One day I asked one of the most inspiring Kenyan entrepreneurs I know what she thought makes it hard to succeed in businesses in Kenya. We do business at all accosts and that is not good, she told me. Now that is deep and confounding. Some branch of entrepreneurship advocates for you to do all that it takes. But should you really engage in biz at all costs including at the cost of the biz itself?. That got me thinking hence this piece.
1. Lack of Value Proposition
Let’s ask this direct question, “why should I buy your product as opposed to your competitor?” your answer should show me the benefits I get rather than trying to appeal to my humanitarian side. Yes, I know you are starting, humble, creative and all that. But I am interested in words that end with …est. cheapest, fastest, cutest and other adjectives that address what I am looking for. Don’t try to appeal to people’s humanitarian instincts. Do biz only when you are ready to compete and offer better value
Well, they say that there is no need trying to rediscover the wheel. But maybe copying for its sake isn’t really all that clever. There are people who feel they must do biz. Without a strong idea, they end up just copying others that have “looked” successful. This is how you end up losing money. Maybe until you are very clear on what extra value you bring you shouldn’t just copy and paste. You risk killing both your biz and that which you are copying
3. Crazy Price
For the average entrepreneur the first instinct is to compete on price. Just how low can you go? Some people are pricing themselves into losses trying to catch a deal. Most tell themselves they will recover in the next deal. Its desperate, only hawkers who haven’t sold a thing and need to feed their families should do that. Don’t just sell at a lose unless there is a compelling reason to. In any case, you find yourself doing this maybe it’s time to think why you should continue in this line of biz anyway
4. Insane Discounts
Linked to price is discounts. You will always find a buyer who wants to get more for less. I see this in food joints where they give you ugali sosa etc. You are giving cash discounts, quantity discounts, trade discounts etc. Whatever pressure you might have to impress a buyer. Do it within logic and guided by a strategy. Ensure you aren’t on the losing end
5. Punitive Terms
If you accept buyers to bully you into crazy terms then you end up burning your own biz. Don’t take up more responsibility and costs than you should. Specific packaging, deliveries, extended credit, customization and modifications should be done at a premium. Know the bare minimums you cant go beyond and then have someone pay for the extras they want. Otherwise, all those have cost implications that will likely drive your biz down
Some job has to be done on either advance payments. Accepting big jobs without pre-payments will strain your cash flows. You will end up running to banks to access some overdrafts. It’s stressful and costly. Again, check your strategy about this. Don’t just get excited because you got that order, think deeply on where you are getting the money to do the biz. So many guys have regretted running for government tenders that haven’t paid up yet. Now they got listed with CRB and ruined that good dream
7. Getting Paid
Chasing for payment can be strenuous. You go to someone’s office, queue for hours without seeing them, finally they call you up to meet at a club or some shady place only to give you part payments or post-dated cheques. Very unpredictable since you can’t really plan on that cash. If they cant sign up on a contract just maybe don’t deal with them. Such run arounds ground your biz or makes you to get into unplanned debt to keep alive.
8. Compromise (quality/quantity)
Desperation drives people into compromising on the quality and also quantity of their product just to make a little extra coin. Very unfair. So much substandard product in the market some of it selling at the price of genuine ones. Check your conscience, if your product will harm people don’t do it. Maybe if you declare that you are dealing in an “alternative” product or kadogo economy and price it appropriately then maybe you might just have the market you need.
Should you really be compromising your integrity by giving bribes in order to get the chance? If it needs you to bribe maybe you shouldn’t do it. It’s simple, when it comes to bribes the rule is don’t take and don’t give. That way we create an environment that is sustainable. If you take into account the bribes given to get the biz, bribes given to get the cheques/payment etc, sometimes they eat into the margins so much you wonder whether it really made any sense.
Ultimately, you choose the way of business in pursuit of success. Choose well. do it well. Dont let it get you into health problems. Don’t make choices that risk the health of the business. Good luck
Any one wants to share experience on doing business at all cost? Hit the comment section below