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Risk and reward
Thabani Zulu
Tafelberg
Preface
This book is designed to be a step-by-step guide to starting, managing and even selling your business. By focusing on the risks you will encounter and proposing strategies for managing them, it aims to answer many of the questions you might be faced with in your quest to be a successful business person. I would love this book to be in the office of everyone who runs a business and to be used as a reference guide when you are confronted with difficult decisions.
This guide is obviously not comprehensive. You will appreciate that the dynamics of a business are vast, ranging from business finance and marketing to managing contracts, suppliers, clients and human resources. All these fields are disciplines in their own right and cannot be covered in depth in a publication such as this. For your benefit I have, however, attempted to condense the material and provide introductions to critical concepts. This should enable you to make the decisions you intend making, but will not make you a specialist in the fields concerned. I would advise that, when in doubt as you venture and grow your business, you contact specialists in the various fields for more guidance and support.
I have kept the material as practical as possible, shying away from theory that may be irrelevant to you. The illustrations and examples in this book are real. They reflect the experiences of many of the business people I have interacted with. Some of them, good or bad, will happen to you too! Take them seriously, and learn to anticipate and deal with such challenges.
The book is relevant to South African business, big or small. While the principles it covers can be applied universally, I have used South African legislation, culture and business language to make it as applicable as possible to a South African business person.
I trust you will find the material beneficial and useful in your endeavour to run a successful business. I wish you well; the road will be steep and hard, but the reward that lies ahead is the fruit of your labour. Hang in there, and do not despair. Be wise, be fast, and be purposeful!
Good luck!
Thabani Zulu
March 2010
Chapter 1
A purpose bigger than you
What is the purpose of my business?
How do we define success?
Do I have to choose between integrity and business success?
What do I want for the future of my business?
I would have liked to get straight into the essence of my book, discussing how you can manage the risks in business and impressing on you the various strategies of getting your business to fly, but I thought, no. In South Africa today there is so much more to keep in mind when you think about the business landscape. There is so much at risk. As a matter of fact, the biggest risk to the success of your business today is you!
Business has become notorious worldwide, known for greed and selfishness and polluted by quick-win, unsustainable transactions. Business has become a lions’ den, possessed by materialism and wealth accumulation as opposed to the pursuit of sustainable growth and prosperity.
There is much more than purely business-related questions that you need to consider as you run your business. What are you doing this for? Is it to create a legacy of empowering others, or is it solely for your own material gain? Do you want your business to live on after your death, or do you not mind if it dies with you? Are you in it for your own recognition, or for the recognition of your business? Is your purpose a narrow one of self-interest and short-term gain, or is it one that is bigger than you and takes the good of society into account? The answers to these questions can determine the success or the failure of your business.
The dangers of a quest for immediate gratification
The biggest enemy of business is the desire to grow too big, too quickly. Many aspiring entrepreneurs feel this urge immediately when they get into business. It is as if they think society will judge them as failures if they do not have the latest vehicle, carry the fanciest cellphone and live in a palatial home. They lose what I term “the essence of business”, which is putting the business before yourself. You see this behaviour as soon as the funds come through from the financier, or when the business makes a profit, or when there is cash in the business’s bank account. The mind goes wild; the business itself is forgotten, “the dream deferred”.
With this quest for immediate gratification come a number of evils. Evils that can easily be avoided by being patient and understanding that the road to success and financial freedom is a long and tedious one. Evils that eventually catch up with the entrepreneur and result in exactly what he or she was attempting to avoid: poverty, humiliation and shame.
Compromised decisions
The business world is riddled with fraud and corruption. I worked for government in forensic investigations for years, and what I realised is that as much as people in public office are to be blamed for this, they do not act alone! Behind them are wealthy business people who are constantly enticing them with kickbacks in return for contracts. This has become such a plague that every entrepreneur wants to find an insider who will throw contracts at them in exchange for something. Resist the temptation of being lured into quick contracts in exchange for bribes. While the reality is that you may not get certain contracts in this current climate if you do not go along with this trend, refuse to compromise yourself and your business. If values such as integrity, honesty and hard work are the foundation of your business, you will succeed in the long run.
Definition of success
We live in a world that defines success in material terms. The bigger the car you drive, the more successful you are! This has reshaped the way we do business, hence the quest for immediate gratification. The moment you define your success away from this generally accepted definition will be the day you start to succeed in business. I am not discouraging people from accumulating wealth, but I am suggesting that you should have a much broader definition of success that includes the good of society as well: one that recognises the empowerment of others, social responsibility, and satisfying the future needs of those who will survive you.
Let me try to explain what I believe to be the pillars of success:
1 Financial freedom. I might as well start with this even though I do not consider it the primary pillar of success. You want to be able to sustain yourself, and in these times when money rules the world, you want to be able to afford the basic needs (your health, security, food on the table) and spoil yourself with the things you yearn for. We live on this earth only once, and we want to make the best of it.
2 Social acceptance. I do not believe you are successful if the world around you does not accept you; if people do not trust you, if you add no value in people’s lives, and if society cannot rely on you. You may be a millionaire, but if society knows that your wealth is the result of “blood money” or corruption, you cannot be proud of it – even though you may put up a bold front and brag about it. The truth is, if society curses you for it, if your conscience is uncomfortable with it, you will not enjoy it. It is not success!
3 Intellectual strength. Let’s face it – you do not merely want to be “lucky”: to find yourself in the right place at the right time and stumble upon a million by chance. You do not want to know that had you not been “connected”, you would not be where you are. I am not downplaying the importance of luck or connections, but knowing that your brains made it happen gives you gratification. Knowing that you stretched your intellectual muscles to achieve your wealth makes you feel good about yourself. While I am not suggesting that a formal education is essential, I would advise it, particularly for the youth. Just to be known as intellectually