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.”

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Growth Dynamics (From seed to seedling to plant)


The following post arose from a conversation that I had with one of the people in my close network.

When you look at the growth process of a plant, you realise that it is as dynamic as the presence of water in a river. There is always growth and development, there are always a number of processes taking place at any one time and a stream never holds the same water twice. Its always someting new.

The is no point in time, when you can say that the growth or change process has become dormant. Even when the plant itself is dead there is a process of decomposition, as it is reassimilated into the ground from whence it came.

So growth takes place consistently, if growth is not taking place then the system is dying.

A seed may be the best seed in the bunch, but it can not remain a seed forever because it will shrivel and die. The support systems that are put in place for that period are only relevant for a season, after that either development takes place or the seed dies.

My good friend was boasting to me about how “structured” and conformed his days were, how he knew what to expect day after day and how he was really good at his job and how every day was exciting because he had a chance to prove himself and flex his muscles in the mirror.

To me, alarm bells were ringing left, right and center. Its not that I despise being good at what you do, what I was majourly concerned about was “the comfort zone”. Whereby a seed gets very satisfied with being the “chief seed” the “choisest” (if I may use such a word) of all.

It is critical to realise that nature and life itself never intended for things to remain the same, change is inevitable, but the level of discomfort that it will cause in your life depends on how ready and fluidly prepared you are to experience the transition.

From the moment we are born, change is the only constant, so the same thing applies to business. Conditions and the environment that exist will only last for a certain period of time.

There can be no assurances or guarantess that a marketing or sales strategy that worked for similar “company A”, will work for similar “company B”, because the external influences change at any given time.

It is also critical to realise that there exist such things as the business life cycle and this applies both seasonaly and in the long term.
What is key in this is that, it is imperative that you understand what phase your business is going through and adjust accordingly.

When planting a seed, growth homones and weaker fertilisers are required to ensure that growth takes place to the best of the seed’s capacity.

But the very same strategy that worked at seed level becomes irrelavant at seedling level, at growth, maturity and harvest there are different fertilisers (organic/inorganic), pesticides and support systems you have to put in place to ensure a successful eneterprise.

So it is an absolute shock to me when someone expresses comfort at consistency. The only comfort I personally feel a person should have is comfort in change.

Life is a continuously developmental cycle, but it is of utmost importance that you make sure that the change is structured towards development.

Constant change is not beneficial if it is perpertualy circling like a dog chasing its tail. Change has to be progressive.

Do not kill them,they are all we have


It is about midnight in Zimbabwe and most are probably fast asleep. Most are probably having sweet dreams with a proper roof above their head. However somewhere in South Africa is a family uncertain of what the future holds, somewhere in the shanty towns of South Africa is a man caught in the horns of a dilemma. Somewhere in South Africa is a fellow brother nursing a wound after being pushed out of a moving train. Indeed the world cup has come. As we draw closer to the final we celebrate teams that made it to this stage of the game. We celebrate teams that have worked hard to book themselves entry into the finals that are due in a few days to come. However one team shivers at the thought of the final whistle, one team trembles at the thought of the end of the final ninety minutes.

This is the team that worked day and night to put up the magnificent stadiums whose spectacle mesmerizes the world. I have no doubt that our fellow brothers and sisters are a part of that team that worked hard. Talk of Mbombela Stadium, Moses Mabhida Stadium and the Soccer City Stadium to mention but a few. It is a pity that some of our fellow countrymen and a host of other foreign nationals find themselves enveloped in fear as unscrupulous elements bay for the blood of foreigners in that country. Shakira sang “Waka-Waka” celebrating the time for Africa. So did the rest of the world. As Zimbabweans we sang along knowing that our time had come. We embraced the spirit of ubuntu as we stood united with our neighbours in this time of glory. We witnessed the kick off at soccer city. We marveled the festivities at soccer city as World Cup fever took its toll. Today l cannot help but shed a tear at the growing sound of brutality coming from that direction. Does ubuntu condone the killing of helpless people in search of a better life? Does ubuntu slaughter fellow brothers and sisters because of a differing click or dialect? Can ubuntu discriminate us according to our presidents? Honestly spare us the horror. Let Soccer City be Soccer City and not Killer City.

It is with a heavy heart to note the recurrence of xenophobic threats to our fellow brothers and sisters in South Africa. It is rather unspeakable and indifferent from the apartheid that stung South Africa less than two decades ago. These are issues that l usually try to avoid but today l was pierced by a friend X on facebook who raised this issue in a way that fuels an orgy of hate speech. I believe it is the duty of every citizen of the world to promote peace and tranquility. It is the duty of think tanks to promote a language of love. Clearly we now live in a world of global interdependence where nations rely on each other in terms of trade and human resource. This does not mean legalizing crime or what is deemed illegal by the law. However where human subjects are involved measures should be taken to avoid a scenario where people’s lives are terminated in the name of job creation. Let us unite against Xenophobia.

Zimbabwe will rise again. She will once again be the breadbasket of Southern Africa if not that of Africa. She may be undergoing challenges at the moment but that does not mean her people are trash. Her people are endowed with a spirit of hard work that works harder even in tougher times. In any case Zimbabwe is on the road to recovery. The rains of reformation will fall so that her pastures will pierce the ground with greener grass. Zimbabwe’s Lands will make paddocks of peace that are free of attacks. Once again the children will play; songs of happiness will be sung as a new era dawns on Zimbabwe. It is possible and it begins with you and me taking the initiative to make our motherland a better place. May the good Lord protect the sons and daughters of Zimbabwe. May He protect them against swords and knives in foreign lands. They passed ports and borders with or without passports to fend for their families. Let no man harm them, let no man burn them, let no man kill them and let everyone say No to Xenophobia.

Redeeming Destiny:3-Through Prayer


“Dear Lord

Sometimes when l look at the ocean before me; all blue and deep l wonder if l will ever cross over. When l look at its angry waves coiling in circles and threatening to swallow me, l wonder if l will cross over. When l come face to face with the deep abyss of endless blue stretching into infinity, l wonder if l will ever get to the dry land. Sometimes when l stretch my eyes up the mountain in search of its summit l cannot help but get scared. When l look at the solid rock sitting in front of me; l wonder if l will ever get the strength to climb.

My Lord l have never seen you physically neither have l met a burning bush like Moses, but l have experienced you. I remember how you carried me at the crossroads; l remember how you lifted me up from the miry clay. You gave me strength to swim across streams and rivers. You carried me over hills and valleys so that l saw the light of day when lions and wild animals of the forest could have ripped me into pieces. I remember how you shielded me from projectiles, missiles and stones that could have crushed me into mince meat. That remembrance gives me hope that l can once again swim across the ocean. It gives me hope that l can once again climb up the mountain whose summit seems to be above the sky. That remembrance gives me hope of a sweet Destiny.

Amen”

Prayer is a culmination of words and utterances that are rich in intent, reports and even emotions so as to generate a message to God. It is a vertical link to the heavens that connects to the Almighty. It gives a rare aura of hope to the hopeless and avails an ear that is always ready to listen to the deep seated things in the heart of an individual. It does not only provide an ear but rather tactful solutions to problems facing the people. Therefore prayer becomes a highway linking an individual to the heavens. An individual with heavenly connections has no reason to fail. He or she can go through challenges but those challenges will channel him or her to a worthwhile Destiny.

The words in italics reflect a prayer from an individual facing a huge challenge. The person is visibly shaken by the size of the challenge so that he resorts to prayer. Clearly his thoughts and emotions are embedded in this collection of words. His message shows an element of fear and a subtraction of confidence. However as he continues to pray he remembers past victories as a result of his encounter with the Lord. Clearly prayer then rejuvenates his confidence at that point. He suddenly develops the enthusiasm to tackle his challenges head on. He has had a tough time in the past yet he has overcome. His destiny has been under attack yet the good Lord managed to shield him from such attacks.

The question is. What kind of missiles and stones are you facing? What type of tree are you? What fruit are you bearing? Because it is very rare for people to throw stones at a fruitless tree. What kind of ocean are you facing? How high is your mountain? You have crossed rivers and streams in the past and so you will surely cross the ocean before you. The good Lord has carried you through hills in the past. He will surely take you up this mountain. He will take you through the valley of the shadow of death if only you kneel down to pray. He will indeed redeem your Destiny.

The Money tree: Part 1 Seed ~ Reliable Supply


This is a continuation of  “The Money Tree” series, you are advised to read the preceding posts uin the series before continuing as it will prove more beneficial, but, it is possible to grasp the concepts in this post alone.

__________

As we earlier alluded, clients place a high degree of trust and
confidence in a supplier of a product, especially if the product
relies heavily on repeat sales, which is what virtually forms the
cornerstone of all serious business models.
The strength of a firm is heavily dependant on the confidence of the
clients on the stability and the consistency of supply of the product
by the firm.
No right thinking individual would like to become dependent or reliant
on a firm to supply a product and makes plans with that in mind would
be pleased to discover that the firm can no longer maintain
a consistent supply.
More than just an exchange of goods/services and cash takes place
when a sales transaction takes place. It is as if a silent gentleman’s
agreement is made between the two parties.
The buyer trusts and believes that he is purchasing a good that will
meet a stated or implied need to the best possible ability of a good
in that category for the stated value.
And the seller is of the confidence that the buyer is purchasing the
good with good intent and will further promote the growth of the firm
by repeat sales or spreading the goodwill of the firm by word of mouth
or other and will not spoil the reputation of the store by engaging in
otherwise negative behaviour.
So the two enter into an unstated relationship that is expected to be
strenghtened with time in a good business relationship.
However the said relationship can be spoiled from no intention of the
firm by a failure in the supply of the seed input by their source.
This has the ripple effect of causing the firm to break the supply
chain to the consumer, thus breaking the sacred trust entered into by
the two parties.
A case of such broken trust may be so intense that repairing it may
prove too hard a task to be achieved within one lifetime. For example
a small town pharmacy which is the sole supplier of asthmatic medicine
fails to restock on this medicine and someone in the town suddenly has
an asthmatic attack and the individual is out of his prescription.
Such a case may be fatal, and regaining the confidence of the family
or the entire town for that matter may be something that will take
generations to achieve even though the failure to restock may have
been as a result of no fault of the pharmacy.
That is why you find in the developed world, a firm can actually sue a
supplier for damages incurred by failure to supply. A household might
not sue a bakery for failure to supply bread, but they may label that
bakery as unreliable after spending a morning lacking bread and switch
to another and advise any of their friends and family to do likewise
thus ruining the reputation of the firm.
Thus concludes my argument on the need to ensure a reliable supply of
your seed input. Please join me in the next blog on how to assess the viability of  a supplier as a going concern as we take a look at simple indicators that a firm may be liable to face supply problems in the not too distant future