AFRICANGLOBE – As hordes of Under 30 CEOs emerge, a changing phenomena that is rapidly becoming the norm in African business, the need to equip a vibrant business savvy generation with the necessary tools to create sustainable businesses is of utmost importance. However, the question is: How and at what cost?
Diary Of An Under 30 CEO, in its own way, is partly playing a part by disseminating information on how to build sustainable business and the principles young entrepreneurs need to imbibe, so as to avert the dangerous explosion of youth unemployment on the continent before it becomes a continental catastrophe. At a time when investing in Africa, is the most used phrase at business forums globally, the challenge for African governments is how they can get their idle youths to join in, on the gold rush to exploit the resources abundant on the continent.
There have been false dawns, and a lot of encouraging nationalist rhetoric about entrepreneurship. Even though this is not racially inclined, the realities of entrepreneurship on the continent should hit home to everyone. It’s never too late to reverse the self-entitlement perceptions of funding that is prevalent among the young African community; the best we can do, is not get used to expecting that every business has to be heavily funded externally first, for it to get off the ground.
At this juncture, it is no wonder that it seems to be easier for whites and Asians to start business ventures at an early age, whilst their black counterparts seem to always hit brick walls. Amongst most aspiring African entrepreneurs, a self-entitlement mind-set has been cultivated, that without funding, they can’t be able to get any business venture off the ground. No other explanation springs immediately to mind for this mind-set and its origins, however, most African governments have failed the young Black entrepreneurs, through creating hope among these aspirants, through various initiatives that have eventually benefited the few well-connected ones.
Although there is always scepticism accompanying any government initiative towards developing the entrepreneurship spirit, it is noteworthy, that some African governments are making small strides in trying to foster entrepreneurship on the continent. Moreover, it’s in the public domain that most of these initiatives are failing to achieve the intended goals. Falling victim to corruption, nepotism, and reckless abuse of the funds become the order of the day. This leaves the young Black entrepreneurs frustrated and disillusioned, because so many place all their hope on the benevolence of their governments. The ending ruins all enjoyment of what goes before.
This as it may, passes the onus into the hands of the aspiring entrepreneurs, to grab the bull by the horns and chart their own road maps to success. Whenever it’s possible, an entrepreneur should own businesses outright. Not that we want to promote selfishness, however, in the same vein, we want to encourage a shifting of the mind-set from a sense of depending heavily on external funding and not have the courage to build a capital base internally, step-by-step.
The Importance of Business Ownership
Outright ownership of a business means that you make all the money for yourself. It’s always awesome to have your own money at risk, and then have to live each passing day with the consequences of your decisions regardless of whether they are good or bad. Whenever you will take on the risk, the end result is to reap the rewards. Furthermore, the better you are at managing risk, the better chances you have of reaping more rewards. By allowing yourself to take calculated risks that don’t spiral out of control, you get yourself into a situation where your options will be good ones when the big pay check arrives, however, the risks should be measured, that it won’t be hard to see any realistic alternatives, because there are always several negative consequences when the penchant for risk-taking is irrational.
In a sense, it’s never debatable that some people need funding, but giving investors equity solely means the money and in many instances, control of the business isn’t in your hands. Your creativity or ingenuity will never shine when for every idea you have; you need to consult the investors, to get approval on whether that idea satisfies their investment policies. Don’t ever forget that this is your baby and if you want it to be part of a lasting legacy then you need to see it through to the end. Even if you are bootstrapping, know that it’s war out there in the trenches, and that tough times don’t last but tough people do. Therefore, your business will always get to a stage where it will be able to generate enough cash flows even without getting external funding, through proper management systems; the sky is always the limit.
For instance, because of growth some organizations reach a stage where there are no better options for raising finance rather than listing on local or international bourses. However, the most important element of which one has to be able to retain as much control of the business, so that you always get the required approval of voters to push through your ideas. Even though, due to rapid growth some entrepreneurial ventures have to list on local and international bourses, thereby diluting the shareholding, however, most times the faces of the organizations mostly have control in those businesses.
It’s a fact that you can’t control the destiny of a business, if you are like an outsider watching on. How can you have the ability to direct the culture of your company when you are a minority shareholder? You will always be influenced by the decisions of the more powerful ones. Outright ownership allows you to choose the people you work with. Decisions of hiring and firing don’t have to be consulted too much, because the most important thing is to surround yourself with positive people who can give you confidence, and the optimism you need to keep moving forward, to achieve your goals. Work with people who you know will help you achieve success.
Sherry Phelps of Southwest Airlines said, ”The first thing we look for is the ‘warrior spirit’. So much of our history was born out of battles- fighting for the right to be an airline, fighting off the big guys who wanted to squash us, now fighting off the low-cost airlines trying to emulate us. We are battle-born, battle-tried people. Anyone we add has to have some of that warrior spirit.” Hire for attitude, skills can be taught, unfortunately passion can’t. You can’t have the liberty to create your own recruitment policy with someone breathing down your neck. Like every other game, the more you play the better you get. You learn to recognize the good opportunities from the bad ones, by being in the frontline directing operations, not being directed.
Even if you have to start small in your shack, don’t despair, all these big global corporates started from somewhere, and mostly it was humble beginnings. No matter your business model, there is always space for everyone and everything, as long as you can contribute to improving people’s lives. Aliko Dangote aptly summed the opportunities inherent on the continent, in his statement below.
Unfortunately, if you are Africa’s richest person, you get mentioned everywhere, and be quoted at every given time because the serious people always have something to learn from those that have made it before them. Likewise, Diary Of An Under 30 CEO is no exception, to be the best learn from the best, and therefore we will end this week’s diary entry with a quote from Aliko Dangote.
“The opportunities are here, the growth is here. Where else do you get this type of growth? Maybe Asia, but the difference we have from them is that we are starting from a low level. The return on investment takes out the risk. Foreigners will not invest if locals are not doing so. We must lead or nobody will come. The economy of America was not established by the Chinese,” said Aliko Dangote.
By Nathaniel T. Mafemba