It is no longer news that Jack Ma accompanied by 38 billionaires visited Kenya and Rwanda recently to seek investment opportunities. As a small business owner and entrepreneur I can only but imagine what it would feel like to have the funding and possibly operational support that would come from a collaboration with someone like Jack Ma.
Despite the overwhelming need for funding by entrepreneurs, many businesses are actually not really ready for funding. By readiness I mean the business as it exists is not investable. Funding finds its way to structure and organization. Your idea must not only be viable, your company should also look attractive. My focus in this article is not so much on good business ideas but more on execution.
So if you will be investment worthy, what would that entail? First, you must have accurate and up-to-date financial records. Every investor will want to see financial stability – some sort of assurance that their investment will yield a profit and this is an assumption based on past and current performance. He/she would also like to see that there has been good use of the company’s resources including meeting statutory obligations such as paying taxes.
A strong management team is also a key factor in creating structure for your business. Investors are rarely willing to bet their hard-earned money on someone who does not have the requisite experience. Preferably they want to see a track record- something to show that you will succeed. Having a solid board of directors or advisors also gives you access to expertise and resources required to scale.
Internal organization is another crucial part of creating structure. Very often you find a small business owner working as the accountant, operations manager, and customer service officer. While this is understandable at the beginning when you are bootstrapping, it should not remain that way. Wearing so many hats eventually impedes growth as the business owner has little or no time to think strategically about the direction of the business.
Another aspect where you can create structure in your business is the area of human resources. Whether your business is brand new or has been in existence for a while getting the right employees and creating an enabling environment for them to perform their tasks is non-negotiable. This includes ensuring that your staff have job descriptions that clearly spell out their expected tasks, operating procedures and policies to guide them in performing their tasks, and key performance indicators to evaluate their performance. This will helps to eliminate the element of subjectivity and unprofessionalism that exists especially with regards to performance management.
It is not rare to see employees who have been in a company for over 6 years and do not have either employment letters or job description documents.
Lastly, you must have proper processes and systems for delivering your product or service to your client. Variability is one of the biggest problems of small businesses. One day you are served with impeccable service, the next day, you are left with a bitter taste in your mouth. Having well thought out and documented processes eliminates the occurrence of variability and ensures that you have great consistent service every time.
Increasingly more foreign investors are looking to Africa for expansion. Nigeria has however been overlooked due to our poor corporate governance policies. Now is the time to make your business investable and truly attractive.