More than 60% of all business ideas never live long enough to materialise and of those that do more than 80% do not outlast a single year. This is not to say the ideas are bad, well in some instances they are actually worse than bed, but some really good ideas just seem not to work out as they are intended. The current economic vision shift in most countries and in some instances the lack of economic vision, has led to the growth of the entrepreneurship sector.
Zimbabwe is no exception, one cannot surely ascertain the reason behind the sprouting of the informal sector in the form of small start-up, some allege that it’s an economic vision shifts whilst some suggest that its poor governance.
One thing we can all agree on is there is a steady increase in entrepreneurship, sadly most of these start-ups never get to experience the world outside the owner’s briefcase and if they do well they varnish from the face of the earth in less than a year. One then wonders, what could be the reason behind such massive failures, what can be done to increase chances of survival and who is ultimately responsible for business survival.
In my experience I have noticed that there are so many causes of these massive failures, however the most common one and yet rarely mentioned is the lack of vision by the owners of the idea/start-up or the company. Most start-ups do not have a vision, they just operate without determining where they are going, what is to be achieved or what they exist for. There is a common adage which says, it doesn’t matter which way you go if you have no vision because eventually you have no desired destination and it also happens that failure is the most common destination. If you put your business on autopilot and leave it to curve its own course well do not be surprised when you see it landing on the death zone aka business closure.
In my opinion every business, no-matter how small, needs a business strategy also known as strategic management. For improved chances of survival, one has to know which decisions to make, how to make decisions, have guidelines that dictates how everyone in that organisation ought to behave.
All businesses face money problems, reputation problems and yes intense competition, however, have you ever asked yourself how others survive. Some businesses are born from backgrounds of no finance at all, face unimaginable competition and yet have no good reputation to their name.
Despite all that, they standout and outshine or at least secure their future in the measure of the acquired advantage. But which advantage is this, how do they realise this advantage and how do they choose the route to take. I hear most freelancers in the web development circles crying foul about others charging as low as $50 per site. But with a well thought-out business plan with the elements of a strategy one can choose between low cost business strategy and differentiation strategy.
Knowing how you tend to position your business and how to eventually do it are two different things and they require a lot of commitment to master and ensure that the path you choose will ensure that you achieve that. This is a long road and it requires consistency and determination which starts with the following.
A business strategy is used to make sure that each and every decision made by any member of the start-up has value towards survival and growth of the business if every member of the start-up know what is to be achieved by the company then their decisions will be more inclined towards the interest of the organisation.
Unfortunately this is not the case in most start-ups, they leave the doors to their organisation unlocked and unattended and always act surprised when failure opens their doors and assert its dominance.
Lucky you dear reader, in this article I’m going to walk you through some of the things you need to make sure that exist in your company if you dream of having a company to run a year from now.
The first thing you need is a vision
Great writers such as Andree De Waal and Grant clearly stated that every excellent performing company has a vision. This is the reason why on almost every company’s website they put their vision. It is the ultimate destination that the organisation would want to achieve in a given time period. Without a vision written down, it doesn’t matter which decision you make because ultimately you have no target, which basically means you have no measure to judge your decisions or your employee’s decisions against. Everything you do in such a case will be right and unfortunately it will also be wrong. Take it from this perspective, how are you going to see if you are moving in the right direction if you do not set the direction you want to go. It is like a plane taking off an airport but has no intended destination, eventually it’s going to crash or disappear from the radar, whichever happens first.
After establishing a vision, then you need to take the next step.
A mission, just like the word suggest, is what you as an organisation intend to do. If you do not know what your company wants to do them it is going to fail because failure might as well be on its to do list. You can only determine your market size after determining the kind of problem you are fixing by what you exist to provide. Some companies take their mission to be..the best provider of office furniture in the country for SMEs. This forces a business to have focus and know how to best achieve their mission. There is a lot that can be said about the mission, however, in this 1st article I’m going to stick on the basics but I will definitely make effort to produce more detailed content that can help you and your business take the world head on.
This is the next step, it joins the mission and the company strategy, objectives by their very nature are targets that each and every organisation, and individual, no matter how small should have. They help when trying to break the mission of the organisation down into manageable units. Unfortunately we often rush into starting all these business because the idea is so fascinating but never take time to set targets for progress sake. The most common outcome of such an approach is heartbreak and burnout. The idea behind the notion of objectives is to have portions of the mission focused on different sections of the organisation. Some objectives are financial, they solely focus on the financial affairs of the start-up and their contribution towards the mission of the start-up. As you might have correctly guessed, other objectives will be productive related, customer relations focused and so forth. The idea is to make sure that all corners that have an effect on the performance of the start-up are covered. If this is done professionally and well your company’s chances of survival will be improved drastically. The sooner we master these fundamental principles the better least our ideas become history and nightmares that haunts us day and night.
The issue of planning strategically the future of an entity is of great importance, it is surely a cure needed by most start-ups that we have today if the entertain hope of having a meaningful future. Depending on the reception of the first article I will make a more detailed article looking at the issue of managing start-up strategically and ensuring survival of start-ups.
Until next time happy money farming!!
Guest Post written by Douglas Mwanza.
A business consultant specialising in the areas of strategy formulation and implementation.
Phone: +263 779 947 976
LinkedIn: Douglas mwanza7
Facebook: Douglas Dee Mwanza