Tuesday, 12 February 2013

Don’t Go Missing in the Market

When preparing a business plan for fresh Start-Ups, I often ask the following questions:

  • What do you know about the industry you want to enter?
  • Who are the players in the industry?
  • What is the current trend in the industry?

Simple questions you may say, but I have never received a direct and confident response from any of them. Many people are certain that they will succeed in business because they have the money or they are very passionate about what they want to do. However, in today’s ever changing world, money and talent are not just enough for you to be in business, you need a mental compass of where you are going, those that you will be up against, what advantages or challenges you are likely to face so you don’t get swallowed or missing in the market. Only an industry analysis will provide you such information.

Many small businesses are actually missing in the market because they underestimated the need for proper industry analysis. Industry analysis is not about knowing your customers or audience but its about knowing other competitors and what they are doing. A good industry analysis -

  • helps you to identify the un-served market;
  • identifies a segment you can profitably serve;
  • identifies a niche that is tangible;
  • helps sharpen your business focus;
  • strengthens your strategy;
  • exposes the weaknesses of your competitor’s strategy;
  • identifies the best market entry mode for you;
  • tells you what type of pricing method to adopt;
  • makes your product or service significant to your audience;
  • and shows you at what level you can comfortably do business without suffocating.

Unfortunately, many have failed to analyze the industry very well hence their lack of presence in the market, and the struggle to get notice by the consumers. They had no idea of the intensity of the competition they were likely to face, unsure and unclear about the market segment, displayed low quality competitive edge, and more importantly, failed to identify the variables that will best differentiate their business.
You can’t compete in a battle when you don’t know your opponents
You need to identify companies your business cannot challenge yet in the market, and strategically avoid direct competition with them. Understanding your industry, its players, current technology and the industry trend saves you the embarrassment of being in the market and yet no one can find you.

Analyze your industry before you make a move so that you don’t get missing in the market.

Nigerian Government reduces cost of Business registration

The Federal Government has approved the downward review of the cost of business registration at the Nigerian Investment Promotion Commission (NIPC) from N50, 000 to N15, 000. This was made know by the the Minister of Trade and Investment, Olusegun Aganga. The downward review was designed to make Nigeria highly competitive in line with international best practices, and at the same time, lower the cost of doing business in Nigeria.

The NIPC was established to promote, encourage and coordinate investment in Nigeria, they are also mandated to register and keep records of all enterprises with foreign equity participation.

All investors both new and existing are encouraged to take advantage of this gesture to ensure that they are dully registered with the commission in line with Section 20 (1) and (2) of the NIPC Act.
Failure to do so is a violation of the law. “The section states that an enterprise in which foreign participation is permitted under section 17 of this Act shall, before commencing business apply to the commission for registration and the commission shall within 14 days from the date of the receipt of completed registration forms, register the enterprise if it is satisfied that all relevant documents have been duly completed and submitted or otherwise advise the applicant accordingly.

Culled from ChannelsTV - http://tinyurl.com/btkdb6y

Monday, 11 February 2013

Doing Business as an Under-Dog

On 10th February 2013, the Confederation of African Football concluded its 29th edition of the tournament tagged: South Africa 2013 (AFCON 2013), which the Super Eagles of Nigeria won for the 3rd time. Beside the intrigues and excitement that is associated with the competition, there are a few lessons small business owners can learn in order to boost their competitive edge in the market. Nigeria was the under dog in the competition, but the lifted the cup. No body gave Burkina Faso the opportunity, but the got to the final.
In business, nobody will give the chance to succeed. You have to fight your way through knowing that you can only be celebrated when you come out victorious.
In today’s business,

There are really no under dogs in business any more
Nigeria and Burkina Faso that played the finals of the tournament were they under-dogs; in fact nobody gave Burkina Faso the opportunity of qualifying from the group stage let alone making it to the finals for the first time. Both these teams were resilient, determined and courageous to fight even the favored giants. Burkina Faso eliminated Ghana; one of the favorites, while Nigeria played passed Cote d'Ivoire to reach the finals.
No matter the industry, never consider your business too small to face the giants. Most big businesses were some day small also.

Businesses Strives on new resources
What separate failed businesses from surviving ones is simply new resources. These resources could be in form of new ideas, new technology, innovation, new opportunities. In the tournament, we saw the injection of new locally based players, indigenous coaches, new foreign players and exceptional skills. Every business is supposed to re-invent itself as regularly as the industry changes. Survival is not a matter of capital alone, it’s about the new resources you are introducing into your business. You cant keep trading on old ideas when the industry has adopted a new one.

Even the Big businesses have weaknesses
All the big businesses in any industry have a measure of weakness. They know, you may or may not know, and they don’t want you to know more about it. Many of the big businesses have weaknesses that money cannot solve. The big businesses make you feel that your biggest problem is capital, but consider it, most big businesses also started small in an industry where the big businesses dictated the trend, yet they survived. Nigeria exploited the weakness of Cote d'Ivoire by caging there super players like Didier Drogba, Yaya Toure and the likes. Learn to trade on the weakness of your competitors, and soon you will take over the market.

No team wants to be a spectator
No team comes to a competition to be a cheer leader. Every team wants to win and become champions. Like wise, no business exists to watch others succeed. See yourself as a competitor, not as an under dog. Does that succeed, do so because they believe they can, they have the determination to do more, and the courage to face any challenge.

Nobody has the monopoly of success, if your vision is strong enough, and you are focused on your goal, you will always come out successful.
No matter how small your business is, or how tough your competitors are, you can always win in business even as an under dog.

Friday, 8 February 2013

Is Franchise really better than Traditional Small Business?

-         3 Executives speak on the advantages of franchising?
Sacramento Business Journal outlined what they considered as the 3 major advantages of franchising as identified by three executives who are experts in this field. These executives identified what they considered as major advantages of franchise business over traditional small businesses. The advantages are:

  1. Established and reputable franchise systems have a proven track record. A strong support system is a major contributor to the franchisees’ overall success and satisfaction.
  2. The likelihood of success. Quality franchisors have proven business models for franchisees to follow. 
  3. They are buying into a proven business model. Their role starts at the implementation stage, not the invention stage

No doubt, every business entry strategy has its own pros and cons, in fact in terms of start-up, franchise seems to have an easier mode of entry, than traditional small business however, franchising business is not as advantageous as they have been presented. In fact, they have similar failure rate as small businesses. Purvin, who is also author of The Franchise Fraud: How to Protect Yourself Before and After You Invest, studied franchise businesses for over 20 years, and he came to the conclusion that  franchised businesses fail at a similar or even higher rate than small businesses. One of the factors responsible for this includes their higher start-up costs and operating expenses to meet brand requirements as well as royalty burdens.
Considering both, buying the franchise of a reputable brand, is not a guarantee for success just as starting up a small business does mean profitability. Franchisees work as much as traditional small business owners in making their businesses a success. Brand recognition, excellent training programs, and outstanding support for their franchisees although good, can never take the place of developing a unique strategy for success. Most franchisees that have relied solely on the support from parent companies, may never satisfy their unique customers. Cari Lyn Vinci, a franchise consultant noted that buying a franchise doesn’t guarantee success; it is only a road map to a destination.
So for franchise experts, giving the impression that franchise businesses are likely to succeed more than traditional small businesses is playing a fast one on entrepreneurs. One thing is sure; very few franchises are as successful as the parent company. Location and other strategic variables play an important role in any business, and not every successful business model can fit into every business location or work with other strategic variables that a franchisee may consider.