Entrepreneurs face many challenges in today’s ultra-competitive business world.
Fortunately, modern times have provided more resources for tackling these problems than ever before. But the best advice tends to come from those who’ve walked the entrepreneurial path .
Waihiga Muturi, the founder of Let’s Create Africa, is a social entrepreneur and the brains behind #TheExperiment. This is an interactive session where founders share their challenges and get solutions from their fellow entrepreneurs. Hustle attended one of these sessions, and here’s a summary of what was shared.
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1. Cash flow
Yusuf runs Techeck, a computer accessories enterprise, and raised the issue of cash flow management.
Many businesses, he said, aren’t making losses, but they don’t seem to be making profits either. One of the main reasons for this is delayed payments, where one does a job, sends an invoice and then waits to be paid (hopefully) 30 days later.
But in this period, the entrepreneur still has to pay for things, from salaries and contractors to stock and rent.
The solution: Proper budgeting and planning are critical to maintaining cash flow, but even these won’t always save you from stressing over bills.
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One way to improve cash flow is to require a deposit that covers expenses associated with a project or sale.
Another strategy is to implement faster invoice payments. Invoice clients within 15 days, which is half the typical period. This means if a customer is late with a payment, you have two weeks to address it and hopefully get paid before the next month’s bills are due. Explain your strategy and you’ll find the support your need.
2. Finding customers
The lack of a market for products and services is a common complaint among entrepreneurs.
Monica quit her job and plans to start selling broiler chicken. She wants to raise the birds free-range for health reasons. She feels strongly that given the expensive process, she needs to maximise her return on investment with efficient, targeted marketing that gets results.
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Kimunya, a certified coach and director of iWeza, adds that marketing, especially for services is problematic. In his experience, he’s found that fields like coaching rely heavily on referrals and a lack of clients can strain operations.
The solution: For entrepreneurs with the budget for paid marketing, it might be best to hire an actual marketer rather than add to an already long list of tasks as business owner.
But even if an outsourced marketing manager isn’t on the cards just yet, creating social media pages is a great place for a new business to start.
However, instead of getting your business on every platform, which can be daunting to keep up with, stick to the ones that are most relevant to your audience. And make sure you deliver content in a format your audience expects, whether that’s written, on video or through podcasts.
At an advanced stage, consider working with influencers or launching a Google Ads campaign. Keep the quality of the product or service you provide top notch to retain customers after the marketing campaign winds down.
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Banks aren’t always willing to lend to young companies with little to no revenue track record or credit history, while many international financing options are difficult to access for African companies. What’s more, you’ll be hard pressed to find an institution that will fund ideas.
The solution: Several new alternative financing options are available to entrepreneurs at the start-up level.
Crowdfunding is still relatively new, but you can access it through platforms like the Africa-centric LelapaFund. Other options are M-Changa, Indiegogo, Kickstarter and One Percent Club.
You can also explore Bitcoin-based small business loans, like Bitbond, which allows for loans to be received in the local currency that’s equivalent to the bitcoin amount borrowed.
You can also apply for a zero-interest loan from the US-based microfinance peer-to-peer lender Kiva.
Keep in mind that it may take years to turn a profit and build reliable cash flow, so don’t bog yourself down with expensive repayments.
4. Hiring the right team
No one dreads job interviews more than entrepreneurs. The wrong hire can sink a business in no time.
And even after you’ve found your diamond in the rough, you have to retain him or her. Sylvia, the CEO of Tech Hub Holdings, says she’s lost employees after training them for several months. Hellen of Hellenique Designs adds that her struggle is finding reliable tailors for her school fleece jackets.
The solution: Be specific about the qualifications of each role you have, ask the right questions and don’t hire in a bubble. Involve other people, especially the team members who will work closely with the new hire.
Ask questions relevant to the job and to candidates’ experiences, expectations, dedication and long-term goals. Take the time to talk to real references.
And to hold on to your star employees, develop a company culture that promotes the qualities you’re looking for. This way, it’ll will be easier to attract the right people to the job and ensure their loyalty.
5. Believing your worth
When you’re in business, it’s extremely easy to get discouraged when things go wrong or the company doesn’t grow as fast as you’d like. Self-doubt creeps in.
Emily of Artheal Foundation says the planning process can be a breeze, but before things take off, you’ll find yourself going back and forth, questioning yourself and how big of an impact you can make.
For Jesse, he attaches so much value to his work that he struggles to find clients willing to pay his rates for web designs.
The solution: Just because the stakes are higher doesn’t mean your stress levels have to be, too. Calm your mind with regular exercise and meditation.
Manage your expectations and realise that profitability is often elusive, especially in the early years; be careful not to overestimate your value.