MSME DIGEST With Kola Owolabi
REVERSE ENTREPRENEURSHIP Series (11)
We shall be taking a break from Reverse Entrepreneurship Series after this post. However before we do so, we want to address a very important question that most entrepreneurs battle with particularly those who are going into business for the first time.
The question goes this: when is the best time for me to go into business? Is it the time I am ready (for most people it is when they have money they need to start business with) or is it when the market is ready for me? I have not conducted an actual survey to address this question, but from my experience of nearly thirty years as a business development consultant, virtually every one I met was bent on being sure of the capital they need for business before deciding to take the plunge.
When they get there and start work on the business with all the capital they need, there is one thing that happens fast, they start spending the money in their possession and surely the stock of capital will start going down and before they are able to make anything meaningful out of the business they are working on, they have exhausted all the money they started with. Thereafter, they begin searching for money all over again. I had the opportunity of the experience first hand when I was hired to be part of the management team of an investment company being started. After our inauguration, we were given starting capital, robust enough for us to rent a duplex in one of the most expensive business areas of Lagos. Thereafter, we had to furnish the office with exquisite office furniture complete with air conditioners and other necessary office gadgets. What was bought included what will be used to prepare tea for the staff. So when the doors were opened for business we had the time of our lives enjoying the cozy office environment and tea was served all the staff every morning. There was no problem paying salaries because the starting capital made adequate provision for that. However things started changing when we were approaching the fifth or sixth month of the commencement of operations. It was discovered that the capital left was not going to be enough to pay salaries for an additional month. Meanwhile, we had not done any meaningful business and no appreciable income had come in. We were just spending money. I don’t want to go into how God helped us out of that dangerous situation. The company would have crashed if not for the intervention of God. We resorted to what we ought to have done in the first place without the benefit of office or the capital we started with.
Maybe this explains the reason behind the statistic of just a tiny fraction of new businesses surviving beyond the fifth year. People think they are ready to go into business when they have money to spend on the business. What I found out is that when you have money at the beginning, there is no seriousness in you to chase business. Since you have money, you find yourself just spending money rather than chase how you are going to make money.
The time to start business is the time you discover an opportunity in the marketplace that you will like to pursue. The market is always ready to accommodate new businesses all the time. Don’t worry whether you have money or not. Actually if you have money, particularly if the money is appreciable, you are likely to have the experience we had in the experience I related earlier in this write up.
We have been talking in the spirit of Reverse Entrepreneurship for the past ten editions of this post and what we have been talking about is simple; rather than chase capital when you are starting business, chase customers and soon you will have all the capital you need.
Kola Owolabi (08023203198)
Kola Owolabi is a Fellow of the Nigerian Institute of Management Consultants (FIMC.CMC) and Chief Executive Officer of David Solomon Consulting Limited, based in Igbesa, a suburb of metropolitan Lagos, in the vicinity of Crawford University. The company can be reached via phone or WhatsApp at 08023203198
