- FOR BUSINESS START UPS -
What is an Emerging Market Economy?
In 1981 Antoine W. Van Agtmael of the International Finance Corporation of the World Bank coined the term “Emerging Market Economy”. An Emerging Market Economy (EME) is defined as an economy with low per capita income (PCI). Such economy is at the basic or elementary level of economic development but progressing. EMEs generally do not have the level of market efficiency and strict standards in measurement, accounting and securities regulations like the developed ones. However an EME will typically have a physical financial infrastructure including banks, a stock exchange, unified currency and such other basic indicators.
Countries categorized as EMEs constitute about 80% of Global Population, such economy also represent about 20% of the world's economies.
Emerging Market can be likened to a Virgin Land, that is, an arable land which has never been
cultivated or of minimal cultivation; of course such arable land has its attendant
problems. But an experience famer will however not see these problems as such;
rather the problems are seen as opportunities.
More Characteristics of an EME
1) The challenges:
Ø
Lack of Good
Governance and Political Instability
Ø
Lack of
Infrastructures such as Communication Platforms, Good Road Network,
Electricity, Transportations, Water, Postal Services, etc.
Ø
General poverty
as measured by Per Capital Income (PCI), GDP and National Income
2) The opportunities:
These opportunities are directly as a result of the
above challenges
Ø
Minimal
Regulations and Less tax.
Ø
Several Investment
opportunities
Ø
Higher Return on
Investment (ROI) due to less competition, cheap labor, etc.
THE INHERENT ADVANTAGE FOR BUSINESS
START-UPS
The Role of an Entrepreneur:
As
an aspiring business mind particularly those opportune to be within the EME
regions. It is indeed a blessing to have come from an area of the globe with
80% of the global market (population). If EME regions constitutes a meager 20%
of world economy, it is our role to ensure that this share of global economy is
vigorously driven upward until it is commensurate our size of the market.
We
must stop dwelling on the challenge (and there are so many of them) but rather
to start focusing on the opportunities (and surely there are countless of
them), if you have not seen them it is because you have not been looking hard
enough. Opportunities abound around us no matter where you are located under
the sun.
We
must therefore, start taking
responsibility for the lack of development in our region so as to harness our
potentials, take our place in global scheme of things so as to enjoy a
proportionate share of the global common wealth. It will be wrong to think that
foreign investors will do it for us, how can we expect investors from abroad to
bring and invest their resources to grow our economy, if they do, we will
definitely appreciate but the prerogative is mainly theirs in fairness. In any
case why must you wish that others invest and prosper in your economy while all
you hoped for is employment when you can equally invest and be prosperous
likewise?
We
must never think that the EME regions or anybody is disadvantaged for there is
no such thing as disadvantage. God is never unfair and the nature (He created)
is fair to all, if men or any part of the globe is at disadvantage it is
because such people or region of the world is yet to make use of their God given
potentials and or is yet to see the countless opportunity and recourses at
their disposal. There is advantage in what we called disadvantage as well as
there are many disadvantage in what we see as advantages, look closely, look in
wards, being disadvantaged or poor is merely a perception.
The big Question is:
WHAT DO I NEED TO START MY OWN
BUSINESS AND PROSPER IN IT?
The issue of Capital over Goodwill: One of the most prominent challenge of an aspiring
entrepreneur is that of capital, many business startups would readily complain
of lack of fun, however one big irony of life is that persons of low net worth hardly
attract fun while on the other hand, high net worth individuals attracts all
kind of funds; even when they do not really need one, this is the real “VICIOUS
CIRCLE OF POVERTY”. It is a poverty circle which guarantees that the rich get
richer while the poor becomes poorer. This poverty circle manifests in divers
of ways. For some good reasons the rich associates with the rich while the poor
abhors his poor neighbors, the poor
does not have access to information that will enrich his mind like the rich so
that he can develop wealth creating ideas and when he has a business idea, he
does not have capital to start with, the financial institutions would not grant
him loan without a commensurate collateral, he is poor and does not have the
collateral so his poverty continues. Government intervention may be the only
hope here, it is the only external intervention that can help the poor out of
poverty, in developed economies of the world government policies are targeted
at gravitating the lower class of the economy towards the middle class but
unfortunately the EMEs zones does not have the luxury of good governance rather
the poor are impoverished and pauperized through corruption, lack of good
developmental plans, inefficiencies of services and the like.
THE WAY OUT
How
then can the poor break out of this poverty circle, it simply by LOOKNIG
INWARDS as said before the truth is that no one is at advantaged or disadvantaged
above others, we all are equally blessed and endowed. However, the difference
between a prosperous person or nation and a poor one is in the fact that one has
realized his potential and is exploiting it, while the other is yet to; the
onus therefore lies on such to find it fast and act on it because it is in you.
If
the poor, the young enterprising person who is desirous of starting business
cannot readily access Funds, Capital or resources what should they do?
Interestingly
and fortunately too, the term “CAPITAL” has evolved into something beyond
financial resources to include variety of things, some of these are discoursed
below.
First
you needs to make do with what is in your hand, indeed there is something you
have, these are:
A) “YOU” – YOUR PERSONALITY: Your personality is your
greatest asset, good personality breeds good business but bad personality
brings bad business. You should improve your personality in impressions,
actions and real character formation, which can be in these arears.
1. Meekness:
Being
teachable, to have a teachable spirit is opening yourself up for more
information and knowledge, it is humbling yourself. Meekness is a virtue
accessible to all and sundry. Most EME business up starter’s (like all men
anywhere in the world) aims big, the “get some capital and start my own business”
kind of mind set, but in most cases the capital never came, the help never came
not because of hatred but it is due to the theory of money and the poverty
circle explained above, simply put it is because “money attract money while
poverty beget poverty”.
The
way up is down, the steps to the top began with the lowest stair case below; to
build a skyscraper building you need to dig the foundation deeper down. YOU
MUST LEARN TO STOOP LOW, START SMALL, LOOK INWARDS AND START FROM THERE. Your
ego is easily noticed by your would-be financier. The lack of meekness to start
small is very repulsive to any one that might be interested in your idea more
so where such would-be financier start his own wealth creation from point zero.
Even much more so when the Startup did not have the experience to sustain the
level of business for which he or she is seeking financial help and
unfortunately in most cases this view is true but of course diplomacy would not
allow the would-be helper (if you would ever listen) to dare tell you to stoop
lower or that the reason you are denied Loan, grant or financial assistance is
because they considered the business or fund you are seeking as too way off
your league. But I can tell you that most times this is the reason your
financial help did not come, you need to learn meekness. Be readily open to
constructive criticisms, ideas, suggestions, instructions, knowledge and
information.
2. Your gift,
Your
talent, interest, passion or vocation, there is no one without a unique gift
peculiar to him or her in which he or she can excel the most. We all are
masterpiece in our right, each of us have no duplicate, there is definitely
something special and unique about you, find it, it is the gift of God to you,
IT IS YOUR UNIQUE SELLING POINT, it will make room for you, start by building
your business around it and soon enough financiers will be interested.
3. Honesty: Sincerity
Open
mindedness, saying what you mean and meaning what you say, saying it the way it
is without any ulterior motive. Is it not ironic? That people, organizations or
nations with huge excess fund crave for where to invest it yet there are many
people with ideas, seeking for funding but no investors desired to stake their
money on their idea. One theory of money or wealth is that it is never stable
or static, wealth is dynamic and fluid; it is either growing or depleting.
Wealth grows through investment while the lack of investment will deplete it. The
equilibrium, break even or stability point of wealth is that point where the
percentage increase, interest or Return on Investment / Capital is equal to the
percentage reduction. Increase in Wealth is majorly seen in the return on
investment or capital and interest while wealth diminishes through inflation,
taxes, fines, charges, risk and direct expenditures on consumption (this is not
in case of national income). Note that growing wealth requires a conscious
effort on the part of the owner, that is, wealth growth is primarily and largely
due to internal factors where as what diminishes wealth are largely external
factors. The owner of the assets does
not have full and direct control over what depletes his or her wealth but 100%
responsible for the decision to grow it, everyone with financial means knows
this either subconsciously or otherwise and the above reality compelled and
elicits investment decisions from the rich.
Consequently,
if you are unable to secure funds for your ideas please check the sincerity
content of your business plan. Investors, the rich are not fools else they
would not have been that wealthy and do not forget that they are well equipped
with years of experience, yours is probably not the first of such business
ideas that they have been introduced to or hearing of. Merely hearing you or perusing
your profile and or business plan they can read between the lines and see
beyond your oratory prowess and the fine grammatical constructions in to your
innermost thoughts.
Never
forget that foreign investors are waiting on the wings for business partnership
with us at the EMEs but their impression (erroneous or otherwise) (might be)
that we are dishonest people prevented them from committing their hard earned
wealth in our economies.
4. Integrity: Credibility – reputation and goodwill:
One
of the major perceptions about the EME regions of the world is that of
corruption, it has been assumed as one of the characteristics of the developing
economies / regions of the world, while this might be a fact yet the truth is
that man is generally corrupt whether in the developing as well as the
developed economies of the world. However corruption is not much of a
developmental hindrance in the developed economies hence they have been able to
attain relative economic efficiency. Therefore the EMEs must accept the fact
that there is urgent need to improve on our integrity level, since it is
inhibiting foreign investment, economic growth and developments.
Your Integrity is your reputation, it is your
credibility, it is your trustworthiness, it is your goodwill. Goodwill comes by
experiences and recommendations. Therefore build you business ideas around your
most valuable experiences and where you have strong recommendations. Your
would-be investor and or partner(s) will surely need it to enhance their trust
in you.
5. Excellence:
Perfection
is a major enhancer of presentation, cross your “t” dot your “I” run through
over and over your process and presentation, days before the actual presentation.
But beyond preparation for presentation, excellence is a virtue we must all
have, it should be our way of life, if you do not have it, it will be difficult
to give what you do not have when it is demanded of you, most especially when
you are an “upcoming”. Let your life of excellence be noticed from afar, who
knows, it might make you the most preferred.
6. Faith, Courage in Adversity / boldness (audacity)
You
must have faith in your ability, be convinced in yourself because if you are
not , you will not be able to convince anybody, you must be bold and audacious
else it is impossible to confront the mountains of life’s challenges, talk-less
business ones.
7. Hope and Commitment:
In
Vincent Thomas Lombardi’s word ’’Winners never quit and Quitters never wins” Vincent Thomas Lombardi was an American football coach
and “commitment above convenience” Bishop (Dr.) Mike Okonkwo (MFR) – He
is the presiding Bishop of “The Redeemed Evangelical Mission – TREM.
Breaking
through in business and generally in life is not for the faint hearted or
feeble minds, you must keep hope alive, never give up on yourself or your ideas
more so where all indications point to the fact that those ideas are genuine
ones. Never quit, be ever committed to it even where it is not convenient to do
so. If successful people wholly and truthfully share their experiences before
they became successful with you, your heart will melt. The road up is a
herculean task but if others have climbed to the top I have no doubt that you
too will get there if you persist.
The
challenge with up starters is that they are unable to persist for long, you see
them mutating from one idea to the other and at the end of the day they ended
up in confusion and I doubt if anyone will be ready to invest funds in a
confused person.
THESE
ARE YOU ASSETS, THE “CAPITAL” YOU HAVE: The virtues discoursed above forms your
core values, they constitute your personality, and they form an aura around you.
This aura is measurable, perceivable, quantifiable, and in fact visible and
audible; it is a major determining factor in people’s perception and or opinion
about you. You must therefore strive to improve on yours, you surely do not
want to stand before a panel of investors or even job interviewers and anybody;
for that matter, with your aura saying; caution! Caution!! Caution!!! Where
that happens you will surely not get the fund or job at least not on that
sport, maybe later God helping you all other things being equal (but other
things are never always equal).
OTHER
FACTORS TO CONSIDER: Let us now consider few other equally important things
inhibiting investment in you, though these are not your direct personality
traits yet they are indirectly related to your persons.
1. Business Plan and Proposal: Measurable in terms of
Time, People and Money
Habakkuk 2:2 And the LORD answered me, and said, Write
the vision, and make it plain upon tables, that he may run that readeth it.
A
problem of most visioner is to think they will have to be the one to also run
with their God given ideas but this might not be so in most cases somebody else
may be able to run faster.
Your
business plan is not just a write up to convince investors or readers of how
wonderful the business idea is; rather it is an empirical survey detailing the
workability, feasibility, profitability or otherwise of an intended business
venture. It is a scientific exercise to prove to yourself that that the
business idea is worth doing or otherwise.
Business
plan can be done by anybody but it must be professionally done to meet certain
statistical, financial, accounting, costing, managerial and to some extent
legal expectations.
Business
plan must exhaustively cover all problem areas of the business and the intended
remedial action to turn around such challenges.
Looking
through your Business Plan a major area of my interest would be how well you
are able to see the inherent challenges, problems or limiting factors of the
business and your proffered solution for overcoming them.
An
unseen problem will probably not be budgeted for and will slow or out rightly
bring down the business, do not be not deceived, there are mammoths’ of
challenges in business, they come at you like mighty rushing wind and never
stops, they have and are bringing down businesses of good standing how much
less a new one and a new one where the business challenges was not well
prepared for.
It is a globally fact that, close to 8 out of every 10 new small businesses failed within three years of operation, a higher percentage is to be expected in the EME and Developing economies, there for everything practicable should be done to move your business out of the failure rate starting with your business plan. Most Small and Medium scale enterprises (SMSE) failed way before starting, merely looking at the personalities behind such business and the business plan one can readily tell that the business will not fly talk-less of going far.
Your
business plan must be well thought out and articulated, it must be simple and
as concise as possible
PRESENTATION
OF YOUR BUSINESS IDEA: Your plan must cover the following area.
®
Over view,
Feasibility study, Profitability survey, 3-5years financial projections and
your personal profile.
®
Review / overview
of the global economy
®
Review / overview
of the local economy
®
Review / overview
of the sector and sub-sector of the local economy relating to your business
®
Review of previous
written works on that line of business or related businesses.
®
Review / overview
sample of existing company in that sector and sub-sector of the local economy
relating to your business, highlighting their ups and downs.
A
good business plan must answer
1) Is this business viable
2) Is it profitable
3) Is there ready market for it
4) Is it legal
5) Who are the competitors
6) What is the initial capital requirement
7) When can it pay back
8) What is the rate of Return on capital
9) What are the prospects for growth
10) etc
2. People: Relationship
Keep
talking to people, Share the idea with people
Proverd 29:18: Where there is no vision, the people perish: Bishop
(Dr.) Mike Okonkwo (MFR) always says that “where
there is no people the vision also perish
Another
problem of most visioner is that they want to share all the glory and they feel
that people will steal the idea but the idea you think is new to you is all
over the internet. There is nothing new under the sun. In any case which is preferred,
A stolen idea that benefit humanity? Or an stolen idea sealed up in the grave.
3. Sacrifice: Be ready to do it free.
If
no one is ready to take it free, no one will likely pay for it. Doing it free
is the easiest and cheapest way of conducting a test sample of your business
plan, it a form of visibility study.
Exodus 4:1-5: Cast
it on the ground, can you do same as Moses?
Ecclesiastes 11:6: In the morning sow thy seed, and in the
evening withhold not thine hand: for thou knowest not whether shall prosper,
either this or that, or whether they both shall be alike good.
Proverbs 11:24: There is that scattereth, and yet
increaseth; and there is that withholdeth more than is meet, but it tendeth to
poverty.
Matthew 20:6-9: And about the eleventh hour he went out, and
found others standing idle, and saith unto them, Why stand ye here all
the day idle? They say unto him, Because no man hath hired us. He saith
unto them, Go ye also into the vineyard; and whatsoever is right, that shall
ye receive. So when even was come, the lord of the vineyard saith unto his
steward, Call the labourers, and give them their hire, beginning from the last
unto the first. And when they came that were hired about the eleventh hour, they
received every man a penny.
THE
BEST WAY TO MAKE MONEY THISDAYS CAN SOMETIMES BE FROM RENDERING FREE SERVICES. e.g
Internet activities, etc.
Look out for a sequel which will be - FOR INVESTORS -
Thank you and best of luck
Look out for a sequel which will be - FOR INVESTORS -
Thank you and best of luck
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