Highlights from the entrepreneurs workshop on 26th January

As the entrepreneurs walked in and settled in their seats, it didn’t take long after the facilitator started to get the class energetically engulfed in discussion with participants’ hands shot up to contribute in the discussions, while others nodding their heads in consent. Such was the case during the Entrepreneurship Workshop that was hosted by ISBI at the Strathmore Business School last Friday.

The seasoned cast of facilitators including Dr. James Wanjagi, Mr. Suncan Pavlovic and Mr. Eliud Njogu made the sessions more insightful, by tactfully breaking down difficult concepts, using real life case studies that kept the attendees alive to the discussion.

The workshop tackled the topic of Seven Stages any successful business evolves through and what is necessary to move to the next stage.

Stage one is the concept and start-up stage and is characterized by the entrepreneurs surviving on savings, but being in euphoric state Entrepreneurs are their own salesforce.

The second phase is pure survival, the entrepreneur’s savings are quickly running out. The entrepreneur is living on the edge and worried to keep the business doors open. Work is the only lifestyle.

If the business makes it past the second stage, the third stage is when the business finally breaks even. No fancy lifestyle is yet in sight, but the entrepreneur is breathing somewhat easier. The business is however still tied to the entrepreneur.

The fourth stage is fashioned by stability and expansion. The entrepreneur has probably repaid the debts by then, but is still in the treadmill of daily work. The most common danger at this stage is overdependence on one or two major customers.

In the fifth stage the company is established, the entrepreneurs are off the treadmill and instead of doing everything themselves, they manage and supervise their employees. Given that some tasks have been taken off their in-tray, they have more time and disposable income.

Due to the established work systems, freedom and significance are the trademarks of the sixth stage. Entrepreneurs are leaders, no longer supervisors. Their task at this stage is to plan the future; otherwise they can quickly slip back to stage four.

In the seventh stage, the business is thriving and the management team is in place. the goal of entrepreneurs is legacy and succession plan for the business to continue beyond them.

The workshop touched on several hot topics for any entrepreneur, such as financing and competition.

First of all, the key to success of any business is anchored in intersection of three things: what entrepreneurs personally are passionate about, what they can do best and what can be monetized. It’s difficult if not impossible to become successful if you are not passionate about what you are doing.

Secondly, it is important to focus and not waste the resources on everything. All successful companies have perfected the art of doing one thing perfectly. Better be the best choice for a small market segment, than a second choice for everyone in the market. A logical consequence of this is avoiding competing on price. Price wars can only be sustained by giant companies and be definition are not a strategy for SMEs. Our panelist Catherine Gitonga from Kate Bakers and the entrepreneurs from the audience confirmed this from their experience that in fact lowering prices achieves the contrary and results in chasing customers away because they suspect the business started compromising on quality.

Thirdly, many entrepreneurs tend to complain about expensive financing. However, the cheapest source of financing is optimizing your operations and freeing the capital the business is using ineffectively. In fact, investing more into a business before optimizing it may be dangerous and result in increasing losses. Besides, the financial risk, i.e. the debt ratio of your enterprise must correspond to the operational risk level of your business and not aggravate it. For more on this topic including a real Kenyan case from our consulting practice read here

The distinguishing feature of being an entrepreneur is combining two roles at the same time, that of a manager and that of an investor. Being your own employee, entrepreneur’s skills are vital to the success of your business.

Invest in your own skills to move your business forward. ISBI Advanced Entrepreneurship Program combines the necessary topics on all aspects of entrepreneurship with real life Kenyan examples. The program is not an expense, but the best investment in the success of your enterprise. You will recover this investment latest in 6 months through optimizations in your business. February intake enrolment is ongoing. Limited scholarships available. Apply here.

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Mastering private enterprise.

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ISBI @ Strathmore Business School

ISBI @ Strathmore Business School

Mastering private enterprise. www.isbi-kenya.org.

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