Starting any business is arduous, but the same business started in different geographic climates will likely perform vastly different as market factors as well as competitors and regulatory components take their toll. This difference, in fact, is so profound that such angel investors as Hiruy Amanuel have noted several key factors to success when it comes to traditional startups and how these factors do not apply to startups in various countries like Ethiopia.
If you are starting your business, you should take into consideration such things as funding, which might seem like a tried-and-true path to success but actually might do more harm than good. Additionally, if you are to succeed as a business owner, there are some personal convictions that will also come into play.
1. Funding cost-benefit analysis
According to Hiruy Amanuel, funding from outside investors might provide an entrepreneur with all the sought-after means to run the company through that barren period of time that separates non-profitability from sustainability, but there are several funding caveats of which entrepreneurs need to be aware:
- could impact day-to-day operations via a focus on profitability and return
- might cause you to focus on growth rather than quality to attain return on investment
- might negatively impact future profits
- might force you to grow beyond your technological abilities to meet customer needs
In each case, entrepreneurs should weigh the pros and cons of external funding, focusing on only those opportunities that successfully meet the entrepreneur’s needs without compromising the business at some point in the future.
2. Objective belief in yourself
Hiruy Amanuel is no stranger to self doubt, and he is certainly no stranger to having doubt thrust upon him by friends and colleagues who expressed doubt in his ability to succeed in his endeavors.
However, armed with both passion and the lessons of past failures, he was able to push forward toward eventual success by taking heed of his failures and maintaining an objective stance toward his business.
By maintaining objectivity, he was able to see his endeavors had promise and that he had the potential to realize that promise and capitalize on that potentiality.
3. Birds of a feather
It is well known that success begets success and that successful people take heart in and learn from the efforts of other successful people. Simply put, you should surround yourself with successful people and be inspired by the successes of your colleagues and competitors.
By doing so, you are bolstering your defenses against bad luck and self doubt, and the best ways he has found to remain inspired by this fellow entrepreneurs is by networking with them, taking classes from them, and by consulting with them.
4. Slow growth
If you take serious his warnings against the perils of third-party funding, you should, by extension, understand that growing slowly is the best way to ensure the long-term success of your business. Traditional funding methods that might work in western nations often do not work in Africa as they require faster growth to meet scheduled return on investment (ROI).
Instead of pushing for exponential growth, entrepreneurs are best served by taking it slowly as companies based in Africa are relative novices in areas of technology. If you push to fast, your company can be easily overwhelmed by the technological requirements that often come with fast growth, and these requirements might involve adding infrastructure or expertise, both of which might be relatively scarce resources.
If you want to succeed, you should master your services and dominate your market – as slow as is required. Doing so will ensure you will have the best chance to afford such things as technological change and scalability when they are eventually required.
5. Customer service
Perhaps the most important piece of advice is that entrepreneurs must learn what the best western companies have mastered: the lesson that the customer is always right. From the very outset, companies should have dedicated strategies in place to serve every customer’s needs.
Financial resources should be allocated to ensure the customer-service department can exceed expectations even if the customer-service department is a department of one. To do otherwise is to set your business upon the path of obsolescence as other competitors able to make their own customers happy will step in and make your customers happy. When this happens, they will, of course, no longer be your customers, and your business will never grow beyond its infancy.