Your business is 80% marketing and sales; and 20% support services”, Mustapha B Mugisa, 2015
After consulting for several startups, the #1 challenge of most small businesses is not the lack of capital. It is the lack of customers.
If your business lacks customers, it will suffer from cash flow problem which is critical for survival. At the start, don’t be driven by profits. That should come as a natural expansion of business success. It does not matter how much loan (capital) you have, if you don’t have customers, your capital will still not be enough. So, focus on revenue growth. Make more money and spend it on the critical business processes – customer acquisition, retention and relationship management. All other things will be great if you get the customers right.
At worst, focus on breaking even – a point at which you make neither profit nor loss. Your objective is to be sustainable. When you keep in the business for long, you create a huge asset called Goodwill. Unfortunately, it is intangible – you cannot see it. That is why very few entrepreneurs do recognize it.
A case in point
In mid-2006, I received a special call which I had been waiting for long. It was from one of the “big 4” audit firms. I had made the cut and it was a communication of a job offer as Auditor 3. I had applied for a senior consulting position. But I couldn’t go to consulting yet. You see, my education background is from very remote village schools in Hoima.
The “big 4” audit firms always preferred recruiting people who had gone through reputable traditional schools especially missionary founded ones. That way three things were assured: (i) strong family background in which case their parents are well-connected to facilitate consulting deals for the firm (ii) very brilliant as to make it to such schools, one must have been super brain wise and (iii) both (i) and (ii). After repeated attempts, I finally made it.
The story of how I got there will be for another day.
After a few months as an Auditor 3, I finally got an opportunity and crossed over to consulting section. That is where my heart was.
I reported to my supervisor, John – a tall, masculine man with a slightly bent back (I later got to learn that he loves golf so much that it was responsible for his slightly bent posture). In the first week, John gave me a bid document and asked me to write a proposal. He did not give me any tools – no computer, no sample proposal and no guidance whatsoever. I was to figure it out all myself. The proposal was due in a week’s time.
If you have ever been involved in proposal writing, you know how tiresome they can be. Lots of thinking is needed. In audit firms, each staff (consultant) is given a laptop and it becomes like a personal property. I tried to ask my colleagues to assist me with their laptops so that I could research and write the proposal but unsuccessfully. In the meantime, I processed the documents usually required for bidding – tax clearance, company registration and quality control certificates. A day to the deadline, the partner called me to his office for an update on the bid proposal documentation.
I told him: “I don’t have a laptop. I am yet to start writing the proposal.”
If you were with me in that room, you would have seen the sudden change in John’s voice.
Appearing very surprised, he stood up and looked at me from above and said: “did I hire to type or to give me ideas?” “Did you come here to typeset for us?”
No sir, I said.
“So, where is my proposal? You have a day to the deadline. My experience is the proposal should be ready and printed two days before the deadline so that any mistake is ironed out.”
I need a laptop to be able to type it, I told him.
“You don’t get it Mustapha. Technical people complain about lack of resources. Business people find a solution around the problem,” he said. “If you are a business person, you would have gotten a piece of paper, write the proposal and give it to my secretary to type. What you write reflects your original thinking. If it is good and it warrants a laptop, I will surely give you one. But we don’t hire people to typeset here. We hire then for great ideas.”
Are you a technical person? If you complain about constraints, then probably you are.
To succeed in business, you need to focus on overcoming constraints. By far, allocating more resources to marketing and customer retention; throughout your business life cycle will be the best decision to do.