By Mpho Dipela, Chairman and shareholder of Legacy Motor Group
Entrepreneurship is the key to unlocking South Africa’s economic growth, which is why our country desperately needs more black entrepreneurs and business leaders.
However, many black entrepreneurs still contend with various obstacles to success, including the absence of a relevant business network, and a lack of capital. Furthermore, it’s too common to see many high-potential, black-owned businesses and start-ups fall victim to issues such as poor planning and management.
With that in mind, here are some practical tips for successfully launching and managing a business:
- Apply a Blue Ocean Strategy
In today’s highly competitive business environment, it can be tempting to tap into existing demand through price differentiation to gain market share. However, this often results in a race to the bottom, potentially placing your profits under pressure and threatening your operations.
Instead, focus on innovation and creating value for your customers, placing your sights on the metaphoric blue ocean of possibilities where there is no competition to capture new demand. It could mean investing in research and development for superior product features and benefits, or looking to verticals within your value chain to diversify your operations and find new income streams.
- Manage your risks
Mismanagement is perhaps the single greatest risk to most businesses. Successful entrepreneurs understand their own and their company’s potential and capabilities, as well as their business’s limitations and threats.
Rather than chasing the bottom line at all costs, pay attention to your risks and manage these wisely. It may mean passing on seemingly attractive deals that don’t make commercial sense, or foregoing supposedly lucrative contracts with clients in poor financial positions.
Before we acquire any new businesses, I evaluate all the potential threats that could result in the organisation closing its doors. I then focus my attention on mitigating these risks, while allowing the team to manage operations.
- Seek to understand your market
No business can be all things to all people. By focusing on the needs of your specific target market, you will limit your risk of over-extending, while ensuring that you remain relevant to your audience for maximising sales and profits.
- Take a long-term view
Instant gratification kills entrepreneurship. As business leaders, it is vital to take a long-term view and focus on nurturing your company by reinvesting into your business, rather than taking money out and potentially damaging its long-term growth.
Businesses should not be treated as get-rich-quick schemes or the entrepreneur’s personal wallet. You must be prepared to make sacrifices to see your organisation flourish – especially after you’ve put significant time, money, and energy into building it. Also, remember that you may be responsible for hundreds of other employees and breadwinners, so consider the potential consequences of your actions.
- Manage your social media presence
Numerous investors in South Africa are ready and willing to support young and talented black entrepreneurs by lending them start-up funds or even going into partnership with them. It is, therefore, essential to guard your reputation and position yourself as a bankable investment – so be careful about what you share on social media.
Your online profile could significantly influence their perception of you and your ability to run a business successfully. Inappropriate content, partying pictures, and immature posts will likely come back to haunt you and will hamper your progress. A professional presentation and reputable image will prove to be a valuable asset towards achieving your dreams.