How To Turn A Small Business Into A Big Business
How To Turn A Small Business Into A Big Business.
“The difference between those people who are good entrepreneurs, and those who are great entrepreneurs, is the capacity to build and manage an organisation, that is effective, efficient, and innovative, even as it gets bigger and bigger, and bigger.
“How can you turn your small business into a big business?”
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I know you have a big dream, and a vision to see your business become a national champion, and then probably a regional champion, until it is a continental champion, until ultimately it is a global brand with offices around the world. Yes, it is possible and you can definitely do it.
One of the things I have learnt in life, is to avoid prescribing formulas. And I know many people would like to be given a formula. I learnt that people who cram formulas are destined to fail. The ones who succeed are those who grasp principles, from which formulas are derived. I am going to teach you principles; some of which will surprise you. Some of them, will challenge what you have been taught, or have come to believe. I hope you will have an open mind, and where necessary the courage to change somethings.
A company like Walmart, which is owned by an American family, has more than 2m,
“How is it possible to build and manage organisations of that size?”
first understand Entrepreneurs are a unique breed of people. While some people sit and fantasize about the glamour of being their own boss and creating their own business, those in the thick of business ownership understand that even considering all its rewards, entrepreneurship is a difficult and complicated path.
The world’s most successful entrepreneurs aren’t the ones who impulsively quit their jobs to chase a get-rich-quick idea. They are the ones with an entrepreneurial mindset – a set of perspectives and values that allow them to achieve greatness. These perspectives are different ways you’ll need to have or develop if you’re going to be a successful business owner:
1. First Things First: Get Organised
Time is an incredibly precious commodity. All these things that you want to do, are simply not possible, if you are not conscious of the need to account for time. In studying the lives of America’s founding fathers, I came across the “13 Virtues”, which one of them, man named Benjamin Franklin, wrote himself when he was only 20 years old.
Virtue 1. Industry. Lose no time; be always employed in something useful; cut off all unnecessary actions. It really does not matter what your vision in this life is; whether it is “for profit”, or for “great welfare of mankind”; you cannot accomplish it, if you are not organised. Make it your personal mantra, to always try to be organised and efficient. This is at the core of productivity.
Even if you are a hard worker, you will get less from yourself, if you are not organised and efficient, in how you approach things. There is so much you can accomplish, if you are highly organised, and it is a fundamental building block, to organizing others. Being organised is not just a declaration of intent, it must be followed by action. And you must invest in those things that make your more organised and efficient, as a person.
2 Study how organizations are built and managed
How does one build a BIG company, like Walmart, which has a turnover of nearly $500bn, employing over 2 million employees?
This company is bigger than the economies of nearly all the African countries, and has more workers, than many countries! One of the first things, I realised was the
importance of learning how to build, and manage an organisation.
…No matter how great your business idea, no matter how smart you are, no matter, how innovative you idea, no matter how much money you raise: If you do not know how to build, and manage an organization, you will either fail, or you will never be able to realise your dream. The difference between those people who are good entrepreneurs, and those who are great entrepreneurs, is the capacity to build and manage an organisation, that is effective, efficient, and innovative, even as it gets bigger and bigger, and bigger.
“This is not something that comes to you naturally. It is a skill you have to acquire, through study and practice.” Whenever a business fails, if the truth be told, this is 90%, of the reason for the failure. Unfortunately many people never even realise that this is their problem. They might even get angry, if you suggest that this is the problem.
You can only solve a problem, when you realise that there is a problem…. For those who do not accept they could have such a problem, this is not for you. I’m talking to people who want to turn their businesses, no matter how small they are today, into big, big, global companies…like Walmart or Apple.
3. Management is the X-Factor
The size of the business that you run, is dependent on your capacity to build and MANAGE, an organization. We can talk about vision, we can talk about entrepreneurship, we can talk about innovation… we cantalk about all those things, and more. But if you cannot manage, it will come to nothing… At best you will start something, then someone else will see it, who really knows how to manage, and they will go off, and make a success of it, while you watch.
Sometimes, it will seem like you are destined to always be small. Not true… See those huge organizations, we were talking about, like Walmart, Toyota? They are big because they have highly skilled managers, who know how to build, and operate complex organizational structures.
Being an entrepreneur, full of great ideas, and innovations is not enough. You have to become a skilled builder and manager of an organization. You have to be able to attract skilled managers, who know how to execute the vision you have, in a competent and disciplined manner. To make a success entrepreneur. You have to become a leader and a manager of a business. And these two are not the same. “Don’t just rely on getting experience; study.” the best in the world. If you do this, you can take practically any idea, or any organization, and make it big. This is not rocket science, but it is science: it is not something you are born, with, it is an acquired skill.
4. Know and Practice how they made it
The founder of Walmart, started what we would call today, “a flee market”, and yet he turned it into the world’s largest company, by sales, with annual revenue of nearly $500bn. The guy who built McDonalds began with what we would call a “hamburger joint”; and as someone said recently, even today, anyone can make a better hamburger than McDonalds, at home (certainly one that tastes better!), and yet it is a $30bn sales, global business. There are three fundamental points, I’m trying to convey to you, turning a small business into a big business:
1. It really does not matter what business you are in. You need to get out of your head the notion, that there are areas that make more money than another.
2. Building a big business, is a function of management skills: yours, and those you manage to bring around you. It has nothing to do, with how small you start. Be “management conscious”.. Remember, I said earlier, “it is the X-Factor”!
3. The capacity to invent something is a great blessing. If you are able to invent something, and patent it; this is really great, and you must be applauded. In business, it is not all you need, and it may not even be enough. What you need is to develop a capacity to be “innovative”; even with the most mundane things around you:n These are the guys that take a “hamburger joint”, and turn it into Mc Donald’s; a coffee shop, and turn it into Starbucks!
– Can you be challenged to look at a Kombi (Matatu), and find a way to create an “Uber” (one of the fastest growing businesses in the world today)?
– Can you look at a corner kiosk and visualise it, as a Pan African retail business?
– Can you look at the waste in your city, and imagine yourself, creating a business, that will be a global giant? Some of the most successful, global giants, began by collecting rubbish. And today, they have gleaming offices, with tens of thousands of employees… But they are still rubbish collectors.. And making billions!
5. Apply the Toolbox Principle
Like my business mentor, Strive Masiyiwa, he said, Like most young people, starting out, my first car turned him into an amateur mechanic; he spent a lot of time fixing it! In my “toolbox”, there were about 20 “spanners”; each with a number. Here is a principle he extracted from those spanners, about managing a business, with lots of people:
Imagine if every single person, who works in your organization has a “toolbox”, and in that tool box, are exactly the same number of spanners. From the chairman to the cleaner, everyone has a toolbox, with exactly the same number of spanners. The only difference is that the numbers on each spanner are uniquely different for each person.
Whatever needs to be done, requires a spanner, and only one person has the exact spanner required. If the wrong person tries to solve a problem, then they will end up using the wrong spanner. The only way you can use the wrong spanner, is if you turn it into a hammer!
Find the person with the right spanner and tell them to deal with it. The more skilled we each become at using our spanners, the more effective we are. The more we realize that each person has equal worth, and equal opportunity to solve problems and contribute, the more effective our organization. The more we are conscious of the need to always appreciate that the person who has the the right spanner is the best person to provide a solution, when a challenge arises; the more effective we
are as an organization.
Being the boss does not mean that you are the best person to solve every problem.
Sometimes being effective simply knows who has the right spanner. Recruiting and training the “mechanic” and giving them room to work, is key to success.
6. Relax: it’s not that difficult to give-up, except you really want to
The Toughest Challenge Ahead Of You, Is Building An Organization.
In an interview, the late Steve Jobs, of Apple, was asked what was the most challenging thing that he had faced as an entrepreneur. The interviewer, who told the story, says he was expecting Steve Jobs to tell him that, it was developing one of his iconic inventions such as the Apple computer, or the iPad, or iPod, or iPhone, but that is not what he said:
He said the most challenging thing, he had to do, was “to build an organization”……
…..I completely agree with him! Having a great product, or unique invention, that the world has never seen before, is not enough, for you to succeed. You must be able to build an organization, and to manage it as it grows. You need to focus your attention on, if you want to begin to turn a small business into a very large and successful business, with continental and global reach.
It is your responsibility, to go out and get the skills, in this area. You are not born, with an ability to manage. As I have also pointed out, don’t assume, it will come through experience, over time…..even those who are “experienced”, need to continuously study, otherwise their methods, become obsolete, and even harmful, to the business enterprise.
Entrepreneurship is multifaceted and constantly demanding, and there’s no shortage of pitfalls that could disrupt or destroy your business. Successful entrepreneurs are aware of this, and they’re aware that everything — from product development, sales and marketing — requires significant effort to achieve success. Instead of looking for shortcuts, they’re pouring effort into their business at every opportunity, and when they reach one goal, they’re already busy planning another.
7. Your Organization, and it’s Brand
When you start out in business one of the most important things that you must do is to choose a good name. This is something you and your partners should do very carefully:
It must be original, as far as possible;
Have the ambition to make it global… Think ahead to when the company is no longer just in your country but has gone to other countries__ will this name you have chosen still be good?
Keep it simple, clean and effective. Getting professional advice is very important. Don’t take names and logo designs as something you just prepare yourself:Getting professional advice is very important. Don’t take names and logo designs as something you just prepare yourself:
Having a good name for your company is not what gives you a “brand”. This is a highly complex subject. For a start just remember that when you register a company, it becomes a “legal person”, which acquires a unique personality and characteristic just like a real person. It’s amazing how first that personality mirrors the founder, and in time also its workers.
Advertising and sponsorship of events like this NBA game is one of the ways we try to promote and give visibility of our brands. Big companies spend billions of dollars. You don’t have to be a billion dollar company before you invest in the visibility of your brand.A good entrepreneur must understand marketing of not just products, but also the values of the brand. If you are serious about building a business,then you must have budget for advertising and promoting your brand and it’s values. This is not just about advertising to sell a product.
You must be careful what you associate your brand with. Before we agree to sponsor anything for instance, you sit down and enter into written agreements which cover the expectations of either party, as well as expected conduct. For me if someone does not respect an agreement or undertaking I will never do business with them again.
8. “Continuous” investment
The super-rich entrepreneurs you read about in the news usually didn’t get there because they randomly stumbled upon a great idea. They got there because they poured years of effort and passion into a good idea, and eventually their efforts paid off. Imagine if you bought a nice cow, and it produces a lot of milk, but all you do is milk it, but you never feed it… What would happen?
I know it sounds strange, for me to say this, but there are a lot of people, that actually do not invest in their businesses! They have big expections with no investment to push the business forward. There are people with factories, that never bought new machines, or carry out regular maintenance on those they have, until they break down.
They are many, many businesses, that simply do not invest sufficient resources into developing new products, or expanding their capacity. Now, that I have mentioned it, just look around at businesses, that you know in your community, and ask yourself the question:
“Do they have a policy of “continuous” investment, in their business?
No matter what business you are in, and no matter how small or mundane, the activities, there must be “continuous” investment in it. A successful business, is one in which the owners, are constantly ploughing back the “majority of the money”, back into the business. They must be constantly investing to create new services and products. They must be constantly pushing to improve what they have.
Every single day, you must be thinking what you can do to improve. If you think
about what what I am saying it does not really just apply to businesses. It applies to everything, even the public sector. It applies even to NGOs. This is a challenge to any of us, particularly those in business:
We must invest “continuously, and incessantly”.
According to Strive Masiyiwa, He said, “Personally, whenever I meet investors, I always tell them, that I try to invest as much as possible back into the business. If they are just looking for short term profits, then, I am not their man. The interesting thing, is that those who really understand, expect it, and invest. When I consider buying a business, one of the key things, I look for in their financial statements, is to establish how much they have been investing in the business, both to maintain and improve what they have, and also to expand.”