Start-ups ensure balance in economic activity, power

Shelter Chieza Change Management
The economic challenges of the past decade have resulted in the economy becoming more informal as more people opt for the entrepreneurship route.

There has therefore, been emphasis on opening small companies with very lean structures as focus is on keeping costs at the barest minimum.

Thus you will find the director of the company is the CEO, the sales and marketing, the HR contact, the accountant.

All these responsibilities are bundled into one with the hope of macro-managing every single one as efficiently as possible.

Although I can’t envisage a CEO being the chief innovator, for some, this is clearly working out.

Which brings me to the question I was asked during one of my presentation on when it is most appropriate to pursue entrepreneurship.

Does it then make sense to venture into a start-up under the present economic conditions or is it better to wait till later?

My response was that it depends on what the nature of business that one wants to venture into as businesses require different environments to thrive.

There are some companies that have recorded huge profit margins that they had never anticipated in tough environments

It takes a lot to build a company that is so big and powerful, which can withstand any type of pressure.

Take a moment to read some of the powerful testimonies about what our successful companies have gone through over the years. Compare them with the Apples, Googles, Yahoos of our times.

Most people take a simplistic approach to forming a company without really first understanding what is required or understanding key issues such as the Companies Act.

Most people have the skewed notion that the moment you get into business you automatically start making money, yet you need to put in money to make money. So when they find themselves pumping in more and more money, they get discouraged.

Getting into a business must be fuelled by a desire to fulfil a need, if you don’t have that desire you might as well stop.

I have come to appreciate that when considering a start-up one must have at least two years’ worth of cash on the balance sheet to allow the business to take off.

Now that might discourage some people who were considering quitting that “underpaying” job.

If you are such a person you might need to hang in there until you have everything you need.

You also need to have a product which consumers would love and are happy to be associated with and an effective sales and marketing that will ensure that your product is known.

It will be folly to ignore the influence of technology. When developing a product it’s critical to consult the market.

Entrepreneurship also looks attractive for someone that prefers having some form of flexibility so they can dictate their day.

The fact that you can choose to work from home, in the office, in a coffee shop is very attractive to most people. Perhaps one of the advantages is creating your own opportunities.

You have an option of choosing meetings and gatherings that you see beneficial to your achievement.

However, making entrepreneurship the centrepiece of a country’s economic development scheme has been heavily criticised in some quarters.

But some analysts believe that if an economy has the greatest opportunity of generating high returns, it makes it easier to woo investors into your country.

If your nation has high levels of entrepreneurial activity, it follows that economic activity will also be on the increase.

I have a strong belief that new jobs are being created by small companies. It’s the smaller firms that are more innovative and making use of new technologies.

Some of these big firms, in my view, now require cranes to move them to a new level of innovation.

It’s shocking that there are some big companies that still use typewriters.

I visited one of the companies and when I saw the typewriter I thought it was a relic on display but was amazed when one of the employees used it to generate a receipt.

The gap between new companies and existing companies that create more jobs is getting very small if not noticeable.

Entrepreneurs have a unique place in a community’s economy and not all deserve to be regarded with disrespect and suspicion as is the case in this country.

Being an entrepreneur has its advantages, if I am managing my local business,

I am less likely to relocate as the business grows and changes.

I could think of expanding and exploring other markets but I would prefer to have a base in my home country.

I am more likely to re-invest my profits and develop the community I live in. I can create employment opportunities for the young people that are struggling to get jobs with the big companies topping it with a flexibility that a lot of multinationals cannot achieve.

These businesses tend to have a higher sense of community spirit and can easily incorporate philanthropy in their work.

I believe entrepreneurship is one of the most important input in the economic development of a country. Most entrepreneurs act as triggers that spark economic activity.

Entrepreneurs ensure a balance in economic activity and power.

Till next week, may God richly bless!

 Shelter Chieza is a Management Consultant. She holds over a decade of Management Experience. She can be contacted at [email protected]

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