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.”


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.

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.”

Dig Deep: Lay Your Foundation

An interesting aspect about building is that when laying a foundation you have to first begin with digging in the opposite direction to that which you intend on the building to rise towards.

The moment you decide to directly begin the process of building a building you expect to hug the very sky, your pick up your tools and start digging in the complete opposite direction.

Even the bible says it in Prov 11:24 “there is that scattereth, yet increaseth…”. There is always a time, and usually that time is at the very commencement of a project, where people might not quite grasp what it is that you are doing. It seems to the untrained eye as if you are quickly digging yourself into a ditch from which you cannot escape.

The funny thing about the foundation is that, the bigger the building, the deeper and more solid the foundation has to be.

So the bigger the project, the more time, effort and resources have to be committed towards ensuring that the project sets of from a solid base.

It is not an easy task and most people who observe humungous buildings take little to no regard at all to the foundation upon which the building is built.

As in the parable of the house built on sand, shoddy workmanship and preperation for business implementation will be made manifest once the waves of market forces begin to play havoc on the business model.

In other words, a solid business has to be built on a sound moral, ethical and business values because the higher the building, the mightier the fall and the more people that will feel the crush and even the more law suites involved.

Just to slip back to my favourite past time… plants. Trees and shrubs are very fascinating life forms. For the purpose of this discussion, we can consider the desert shrubs. Some appear to be very tiny above the surface, with only a branch or two visible with a few small leaves.

An uninformed person can actually assume that they can easily uproot the entire plant by pulling it out with a single hand.
An attempt at this would prove them extremly wrong as the ernomous size of the underground root network would at some cases even constitute more than 99% of the actual plant size. So what is in reality visible to the casual observer is nothing more than the tip of the iceburg.

The key to some of the most successful businesses, is to look tiny and insignificant from the top, but have a vast network of resources at play just below the surface, capturing every single drop of opportunity that comes your way and anchoring the business so heavily, that you would nees a complete industrial meltdown to cause it to break a sweat.

The Root (Part 3): Support System

The most essential thing that you have to understand about one of the most essential parts of a plant, “the root” is to understand that it has the massive backing of the plant.

In business, you have to realise that you need to take care of your business in order for it to take care of you. If you are to reap any fruits from the investment input into your business you have to ensure that its internal clockwork and functions are at their optimal point.

Some plants can easily be reproduced by making cuttings from the parent plant. The new plant/cutting, continues to survive for a short while without some of the most essential elements as the roots and leaves.

It would not be a wise thing for a plant to assume that it can continue to operate in such a way for a long time.

There comes a point in the new plant’s “reasoning” that the plant realises that it has been separated from its source of nutrition and the time has come to develop an independant system.

If the plant fails to produce the necessary organs such as the leaves and roots because it thinks it is still alive, it will suddenly wake up one day and the internal storage would have been exhausted subsequently leading to its wilting and death.

If you neglect the most essential drivers of your business as it reaches its maturity, it may suddenly whilt and die on you. And you wonder what happened.

The business would have been operating very well for the last 12-15 months and because the systems in place appear to be operating very well. There is need to continualy review the systems in place and assess the functions, viability and overall feasibility going forward.

There is a need to continually review each and every function to make sure that it is well catered for and is able to perform its function to the best of its capability.

Some things that were efficient whilst you were serving five or ten clients may no longer be as feasible when there are now 25 to thirty clients.

New equipment may need to be purchased, vehicles acquired, software upgraded, buildings upgraded and refurbished. There are so many intricate details depending on the type of business that you have to look out for as you progress in business.

The bible says “do not restrict the horse that treads the corn.” There are certain “perks” that are derived from working in certain industries, at times these appear to be irrelevant to the operations of the business.

However they offer a certain level of satisfaction and quality of life to the employee.
These need to be regulated in order to ensure that the company suffers minimal loss from these activities but gains in improved perfomance from the employee. They can be used as moral boosters and perfomance enhancers ensuring that the core objectives of the business are achieved.

They say a hungry man is an angry man, this is obvious in many day to day business activities in a lot of our companies. We have seen industries being brought to their knees because the employees have been neglected.

The key unit of any business are its employees and if they are mistreated or given a package that is below the standard that a normal being can operate under, then the business owner is simply sitting on a ticking time bomb.

It is only a matter of time before the employee bomb explodes on it.
I am continually amazed at employers who choose to neglect and abuse their employees through poor pay packages as compared to the actual business net revenue and poor working conditions.

Whilst a dollar here and there is saved in the short run by employing strategies that disadvantage the employee, an employer should be wary because watering down the wine is a dangerous strategy.

Shortcuts in business are the quickest way to failure.

A strong, secure, solid employee root base ensures that the business system is founded on a solid rock.