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WHY START-UP BUSINESSES FAIL

TEBOGO TOTENG
MoneyMind


90% of start-up businesses fail within the first year and there is absolutely no surprise in that. It is a widely accepted global statistic after a study of the number of start-up companies that fold within a year was done.


 Thousands of successful businessemen and women would attest to the fact that they have failed many times before they could taste success. In fact an average millionaire has been close to bankruptcy three times, a fact that underscores that running a successful business is not only about the acquisition of capital and production.


It involves an array of factors that we will unpack today specifically to try and assist young budding entrepreneurs to avoid common start up mistakes. While some of the factors are conventional wisdom the MoneyMind perspective is acutely different.


The long heralded belief that a business is different from its owner at least in terms of the legalities has every ounce of truth in it but most of the time a business reflects the characteristics of its founders. The strategic direction and the philosophy of the company in many ways reflects the wishes, ambitions and aspiration of the founders. In view of the above that is why it is important that entrepreneurs must personally develop themselves and their characters and habits to empower themselves to run successful businesses.


Before you think about running a business you need to self- introspect and work on the set of skills that will enable you to be a successful business person. If you don’t the lessons will be taught to you in the University of Hard Knocks in your businesses journey.


In essence it will be very difficult not to transmute your habits into your business especially when you are a sole proprietorship or a single shareholder. If you have good habits that is good inter-personal skills, you are persuasive and you are on top of your numbers then bravo! The problem is if you have bad habits you are likely to transmute them to your company especially financial imprudence.
Below are Money Mind’s’7 ways of avoiding business failure for start-up companies

7 ways to avoid business failure for start-up companies    

Personal Development
Entrepreneurs never stop developing themselves. It is important for a would be entrepreneur to develop and prepare themselves for the world of business. Being an entrepreneur requires a key set of skills that will assist you in meandering through the intricacies of the business world. Because the world of business is changing every day and re-engeneering of processes is as frequent as ever anyone at the helm of the company need to be on top of his game.


Coaching and Mentoring
The best performing athletes have engaged personal trainers, coaches, and dieticians to name a few. They know that their success hinges on getting the best advices from professional experts. The same can be said for young entrepreneurs; they need coaches and mentors to guide them on how to successfully run a business. Mentoring and coaching take place over a long time lasting months and years and possibly even your life time. Bill Gates still has Warren Buffet as his mentor. If you have a coach and mentor you have somebody who have been through the journey and are alive to the pitfalls. Find a mentor or coach in a similar industry and avoid common mistakes.


Networking
Successful business people have robust and powerful networks of people that add value to their personal and business lives. They join networking association which gives them access to people who can give business opportunity. Networking associations provides you with free access to a variety of people with unique skills that you may need from time to time including free counsel. Furthermore network associations are good as ports for referrals.


Build a team
Microsoft and Apple thrived from building teams that share the same vision and ideals. It is important that a business build a team that is clear on its mandate. Every member of the team must fully comprehend their importance to the team. A team moving in unison is the greatest asset to any entrepreneur. Build a team based on the principles of accountability and ownership will create a great working environment.


Financially savvy
The idea behind the business is to push the profit margin and this is generally done by pushing sales and lowering production costs. Entrepreneurs need to have a basic understanding of key financial indicators. You need as an entrepreneur to have a finger on the pulse of your company and there is no better way than be able to read your financial statements.


Decisive
Be decisive as an entrepreneur because procrastinating to take remedial action when needed may only exacerbate the problem. This also true when you need to make decisions on new opportunities. Decisiveness is one attribute that entrepreneurs have; they are never in the middle and know exactly what they want.  Take a decision now than later. They say indecision is a decision in itself.


Selling skills
Everybody is in sales, so you need to be a good sales person to be able to sell yourself and your company. Entrepreneurs are very persuasive and gifted with a great ability to make others sees their vision. Your employees need to buy your vision and the market needs to buy your products and the best way is to be a good salesman.

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Business

Gambling Authority tender dangles as a jittery lottery quandary

30th November 2020
SEFALANA MD: CHANDRA CHAUHAN

Lucrative and highly anticipated national lottery tender that saw several Batswana businessmen partnering to form a gambling consortium to pit against their South African counterparts, culminates into a big power gamble.

WeekendPost has had a chance to watch lottery showcase even before the anticipated and impending national lottery set-up launches. A lot has been a big gamble from the bidding process which is now set for the courts next year January following a marathon legal brawl involving the interest of the gambling fraternity in Botswana and South Africa.

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Business

The uncertainty of getting the next meal in Botswana

30th November 2020
uncertainty of getting the next meal

Households representing more than half of Botswana’s population-mostly residing in rural areas- do not know where their next meal will come from, but neither do they take into consideration the quality and/or quantity of the food they consume.

This is according to the latest Prevalence of Food Insecurity in Botswana report which was done for the 2018/19 period and represents the state of food insecurity data even to this time.
The Prevalence of Food Insecurity was released by Statistics Botswana and it released results with findings that the results show that at national level 50.8 percent of the population in Botswana was affected by moderate to severe food insecurity in 2018/19, while 22.2 percent of the population was affected by severe food insecurity only.

According to the report, this translates to 27 percent of the population being food secure that is to say having adequate access to food in both quality and quantity. According to Statistician General, Burton Mguni, when explaining how the food data was compiled, Food and Agriculture Organization of the United Nations (FAO), is custodian of the “Prevalence of Undernourishment (PoU)” and “Prevalence of moderate or severe food insecurity in the population based on the Food Insecurity Experience Scale (FIES)” SDG indicators, for leading FIES data analysis and the resultant capacity building.

“The FIES measures the extent of food insecurity at the household or individual level. The indicator provides internationally comparable estimates of the proportion of the population facing moderate to severe difficulties in accessing food. The FIES consists of eight brief questions regarding access to adequate food, and the questions are answered directly with a yes/no response. It (FIES) complements the existing food and nutrition security indicators such as Prevalence of Undernourishment.

According to the FIES, with increasing severity, the quantity of food consumed decreases as portion sizes are reduced and meals are skipped. At its most severe level, people are forced to go without eating for a day or more. The scale further reveals that the household’s experience of food insecurity may be characterized by uncertainty and anxiety regarding food access and compromising the quality of the diet and having a less balanced and more monotonous diet,” says Mguni.

The 50.8 percent of the population in Botswana which was affected by moderate to severe food insecurity are characterized as people experiencing moderate food insecurity and face uncertainties about their ability to obtain food. These people have been forced to compromise on the quality and/or quantity of the food they consume according to the report on food insecurity.

Those who experience severe food insecurity, the 22.2 percent of the population, are people who have typically run out of food and, at worst, gone a day (or days) without eating. According to the statistics, rural area population experienced moderate to severe food insecurity at 65 percent while urban villages were at 46.60 percent and cities/town were at 31.70 percent. Those experiencing the most extreme and severe insecurity were at rural areas making 33.10 percent while urban villages and towns were at 11.90 percent and 17.50 respectively.

According to a paper compiled by Sirak Bahta, Francis Wanyoike, Hikuepi Katjiuongua and Davis Marumo and published in December 2017, titled ‘Characterization of food security and consumption patterns among smallholder livestock farmers in Botswana,’ over 70 percent of Botswana’s population reside in rural areas, and majority (70%) relies on traditional/subsistence agriculture for their livelihoods.

The study set out to characterize the food security situation and food consumption patterns among livestock keepers in Botswana. “Despite the policy change, challenges still remain in ensuring that all persons and households have access to food at all times. For example, during an analysis of the impacts of rising international food prices for Botswana, BIDPA reported that food prices tended to be highest in the rural areas already disadvantaged by relatively low levels of income and high rates of unemployment,” said the study.

According to the paper, about 9 percent of households were found to be food insecure and this category of households included 6 percent of households that ranked poorly and 3 percent that were on the borderline according to the World Food Programme’s (WFP) definition of food security.

Media reports state that the World Bank has warned that disruption to production and supply chains could ‘spark a food security crisis’ in Africa, forecasting a fall in farm production of up to 7 percent, if there are restrictions to trade, and a 25 percent decline in food imports.

Food security in Botswana or food production was also attacked by the locust pandemic which swept out this country’s vegetation and plants. The locust is said to have contributed to 25 percent loss in production.

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Business

Solid demand for diamonds towards the ‘gift’ season

30th November 2020
Diamonds

Global lockdown have been a thorn in diamonds having shiny sales, but a lot of optimism shows with the easing of Covid-19 restrictions, the precious stones will be bought with high volumes towards festive season. The diamond market is however warned of the resurgence of Covid-19 in key markets presents ongoing risks amid the presence and optimist about the new Covid-29 vaccines.

The latest findings published as De Beers Group’s latest Diamond Insight ‘Flash’ Report, which looks at the impact of the pandemic on relationships and engagements, has revealed that in the US that more couples than ever are buying diamond engagement rings. Bridal sales is mostly the primary source of diamond jewellery demand in recent months, De Beers said.

According to De Beers, interviews with independent jewellers around the US revealed that the rate of couples getting engaged has increased compared with the period when Covid-19 first had an impact in the US in the spring.

“In addition, despite challenging economic times, consumers were spending more than ever on diamond engagement rings – often upgrading in colour, cut and clarity, rather than size. Several jewellers speculated that with consumers spending less on elaborate weddings and/or honeymoons in the current environment, they had more to spend on choosing the perfect ring,” said De Beers.

According to De Beers, a national survey of 360 US women in serious relationships, undertaken in late October in collaboration with engagement and wedding website, The Knot. This survey is said to have found that the majority of respondents (54%) were thinking more about their engagement ring than the wedding itself (32%) or the honeymoon (15%), supporting jewellers’ hypothesis that engagement ring sales were benefiting from reduced wedding and travel budgets in light of Covid-19 restrictions.

When it came to researching engagement rings, online was by far the predominant channel for gaining ideas/inspiration at 86% of consumers surveyed, with 85% saying they had saved examples of styles they liked, according to De Beers. According to the survey, only a uarter of respondents said they had looked in-store at a physical location for design inspiration.

“For many couples, the pandemic has brought them even closer together, in some instances speeding up the path to engagement after forming a deeper connection while experiencing lockdown and its associated ups and downs as a partnership. Engagement rings are taking on even greater symbolism in this environment, with retailers reporting couples are prepared to invest more than usual, particularly due to budget reductions in other areas,” De Beers CEO Cleaver said.

According to De Beers Group, its Diamond Insight Flash Report series is focused on understanding the US consumer perspective in light of Covid-19 and monitoring how it evolves as the crisis evolves. Also, the company said, it is augmenting its existing research programme with additional consumer, retailer and supply chain touch-basis to understand the pain points and the opportunities for stakeholders across the diamond pipeline.

Demand for diamonds is as hard and resilient as the precious stone itself. De Beers pocketed US$ 450 million in its recently held ninth rough diamond sales cycle, and the company says it is more flexible approach to rough diamond sales during the ninth sales cycle of 2020, with the Sight event extended beyond its normal week-long duration.

“Steady demand for De Beers Group’s rough diamonds continued in the ninth sales cycle of the year, reflecting stable consumer demand for diamond jewellery at the retail level in the US and China, and expectations for reasonable demand to continue throughout the holiday season. However, the resurgence of Covid-19 infections in several consumer markets presents ongoing risks,” said De Beers CEO Bruce Cleaver recently.

High expectations are on diamonds being a sentimental gift for holiday season or as the most fetished gift. However the ninth cycle was lower than the eighth which registered US$ 467 million. For the last year period which corresponds with the current one, De Beers managed to raise US$ 400.

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