Business Support Systems: The Stake

This blog post is a semi-continuation of the Money tree series posted in late July.

Please make reference to that post if you are to get a full picture of what I am discussing today.

There are certain business systems that are efficient in production and output, but they in their very nature face some serious challenges in standing on their own.

When starting up business, it is usually expected that a certain level  of reinvestment or recapitalization of the business will be necessary. It is critical to realize that sudden changes, or the natural progression of the business will require you to invest time, physical and financial resources into the business.

This may be due to the fact that, the business may expand much faster than what was expected, requiring a growth in the capital requirements of the business than what was originally foretasted.

The advantage of such things is that once a business is operational, there is a bit more substance to it and obtaining financing through external investment becomes much easier than when a plan is just on paper.

I have personally felt this pinch with one or two excellent plans that have been well researched but requiring a certain level of start up financing. Especially when you are  a new venturer and everyone else is looking through your portfolio seeking your prior achievements before they can surrender their finances into your hands.

But once a business is operating, even at a small scale, it bears testimony to what it is capable of, and income cases, through due diligence and cash reinvestment, minding cash flow management there is a very high chance that the business may even be able to recapitalize itself.

It may do this even through the acquired goodwill, that increase its value over and above the actual physical and financial asset value it has in its portfolio.

An example of a business system that may require extensive levels of recapitalisation that may take even decades to recover but will definitely be worth it is mining. Substantial amounts of assets have to be bought before production can commence. In cases such as oil rigging, billions may be invested at regular intervals even as the business itself is generating a sizable cash inflow.

However, care has to be taken that recapitalization does not become a perpetual occurrence. A good system is one that ensures that there comes a point when the business reaches maturity, and becomes stable enough to stand on its own and even provide a support base for other expansion plans of businesses in the portfolio of the owners.

Investment in other people’s businesses is also useful because as my mentor always says, “I am not  the smartest person in the world.”


Dormant Seed Part 3: Vigilance

A shelved business is only alive as long as it remains in the heart of the business principal. It is simply not enough to have a business plan sitting in the desk drawer or at the top of the closet gathering dust, and being chewed away by the moth of life’s challenges.

A plan has to be regularly visited, reread, restructured if neccessary and revised for errors, constantly being updated so it remains up to speed with changes in the environment.

We live in a volatile and not static world. Everything is always rapidly changing. If you forget that you have a plan that is sitting in the closet, you may wake up one day to realise your plan has been eaten away and were there was a potential million dollar industry, lie ashes and dirt.

Some seeds can remain dormant for long periods of time to such an extent that those observing may think that they are dead. I know a powerful businessman who has had their business lying dormant for over eight years, but every other day, he always speaks of it, reminding himself and those around him, that even though there may be no activity on the ground actually signalling the birth of the business, Its birth is imminent in the womb of those that it was planted in.

Opportunity is only useful to those that are best prepared for it. However preperation does not end in a simple document, preperation is keeping the fire that brought the business plan alive burning.

A fire remains burning so long as it is poked, disturbed and added logs onto. Then it burns with ferocity and consumes all around it. If a business that will create a footprint is to be born, it has to have that same level of resistance to dormancy as the fire, the lower it burns, the closer it is to being put out.

Business Implementation: Dormant seeds (Part 2)

Some business plans are excellent, but due to various factors, it might not be practical to implement some of them at certain times. Factors affecting this may include, the financial or physical disposition in terms of the originator’s time and resources.

One person once said that “the worst thing that can happen to a person is for him to become successful before he is ready”. It is not the actual resources that determine whether a person will succeed in any given venture or not, because resources in nature are temporal in that whatever is in this earth will pass away.

If you take this into account, then it is easy to realize that conditions or micro climates as those in a greenhouse scenario can be created in order to suit the needs of your business.

The successful implementation of a business model depends on the drive that the initiator of the model has. In the bible there is a king that was asked to thrash the floor with an arrow, instead of thrashing the floor several times signifying  the assault on his enemies, he did it only thrice and as a result he realized a victory that was way below the capacity that God had intended upon his life.

The same thing applies to the successful implementation of business models in our lives. We are all equipped with knowledge in certain unique, and sometimes not so unique areas of business, but it is important to note that we each have our own unique way of doing sometimes even the same things.

That is why in life some people realize more successes than others. It is the degree to which you implement the plans that are sown into you that determines whether you will succeed or not.

Usually, timing is useful but it does not constitute the total success or failure of the venture.

However, some models are heavily dependent on certain laws and circumstances for example the money market in Zimbabwe in the late 2008 period was a total disaster with investment in it at that time virtually impossible.

Fund investors reliant haevily in this sector were badly impacted, but this was a temporal scenario, with the introduction of multicurrency trading in Zimbabwe leading to an improvement in the trading conditions.

Business Implementation: Dormant Seeds (Part 1)

When should I shelve and when should I implement a business model? That is the question. Shelving and dumping are not synonimous, but if you are not carefull, the line inbetween can become very blurred.

There is no single universal business strategy that works for each and every applicable project that you set out to do. Methodology, conditions and external influence are continually dynamic and even people grow, mature and have a change of heart.

In the plant kingdom, seeds vary in their nature, operation and characteristics. Some seeds live a relatively comfortable lifestyle, they are designed in such a way that they easily break down and grow into plants in a very short time period.

They are not very resistant to harsh conditions and any deviation from their richly nourished lifestyle will cause them to wilt and die.

There are some businesses that are heavily reputation and relationship based, for example, a doctor’s surgery, banking, lawyer’s firms and consultants amongst many others.

A lot of the business this segment depend less on the actual physical value of the business as much as the perception that people have of the owner/manager. 

That is why it is possible for a firm to be branded in the name of a person and prosper even though the actual person handles less than even five percent of the actual business of the firm.

People rely on the firm and the brand that covers it and will trust in it so long as the reputaation of the brand owner remains consistant.

However, if management, particularly the actual brand name owner is involved in any scandal wether business, personal or other, the firm will be dealt with a deadly blow that may at times even prove fatal.

Those who are in Zimbabwe are very familiar with the scandals surrounding various organisations such as The ANG and several banks and financial institutions.

The relationship that exists is that of trust, and if the clientelle feel that the brand is not trust worthy or likely to deviate from the expectations, they will abandon the firm for other “more trustworthy” firms.

So care always has to be taken on how the owners/managers handle themselves in and outside of their work/business practice. Implementation and growth in this case depends far less on actual physical resources but on the repuatation that the owners/managers have amassed over time.

Tune in for our next segment, featuring mainly on shelved business.

The Seed of Influence: Advertising

In order to be able to influence anyone or the course of events, you need to have a certain level of influence. It doesnt necessarily have to be written down rules and procedures or cast in stone for it to be effective. Even a simple maid or gardener may change the course of events of a large conglomerate by a few simple correctly placed seeds.

Plants have an amazing strategy of ensuring their survival and spread. They do not all do it in the same way, some package it in an attractive casing known as fruit and various birds and mammals transport them to other locatins where there is less competition for nutrients and a higher potential for survival. Some have pods designed in such a way that the pods explode casting their seeds as far as possible, some seeds are designed in such a way that the very wind itself carries them on its back the minute they are exposed to its influence. Some latch onto passing traffics in the form of man and animals and are eventually dropped of at some other destination point.

These are not the exhaustive options or full proof methods of spread, but they all have one thing in common, they find a means of carrying their seeds long distances from their point of origin.

A mentor, teacher, business man, developmental worker are various examples of vocations which have the interest of spreading the gospel of reformation as far and as effectively as they possibly can. Various marketing and distribution tools are available at their disposal to ensure that what they preach or practice is not simply concentrated in a very small area but is widely distributed and viewed by people from all walks of life.

Various corporates run campaigns and activities of corporate social responsibility were they carry out several community outreach programmes were they “spread their seed” packaged as fruit in the form of clean up campaigns, bursaries, donations e.t.c.

The community loves such things, but who wouldn’t, they are free, usually very essential, widely accepted, biblical and socially encouraged. Naturally, people want to know who is responsible for such “kindness” and this gives corporates an opportunity to spread their brand and plant seeds of loyalty in as many appreciative hearts as they possibly can.

Subsequently, a method of below the line advertising, (a common name in marketing, whereby the reputation of the company is enhanced through spreading awareness of its existence and activities indirectly through other unrelated activities and media).

The advernt of the internet and social networking boom has made the internet an extremely powerful marketing tool for the experienced and informed user. A lot of companies have seen an overnight explosion of revenue into the billions through the use of social media.
In this regard, “the seeds are carried on the very wings” of the internet.

Various internet sites, users and software programmes relay informatio about new product offers and releases to billions of people in a matter of hours. Methods that could not be employed as easily a meer five years ago.

Chain letters and emails have been taken to a whole new level, with selective advertising even being placed in the very hands of the final consumer who now has choice on the advertising that they wish to see in some instances.

Companies such as apple have employed the use of online marketing extremely successfully often creating a very big hype about products months before their release date, often resulting in them being sold out even before they actually enter into the market.

There is so much to say about this topic, I think I will have to do a few more segments in the next few days, but for now I will let you ponder a bit more on “The Seed of Influence.”