What 25 years of running businesses has taught me
By Peter Muiruri | May 20th 2020
Joanne Mwangi-Yelbert, the founder and CEO of PMS Group Africa, has sat in more boardrooms than she would care to count, birthing businesses and making or negotiating deals. She shares with Hustle the key lessons she has picked up along the way.
1. Take risks – but don’t run in blind
Risks are a part of business and it would be unwise not to expect them. As the saying goes, ‘no risk, no gain’. If you don’t take risks you will end up working for people who do. That’s why picking the right investment is important. As an investor, I must do my due diligence. I never run in blind. Use reliable facts and history to lower the risks. Work within your personal risk appetite without rushing into high-risk ventures.
2. Want to impress potential investors? Own the table
If possible, send a teaser beforehand with just enough to arouse interest. And then show up prepared. Investors want to feel they are dealing with someone who understands the market and critical business metrics. Anticipate questions and concerns that might arise, and devise effective answers.
It helps to know your numbers, for example, how much capital there was beforehand and how it was used. This will fuel investor confidence in your business.
The icing on the cake? Highlight your strengths and how this will translate to handsome returns.
3. At the negotiation table, speak less
First, never underestimate the other party’s intention to sniff out your true intentions. Listen more and talk only when you have your facts. Anything negative will be a red flag. So, I focus on the win-win formula.
Next, respect the relationship rhythm as pushing too much can tank the whole negotiation. Sometimes a pause can be a very powerful tool.
4. What to do with business profits?
I believe in diversifying my portfolio, but at the same time, I heavily reinvest in my business to catalyse growth. Reinvestment can create exponential growth, so I weigh my options on a case-at-hand basis.
Some investments will tumble, no matter how much diligence you do, so I use them as learning opportunities. To cushion myself, I set a maximum amount to pump into each investment before calling it a day.
5. Always start a business that solves a specific problem
You may have heard this many times, but it is the truth: always identify the market gap and do extensive research on that industry. A business must fill this gap and grow into an established brand. For example, as we navigate the current uncertainties, consider what people are no longer spending money on.
Where is that money being directed to and what can you do to direct it to your hustle? And then develop a business strategy and seek finances to cushion your business.
Finally, be patient, success is not borne overnight.
6. Always have a crisis plan
One thing you learn about business very quickly is that crises are unavoidable.
Making your business self-sustaining is like the second round of boxing – tougher but you are already warmed up. A single business strategy cannot account for every turn the universe takes, but have a counter-measure for unavoidable circumstances such as Covid-19.
Have a risk mitigation strategy or crisis plan, or rapidly create one when caught flat-footed.
In short, remember these three traits of a sustainable business: embrace change, create a value proposition and specialise in your niche.
7. How you treat your customers is key
Grow your business with those who give you business. It takes weeks or months to find a customer, but a second to lose one. Ensure that your customer feels valued and go the extra mile when you can.
Nurture your customers and stay in contact with them at all times. Find out what your customers are saying about you and look for opportunities that appeal to your target market. The greatest asset to growing your business is a loyal customer, so make your business about them.
Additionally, before you make a deal with your client, you agree to certain terms and conditions on top of proposed services. Trust leads to loyalty.
Strong relationships are built around making the other person feel important. For example, be punctual at all times, conform to their work style and remember to keep your commitments. Listen and understand where your client is coming from, as this will give you the leeway to deliver.
Always communicate clearly and openly with your client. This will allow both of you to work efficiently and forge a higher level of trust.
8. Don’t make decisions based on the consequences, but rather on the benefits
First, I need to know what I really want. What is my end goal? Will the business offer be satisfactory? If I am not sure, then I seek advice from peers or those with enough experience in the same industry.
In the decision-making ladder, decision review is the last but most crucial step. Before making a decision that will impact the business, it is good to know there is always an additional option.
In reviewing the decision, don’t look for the one with the least consequences but one that works best. Assess and reassess the information at hand, and make sure you understand it fully.
9. Find and keep your A-team
Every ship has a captain and crew that tend to the ship. The ship is your business, you are the captain and employees are the crew. Look for those you can trust to get the job done, not ones you will micromanage as this could ruin your relationship with them and lead to low productivity.
On the other hand, create an environment where any employee can breathe, even under water. Such employees will be fond of you and your business and will be loyal.
10. Delegate, but do not abdicate your role
Delegation is an important skill that should not be feared. To know when to delegate, I consider if the person is capable of effectively doing the task in terms of his or her skill, knowledge and current workload.
Delegation can be used as a learning opportunity for low-level managers and a key factor to determine the next business leader. Remember though, delegation is not abdication. The buck still stops with you.
11. What is the secret to retaining your customers?
Know your customers and value their opinions. The customer is always right. Customers like to be heard and to feel their opinions matter. Make it easy for them to communicate with you. Customers will always run away from shoddy work and products. If you don’t deliver, you lose. Also, looking and acting unprofessional will make you lose business. Impressions matter to customers. Play and look the part.
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