail.
I remember back then in school, teachers are always telling us that prior to exams.
Now, what is a business model ?
A *business model* is the collection of assumptions that must be true in order for your start up to generate a consistent profit. This means you have to consider who are going to be your customers, if you will be meeting their needs, what channels you will use to reach them, if they have been using that kind of product, how your product can be distinguished from others. All systems need to be put in place to excel as a start up.
What are these systems ?
These systems are our marketing mix, which is referred to as the 4Ps…
*_PRICE, PLACE, PRODUCT and PROMOTION_*
But in the marketing and customer world, there are additional variables because of the importance of customers, hence *_PHYSICAL, PROCESS and PEOPLE_* were added to the marketing mix. As a business owner, you need to understand the importance of customers. Customers are the reason why we are still doing business and we need to interact with them positively.
The *_PRICE_* you will be charging, the idea you will be selling, the PLACE at which the PRODUCT will be available for sales, the way you will PROMOTE it in order to attract investors and the day to day interaction with customers. Like the saying customers are right.
All these have to be considered when making assumption about your business, your assumptions must be based on the *7 P’s*
It was advised to use this approach when making assumption about customers and a potential product. Its called a lean start up approach popularized by _”Steve Clark and Eric ries._” The lean start up approach is an interactive process which involves making a product available for customers in a smaller quantity, through which you get a response and make adjustments.
Its a continuous process that involves response and adaptation, so for those of us planning to own a start up we need to take this into consideration. Also for those who are already in business, it would be beneficial.
Having identified the appropriate business model, we will move to the next sub-topic which is *business plan.*
A good business plan is one that is scalable.
Scalable means business that grows in maturity and makes profits.
To attract investors and people who will put money into your business you need a solid business plan, now what are the primary element of a business plan ?
A good business plan will explain your idea as well as it’s market potential, it should identify problems that one will encounter and how one intend to provide solution. It should entail risk and how you intend to reduce the risk and that is what attracts investors. A good business plan will serve as a guide to answer questions posed to you by investors or interested partner. Your business plan should always begin with the sales demand side. For example, if your idea is a shoe. You will have to know your competitors, people who are selling the same shoe, is the shoe different from yours or is it the same. If it is the same you will have to improve on the production of your shoe. You will have to make customers see the difference in your shoe compared to others. Maybe, shoes in the market just last for 5 years , you can make your own in such a way it lasts for 10 years and above. As a start up you need to convince the customers that the price they are paying is worth it. This implies that you need to create a niche.
Also, you need to make financial statements of the expenses you will incur all through making the business plan. You need to envisage where your business will be in four to five years time.
What will be your profit in the first, second, third, fourth and fifth year??
A clear and concise business plan is adjustable, you can easily go back to it.
The next sub topic is *identifying the market.*
You need to locate your target market. Some will produce goods where they are not needed and expect to make profit.
I have seen people complain that they aren’t making profit but their problem was their poor market location. That’s why you need to carry out research before start up. Your research would determine whether they need the products or not. For instance you want to start selling mobile phones in a rural area. Then you start with iPhone 7 who will buy?? I promise you, none will buy. The kind of phone suitable for them is Nokia torch lights and the likes.
Lastly, we need to *make a good pitch* in attracting partners and investors.
A good pitch will tell your investors why they need to invest in your business. It must be concise and not more than one minute. It must show that your idea and product have the potential of making profits. Investors will only invest on products that have the potential of booming. So you can start planning your pitch and speech showing that your products is different from others.
*_Making a difference is the key to start ups ( Alabi, 2016) aka Kayfactor._*
1) In Nigeria, investors are hard to come by, what can one do in the absence of investors.
2) What is ur take on taking business plan to lending institutions and individuals to loan start-up capital
*1)* There are many ways of sourcing for fund, we have friends, families and many more. But most want to play it safe. I once read in Robert kiyosaki’s book that we can convert earned income to passive income, how can we do that. I am earning #100, 000 per month, I can save #50, 000 every months, and at the end of the year I will have about 600,000 with this, I can start a business… Then, improve as times go on. I can resign later if the passive income is generating more than my earned income.
*2)* Its good, if the business is promising, they will ask for your pitch which will tell them your business plan, lending institutions will be ready to assist if they see the business is promising. However, one must have a back up plan. Nevertheless, it still plays down on taking risk. People who make it in business are the people who aren’t afraid of uncertainty. Take the risk and see what will happen at the end. There is always a way. We all have that will power
What if the business idea is stolen ?
Your business plan and securement of your I.P. (intellectual property) right will deal with that.
Business also involves legal process especially if your idea is completely new.
Nobody can steal any business idea. There is actually no new business idea. God does not give just one man an idea. He gives it to many people at the same time because many will never make use of it. Ref: parable of talents
Most of us are scared of starting up and this continues to affect us. We need to get out of our shells and show the world what we can do.
However, there is need for us to be financially educated, we cant get that from schools but we can get them from business books, we need to seek information, to attend seminars e.t.c.
The school will only teach us how to dissect frog, but would not teach us how to make money from dissecting frog.
Business is a risk, but the *biggest risk is a lack of knowledge* If you lack knowledge in a certain field, you better don’t do business in that area.
Knowledge breeds confidence.
Hence, we need to develop our leadership skills, speaking skills and so on. we sometimes need to be rejected, when you are rejected your chance of success is very high.
Business is knowledge first before capital. Get to know all you need to know about all you have to do. That is where striving starts.
I remember during my Nysc days I was rejected by my colleagues being the only one who carried out personal CDs, I was rejected by people (funders) but I didn’t lose hope, my chances of acceptance increased as I was rejected the more. At the end I executed the projects and I will tell you, it worth the hassles.
You can always grow your business don’t aim that until when you gain 1m a day then it’s profitable.
Remember, not everyone will buy your idea, they will criticize you, but you should never stop trying.
FACILITATOR: Mr Kayode Hammed Alabi (Valuex Member)
COMPILED BY: Valuex Information Management Department