Nigeria is a country with huge entrepreneurial potential, which has often been harnessed and developed into indigenous conglomerates. But the challenges for many of these homegrown businesses are continuity and sustainability. Many companies, fizzle out and die shortly after the exit of the founders, unlike their foreign counterparts who are able to grow and keep their business active for centuries. So what should Nigerian business owners do to ensure growth, continuity, and sustainability of their businesses long after they are gone?
1. Define and Document the Business “Reason for Being”
Why does your business exist? What are you doing that justifies your reason to do business in the first place? What problem are you solving, or what value are you adding? These questions have to be answered because they will form the core of your strategy and overall business direction. The answers to these equations will separate you from competition and will also determine the method and manner you operate within your industry.
Yes business is ALWAYS about the money but it should never be ONLY about the money.Always seek to ADD VALUE, and the money will surely follow.
2. Document Your Business Strategy – Long Term, Interim and Short.
I have discovered that many local businesses don’t have a strategy, or at best if they do, it resides in the brain of the founder, and the plan is usually a very short-term one, most of the time, it does not go beyond 12 months. To ensure continuity you MUST have a long term plan. Yes we all know that however well you plan, it is only a plan, but we are also very familiar with the saying, “if you fail to plan, you plan to fail.” This is very true, so start with a BHAG, (Big Hairy Audacious Goal). For example, a start-up fashion outfit with about 10 regular customers has a BHAG of being the “Gucci” of Nigeria in 10 years. Tall order, but possible with focus and hard work. So what will you need to make that happen in 10 years, what will the desired turnover be, how will you generate it, how many clients would you require to generate this turnover, what assets would be required to service these clients and how will you raise capital to make the required investments, etc.
Then after researching and answering all this, ask yourself, where you should be in 5 years time to achieve where you want to be in 10 years time. And then ask yourself where you should be in 1 years time to achieve where you want to be in 5 years time and so on, then work all the figures backward. You may need to do a lot of research and you may also need some professional help with the mathematical calculations.
3. Don’t do 2 in Isolation – Work with people who “Buy into” No 1.
You can’t do the above in isolation, you need partners and people who not only UNDERSTAND the vision but also WANT TO BE A PART OF IT. By partners I don’t mean investors alone; your staff are also partners and should be treated as such and not as ‘factors of production.’ True, not everyone will stay with you till the end, but they will add value while they are there and hopefully, your organisation should add value to them too, not only in terms of compensation but also in the area of experience and training etc And if you have a very good relationship with your staff, they will become great ambassadors for your company long after they exit.
Now getting people’s buy-in and the right DNA for your organization is very critical, you need to have people with the right mental attitude and approach to the business, so this should be considered and processes set up to capture this right from the recruitment process. You need to ensure you hire people who don’t see the work as just a job that pays the bills at the end of the month, but people who love their jobs and are excited to get up and go every day because they love what they do. And one of the ways to ensure this is if the staff sees what value he is gaining from working with you.
3. Learn to “Let Go”‘ – don’t Micro Manage
Don’t fall into the temptation of micromanagement because of lack of trust. Yes, we know that there are so many unscrupulous people out there who are all too ready to take you to the cleaners, but again, a lot of start-up business owners because of the need to maximize profits often pay their staff peanuts and treat them like slaves, literally!! The staff in return then steal at every available opportunity and feel justified for doing it. You need to build trust and loyalty. Yes! you could still get your fingers burnt, its a risk, but business is about taking risks. Don’t because of one bad egg, close the door on everyone else. Just ensure there are adequate controls in place to at least minimize the risk.
4. Build Your Organisation Around Processes and Not Around You.
I have said let go and don’t micro manage. This can only be achieved if you have standard documented processes for doing everything. That way everyone knows what to do and how to do it, Build in controls and counter controls into the processes. That way you don’t need to be there and you also do not need to be the one to take every single decision and sign every single cheque. The organization can run on auto pilot with very little direct intervention from you. What you and your top executive management team should be doing is working on those BHAG to see how you can achieve them, even faster than planned. Remove routine activities as much as possible from your plate. Yes! when you just start the business it will need your direct involvement, but as the company grows you need to slowly withdraw.
5. Set up a Good Management Team
I mentioned earlier, the business should not revolve around you, get competent people to sit on your management team. They should be your partners and allies, people who understand the vision and want to be part of it. And please, allow them to do their jobs! Don’t counter their every activity or directive, you hired them for their competence so, let them use it! Don’t be a backseat driver. It’s annoying and frustrating and people will quickly leave if they are not allowed the think and apply their skills.
6. Build a Culture of Excellence Based on Principles and Right Practices
Build a good positive culture within the company based on right practices and principles. As much as possible try to create a fair playing field, reward hard work, and penalize offenders, avoid preferential treatment and favoritism, promote transparency and integrity, and let everyone know where the company stands. Don’t have once policy for Peter and another one for Paul. Treat everyone fairly and equally. Even if your children work in the company, try to avoid giving them any preferential treatment.
7. Don’t Put Your Hand into the Till!
This is one of the huge problems of the sole proprietor or partnership business. “My money is company money, and company money is my money.” Well, !’ve got news for you, its not! You need to separate the two, keep business money for the business. pay yourself a salary instead and try to be disciplined in keeping your expenses within your salary. Learn not to make unstructured, unplanned or impulsive payments from company funds. If its not in the budget – then don’t spend it.
8. Research, Innovate, Change!
Make this step part of your core business practice, make it a culture, live it, breathe it. Make your company flexible and ready to adapt to new ideas, methods, and technology. Study your market, industry, and environment and always be ready to develop, adapt and completely change to serve your customers better. One of the challenges of small businesses is that they continue to do things the way the founders, did them 30 years ago! Times have changed and people have moved on, so move on with them. Prepare to invest a little bit in new technologies and tools that can enhance your overall business performance.
9. Prepare to Hand Over to a New CEO
This is the emotional part, you have to relinquish your position as CEO at one point in time or the other. You need to come to terms with that, the truth is you won’t be around forever. So you need to hand over to competent people if you want to ensure continuity. One mistake some company owners make is handing over the leadership of the business to their children, family members or other people who have neither the experience, training or competence to handle the role, who have never participated in the business or the industry and who do not yet have a full understanding of what it entails. Now don’t get me wrong there is nothing wrong with wanting your children or family members to take over from you, but please ensure that whichever successor you choose, he/she is sufficiently competent to effectively to do so.
Remember that you can always pass your shares onto your children or family members without them having to participate directly in the management of the business if you are a limited liability company. What is important is that you ensure a very strong culture, detailed and documented systems and processes run by competent people who can effectively keep things running long after you are gone.
This is not an exhaustive list and is by no means everything that you can or should do, but it provides a basic guide to start you off!
Thank you for reading my post. This is the second in series of write ups I will be sharing based on my many years of experience working with corporate organizations, here in Nigeria