Start Small and Dream Big, Start Now!
“I built a conglomerate and emerged the richest black man in the world in 2008 but it didn’t happen overnight. It took me thirty years to get to where I am today. Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme.” – Aliko Dangote
As the Managing Director of Zhest Consult I spend my time training entrepreneurs in Ghana by helping them to shape and fine tune their business ideas and to grow their businesses. Through my interactions with these young business people I often get the impression that many of them would like to grow their business at a pace much faster than they are currently moving. Many young entrepreneurs are also impatient and give up too soon because they set unrealistic goals one such example is making millions of dollars within a short space of time. Add to that the fear of failure and our natural risk aversion which is a characteristic of a Ghanaian’s social and cultural attitude, creating a breeding ground for uninspiring entrepreneurs and businesses.
According to the Global Entrepreneurship Monitor (GEM) 2010 Ghana has 24.6% “New Business Ownership Rate” and 25.7% “Discontinuation of Business”. Established businesses discontinue more than new businesses are started. The report further reveals Ghana’s “Fear of Failure” for new enterprises stand at 10.4%.
The advice I often give young entrepreneurs is to, start small, have a global appeal and grow organically. This is often met with a curious look on their faces, entreating me to elaborate. Why wait for that seed capital, or to finish a course you are studying? Why are we procrastinating, waiting for our big break as entrepreneurs or to find money to register your company?
How did some of the world’s richest and most successful business people get started?
Lesson 1: Do not over think your business idea, Start Now
Richard Branson a successful business mogul, who owns multi-million dollar global companies launched his record label Virgin records in 1971 with just $200. Richard Branson has to date about 400 companies under his direction. When he started he was inexperienced, and lacked the knowledge and skills required to create a successful business.
At the airport, his final flight to the Virgin Islands was cancelled because of maintenance issues. He thought this was ridiculous, so he went and chartered a private airplane to take him to the Virgin Islands, which he did not have the money to do.
Then, he picked up a small blackboard, wrote “Virgin Airlines. $29.” on it, and went over to the group of people who had been on the flight that was cancelled. He sold tickets for the rest of the seats on the plane, used their money to pay for the chartered plane, and they all went to the Virgin Islands that night.
There are a thousand reasons why your business idea may not work, but you’ll never know until you actually start. You can plan, delay and revise your ideas, but unless you start your business it will remain just an idea.
Lesson 2: It’s what you do with your seed capital that counts not the amount
It took Aliko Dangote a Nigerian billionaire 30 years to build his empire. He narrates, “‘For me, I started small as a trader in cement. Then I left cement around 1978. Because there was this armada and cement was difficult to get at that time. I had my own money which my grandfather gave me free, but then he gave me also an additional loan of N500,000 (about $3,000) which was big money in those days. At that time (1978), you could purchase ten Mercedes Benz cars with that amount as each was sold for N5,000 while a Volkswagen Beetle went for N900 to N1,000. The money was quite a substantial amount then. Aliko was to repay his loan from his grandfather within 3 years, but he paid it back within 6 months. A good entrepreneur can make more money from any amount of seed capital given to him/her.
Lesson 3: Lack of experience should not stop you from exploring new business ventures
Folorunsho Alakija is Nigerian billionaire oil tycoon, she is also the world’s richest black woman. In the early 80’s, Alakija quit her job and went on to study Fashion design in England.
In May 1993 Alakija applied for an allocation of an Oil Prospecting License (OPL). The license to explore for oil on a 617,000 acre block – (now referred to as OPL 216) was granted to Alakija’s company, Famfa Limited.
She had no expertise or experience in running an oil field, but she decided not to sell off her license. In September 1996, she entered into a joint venture agreement with Star Deep Water Petroleum Limited (a wholly-owned subsidiary of Texaco) and appointed Star Deep Water as a technical adviser for the exploration of the license, by transferring 40 percent of her 100 percent stake to Star Deep.
Just like Richard Branson Folorunsho started a business she had no technical knowledge of running but she started anyways. Instead find partners who can provide the technical expertise for your business.
Lesson 4: Sell High Quality goods/services, at the best possible price
Many entrepreneurs in Ghana believe that profits should be realized instantaneously. Business owners mark-up their goods and services between 100% – 1000%. Simple economics and sound business logic should tell you that a business operating on 100% -1000% mark-up on your cost price is not sustainable especially in a business environment like Ghana’s.
Be modest when pricing especially if you are just entering the market and starting a business. Create a dynamic pricing strategy do not be rigid. Focus on attaining a large market share when entering a new market as a business you can only achieve this by selling your goods/services at a high quality with the lowest price possible.
I will expand on various pricing strategies for entrepreneurs in future articles.
Richard Branson, Aliko Dangote and many other multi millionaires did not wake up one day with millions of dollars in their bank account; they reached prominence through hard work, a bit of luck and by starting. They didn’t always have the money, resources, contacts, or experience. What they did have in common is that they chose to start anyway.