Saturday, March 26, 2011

Fixing Your Brand

Here is what Scott Bedbury,former Marketing Executive of Nike and Starbucks says about Brands. He is the man behind he " Just Do It "campaign.
 Fixing A Broken Brand 

The marketing excesses of the past few years left broken pieces scattered across the branding landscape. As a result, many companies are left with bogged-down, boring -- even dying and dead -- brands. Now take a look at your brand: Do you know what's broken? Do you know how to fix it?
In the past few years, everyone has tried to jump on the brand wagon. Creating buzz, being cool, breaking through the static, embracing viral marketing -- you name it, everyone's tried it. The late, lamented dotcoms most recently led the charge, inspired by the notion that throwing endless amounts of money at the customer would build a great brand -- even if there wasn't a relevant product or service behind the campaign. Never in the history of marketing have so many companies spent so much for so little. This branding eruption has left in its wake more than a few broken, bent, or badly confused brands. Here are nine of the most common complaints about brands that are in need of fixes -- and some practical approaches to applying brand aid.

1. I know that my brand is broken -- I just don't know why.Brands get sick, lost, or broken for many reasons. Before you know it, everything that you thought was crystal clear about your brand positioning becomes murky and impenetrable. Too often, when companies realize what has happened to their brand, they blindly jump into action. They fire the ad agency or the chief marketing officer. They hold a boardroom retreat and look to the CEO for divine inspiration. Some argue to spend more, others to spend less. Everybody has an opinion. The problem is, every opinion is just that: an opinion.
If you're not sure why your brand is broken, the place to begin is with an almost anthropological approach to understanding the brand -- something that I liken to a "big dig." Revisit where your brand started out. What did the brand stand for originally? Why did it resonate with customers in the first place? What were its core values? Are they still present? Just as important, are they still relevant? The world changes. You need to be sure. Probe consumers about the product category that you're in. How do they feel about your competitors? What does your product or service provide them with? What are the tangible benefits, and, perhaps more important, what are the emotional benefits? Think of this as a brand audit, and don't bring your personal prejudices to the table. Listen and learn.

2. My brand changes direction with each new product and marketing campaign. Everything is disconnected and off on different tangents. How do I keep it cohesive?

3. My brand is boring. It doesn't create excitement in my customers or in my employees. (And it's been a long time since it excited anyone on Wall Street.) Maybe you just need a little therapy. Abraham Maslow, a founder of humanistic psychology, is not often mentioned among the ranks of history's top marketers. But embedded in Maslow's idea of human motivation -- his "hierarchy of human needs," which places complex needs at the top, above the basics of survival -- is a key to the future of any brand. Because of the clutter of offerings in the marketplace, brands need more than customer awareness or surface-level connection. Brands need to connect on a deeper psychological level. They need to respect and acknowledge the customer's emotions -- feelings such as the yearning to belong, the need to feel connected, the hope to transcend, and the desire to experience joy and fulfillment.
Smart companies recognize that great products and services can deliver more than profits; they deliver experiences that make life better in some small way. That was the insight at the heart of the Starbucks brand expression. When we did the big dig for Starbucks, we unearthed the role that coffee has played in society for more than 500 years. We found that coffee isn't really a drink -- it's an experience that has been a part of our culture for centuries. Starbucks was less about engineering a great cup of coffee than it was about providing a great coffee experience. We went a little further up Maslow's pyramid and found ourselves thinking well outside the cup.

4. My brand is dead.
Okay, it happens. You ignore your brand for too long, or simply let it ride for too long, and at some point, it just expires. It loses all of its energy, its power to capture your customers' -- or even your -- imagination.The good news is that even a dead brand can be revived or completely reinvented. Think of Banana Republic. It started out as a clothing retailer with a gimmick: Wouldn't it be fun to buy safari clothing and shop in a store that has fake palm trees, shipping crates for props, and a piece or two of a Jeep? Well, maybe for a while. But the half-life of even the best, most narrowly defined concept is painfully brief, and that version of Banana Republic soon enough became an endangered species. But still, there was something there, something within the notion of "business casual" that had potential for resuscitation. The Gap acquired Banana Republic and reinvented it, this time as a more upscale retailer offering everything from essential sweaters to aromatherapy products to knockoff Donna Karan crepe suits. Quite a leap; quite a rebirth. (Of course, in time, it will need to be reinvented again.)

5. My brand is stuck in the past.It happens to the best brands. In fact, it almost always happens to the best brands. They take off like a comet, only to plateau. They make gradual improvements, but they need transformation.
It happened to Nike. When I joined the company in 1987, it was attempting to transcend its narrow base of hard-core competitive male athletes and appeal to a broader consuming public. Up until that time, "brand Nike" was essentially pure competition: Its brand DNA was testosterone heavy, with a "wimps need not apply" ethos. "Authentic athletic performance" was being interpreted too narrowly. Nike needed to be a more inclusive, rather than exclusive, brand. At the same time, it couldn't jeopardize the young-male franchise that considered Nike to be "their" brand.
A few months before I came on board, Nike had aired a TV commercial called "Revolution" that was a huge departure for the company. It featured a complex juxtaposition of gritty black-and-white 8-mm images that ranged all over the cultural map. The message: Nike was a brand that spoke to women as well as to men, to the old as well as to the young, to obscure street athletes as well as to world champs.
The problem was, the subsequent campaign was a step in the wrong direction. "Hayward Field" -- a loving visual testimonial to the track at the University of Oregon -- was both inward and backward looking. We killed the ad minutes after previewing it to a thousand Nike sales reps who then left the sales meeting with nothing to show the footwear buyers when writing back-to-school orders. We were in a very tough spot. We sent Wieden+Kennedy back to the well with a short brief that stated the obvious: We had to stop talking just to ourselves and open up the access point to the brand. The emotional and physical benefits to sports and fitness were much more expansive than we had defined them to date.
Two weeks later, Dan Wieden, David Kennedy, and four or five staffers (who made up half of the agency at the time) had the answer. Consumers already knew all that they needed to know about fitness. Most were not happy about the shape they were in. Few had the time to be serious athletes. So why rub their noses in it? They just needed a little encouragement, an optimistic challenge. ''Just Do It'' was a watershed moment for Nike. It established a broad communication platform from which we could talk to just about anyone. It wasn't only about world-class athletics; it was about fundamental human values shared by triathletes and mall walkers alike. It wasn't a product statement either. It was a brand ethos. Nike had found a way to respect its past while embracing its future. ''Just Do It'' was a much-needed reexpression of timeless Nike values.

6. My brand is too narrow.Here are five smart ways to build intelligent brandwidth.
First, develop a beneficial cobranding deal with a good partner -- someone who brings something of value to the table that you don't have. Starbucks's deal with United Airlines put Starbucks coffee on United flights worldwide and allowed both sides to achieve important brand objectives.
Second, reach out for a brand extension. Time magazine had a very popular section in the back of the book that featured interesting people. A brand extension turned that section into People magazine. People magazine was a dazzling success -- so much so that it launched its own brand extension: Teen People magazine.

Third, leap into new distribution channels. Putting Starbucks on United flights cobranded the cup of coffee. Putting whole-bean and ground coffees into more than 30,000 grocery stores created a complementary channel for an existing product.
Fourth, jump into new product categories. Think about Ralph Lauren's line of paints, which are now sold in home-improvement stores. The company unearthed a new category and a new distribution channel. Martha Stewart started with a cookbook. Today, if I need garden clogs, I'll buy them from her. Starbucks became the maker of the best-selling coffee ice cream in grocery stores around the nation in less than six months.

Fifth, create a new subbrand. Nike is a big brand -- but Air Jordan is a tremendously successful subbrand. Toyota is a big brand -- but Lexus is such a successful subbrand that most car buyers don't even think of it as the child of a parent company (which may be the best compliment you can pay any subbrand).

7. My brand is immature. The Internet bubble was on the verge of bursting when I found myself speaking before a gathering of high-flying Silicon Valley techies. Flush with stock options and thrilled with their startups, they wanted to know how to make their brand-new brands into overnight hits. My advice to them: Think like a parent. Raising a great brand is like raising a great kid. And that means you need to be patient. (It wasn't what they wanted to hear.)
Great brands take steady guidance, a long view, and uncompromising values. Brands, like children, absorb the qualities of those who nurture them. Like children, brands thrive in an inspiring, caring, learning environment where they are respected, protected, and understood. When raising a brand, be consistent and committed. The shuffling of brand responsibilities and the management churn within organizations can easily produce a troubled brand. It takes time for a brand to develop its own values and personality. Good brand stewards, like good parents, build values into their brands that help them grow and endure. Great brands outlive their creators -- just like kids. And if you do your job right, they can make you proud.

8. My brand has been reduced to a commodity. If you ignore it long enough, you can take a perfectly vital brand and reduce it to a commodity. Think coffee before there was a Starbucks. Sure, there were big coffee sellers back then. But instead of delivering a great coffee experience, those sellers delivered whatever was needed to keep the grocery chains happy. They cut costs wherever they could and stacked their products high at the ends of grocery aisles -- walls of green and red tin that reduced a once-great product to a commodity.
If that's what has happened to your product, then here's what you don't do: Don't throw money at the problem. If the dotcom era taught us anything, it's that brand awareness isn't the same as brand strength. Even the best advertising can't create something that isn't there.
My advice is first to set your sights high. Great brand builders don't just reinvent the product, they see themselves as protagonists for an entire category. That's what Nike did with sneakers, Starbucks did with coffee, and Southwest Airlines did with flying.
Second, elevate your product. If you want to be more than a commodity, offer a unique product that is unique and so much better than the rest of the field that it can't be considered a commodity. Is Krispy Kreme just a doughnut? Third, offer more than the product. Create an experience around it and pay attention to the details. Everything matters.
And fourth, remember that the company is the brand. Customers are looking through the product to your values and how you do business. Today, the difference between similar products may be corporate reputation.

9. My brand isn't cool."Cool" and "edge" are dangerous words. Dan Wieden is right when he tells clients who want "edgy" work that having edge means that someone gets cut. Contrary to what some people may think, Nike does not set out to be cool. It knows that cool is defined by its customers -- not by some people in Beaverton, Oregon. Be careful not to worship cool. It's a false god.
Given where the world is going, I recommend that companies be more concerned with their karma than with being cool. As a society, our concerns about the effects that globalization has on cultures and the environment will only intensify, and the bar for corporate behavior will rise. I expect that we'll look to our most trusted brands, big and small, to help reduce the enormous gap that exists between profits and benevolence.
It's a new brand world out there. We are just starting to see the issues and opportunities associated with brand karma. However it evolves, I do know that strong karma will develop after years of doing the right thing: being honest and principled and being respectful of customers, employees, and the environment. Brands like Nike and Starbucks took lightning bolts early on because they were highly visible, global, and influential -- and because they care. These companies aren't perfect, but I'm confident that they will help write a much-needed new chapter on brand management. They will prove that big doesn't have to be bad, that profits are only one measure of success, and that great brands can use their unique superhuman powers for good.
Now that would be cool.
Scott Bedbury (
One solution: Think like Plato. You may not think of the great Greek philosopher as a brilliant marketer, but he understood a fundamental principle that lies at the heart of a great brand: the concept of essence. Plato believed that deep within everything concrete is the idea of that thing. Plato, in other words, was the first to articulate the importance of a brand's essence. Nike's essence, for instance, is authentic athletic performance. When everyone in the organization understands what those words mean, staffers can unleash innovation in every quarter -- from advertising to product design to promotions -- and it all connects to something larger and more enduring.

Saturday, March 12, 2011

Making Sense of Marketing

(3a)Undertsanding Marketing
There are numerous definations of marketing and this further complicates the process of making sense of what marketing truly is.
From my stand point marketing is creating an awareness of the solution you offer,delivering it as promised, meeting and exceeding the expectations of the consumer.
A leading business Author defines marketing and selling in a very precise manner. He says, "selling is what you do one on one ,marketing is selling via a system".
As mentioned in my previous topic of Designing & implementing succcessful systems,a business is a system of systems and marketing is one of those systems .

I will begin with branding because no marketing is effective without the aspect of branding. Now, what is a brand ?A brand is the aspect of marketing which communicates the virtues of the product or service( on offer ) by creating a level of spontanous awareness, trust and confidence .It is more than just a logo.
A brand, in essence, must create an emotional connectivity with the consumer so that the product or service earns consumer loyalty.
A strong brand must convey a message of optimism and positivity.The advertising campaigns must communicate these uplifting qualities. This is especially relevant as we live in world that continuously feeds us with negativity( just watch the news ).Every successful brand carries an uplifting mantra. A brief look into sport brands such as Nike ,addidas ,puma etc ,showcases these characteristics .

What must a powerful brand have to succeed?

It must have coherence ! Its meaning and message must identify with the consumers.
The marketeer must have a genuine passion for the consumer in order to correctly construct the relevent brand
Focusing on the consumers by continuously looking for ways to better understand the them ,their needs ,desires and behaviours is a sure way to build a truly successsful brand .To achieve this, the marketing people must immerse themselves into the world of the consumer .In my words marketin people must get into the "shoes" of the consumer.


Through extensive consumer research, the entreprenuer and his marketing team can gain an accurate understanding of the consumer's expectations - thereby hitting the nail directy on the head by building their business around the expectations and requirements of the consumer.

(3b)Brand Visibility

I believe there are many companies offering great services or goods out there but unfortunately, their brand awareness strategies are just not there or are simply not working because we don't know these companies .However ,certain companies are constantly firing up our imagination . I am referring to companies like Coca Cola,MacDonalds ,Google ,Apple Toyota,I could go on -you know them .

How do they come to win our attention so often?
They use passion points . These are areas or events where an emotional connection between the consumer and the product/service occurs . Coca Cola utilises sporting events such as soccer events (they have practically made the Soccer World Cups their turf - compare their visibility with that of  FIFA who own the event ? ).

The fact is Marketing people are dominantly psychologists and study human behaviour closely. They have come to the conclusion that the Human mind is most receptive when its excited and happy. In other words ,we pay better attention when we are excited .
Once the emotional connectivity is made .It doesn't end there It is necessary to continuously re-invent the product/service ( observe what Apple has done with the iphone & ipad -they started of with simple computers & stay relevent ).
This is necessary so that consumers grow with the product/service or vice versa .

I will not go into detail on how a good marketing plan should be done & implemented because I believe all marketing initiatives are centred on consumer perception. This is where all marketing strategies should begin -perception. It is possible to invent a problem and communicate it to the consumer in such a way that they feel they have a genuine need , and then make the solution and sell it to the consumer .
In the case of the entreprenuer ,it turns out that the entreprenuer recognises or identifies a problem, creates a solution and then builds a business around the solution . He must also find a way to communicate his solution in a way that connects well with consumers and powerful branding enhance can this help him achieve that .

(3c)Fostering Brand Recognition

It goes without saying that Chinese manufacturing has been made successful by duplicating well known brands .They know that brand awareness and brand loyalty can motivate sales ahead of quality .
We only come to realise that the product is inferior when it fails to perform as expected however,we would have been drawn to purchase it because of the brand which caught our attention in the first place .

I do not condone these practices but wish to bring to notice the issue of brand recognition .All consumers are motivated to buy goods or services out of brand recognition and brand loyalty.
For the entreprenuer this can be the best way to drive sales .Through a creative and rigorous advertising campaign ,the entreprenuer can create brand recognition and through consistent quality-one can create brand loyalty.

Tuesday, March 1, 2011

Designing & Implementing Effective Business Systems (Chapter 2)

(2a)What exactly is a Business System ?
Any business is a system of systems. As the human body is a system of systems ,so is a business . If the circulation system does not function at optimal effeciency ,the entire body is affected .
A business system is a structure a business adopts in order to successfully deliver services or goods to the concumer .It is made up of guidelines or policies which are implemented by those working the system.
Four critical categories make up the framework of any basic business system or structure .These can be summed up as
1) Operations
2) Human Resources
We could choose to call these departments. These departments are as critical to a business as strikers,midfielders and defenders are to a soccer team . How they combine and supplement each other is as crucial in a soccer team formation.Similarly ,how departments combine and compliment each other is equally important in a business . One department needs the other in order to function at maximum effeciency.
These departments can be more than those shown here.The purpose of a business system ,formation or structure ( you may call it whatever you prefer) is to optimize the role of each department and ensure that it performs its role efficiently.The sum total of all departments performance ensures the effeciency and success of the business.
In my undrstanding, effeciency is the ability to achieve more with less.

(2b)Designing a Business System
Start with a clear VISION -a statement defining where exactly you want to go ,what exactly you wish to achieve .
Follow up with a Mission Statement-a statement oultining how you will get your vision acccomplished .
Conclude by setting out your VALUES- a statement of what you believe in as a company.
These three statements must be visible to anyone who gets in touch with your business . When a businesses vision and mission statements resonate well with your team ,comsumers and prospective consumers -it becomes a powerful entity .
No business, I know of , ever succeeded without a clear Vision or Mission Statement.I can simplify my opinion by stating that a Vision is where we are going , a mission statement is how we are going to get there ,and values are principles we believe while on the journey.

(2c)Creating Roles within each Department
Work through the processes of service /goods delivery for each depatment .
Get to know the routines of the work processes intimately.
Then document how each function within a department must work .
Craft these functions with aim of getting them to contribute to the eventual, successful attainment of the business objective( the VISION ) .
Make job descriptions for each role since the aim is to find someone who can work within the roles defined in each department . It is inevitable that the routines of work will be amended as time goes on and/or as the business grows .

2(d)Finding The Right people to Run the Business system
It is often said systems don't fail -people do . I don't fully subscribe to this view .However, I do believe that badly designed business systems can fail . I also do know that for a well designed business system to succeed it must be run by the right people . And , finding them is no easy task .

(2e)What to look for in prospective team members
Always be on the look out for people driven by passion -they don't need that much motivation when the chips are down .
Look for experience -its a rare quality . If you intend to list your business -you will need someone on your side who has been exposed to all the processes of listing on a practical basis .
Avoid people whose chief objective is to make a lot of money( a get rich quick mentality ) .They are meant employees after all and the employers only duty is to pay an employee enough for them to work and live comfortably -not to get rich quick !

(2e)Leading A Team
I rate experience ,passion and integrity as the top three qualities in a Leader .To me integrity is doing what you say and saying what you do or walking your talk. Once what you say is not in alignment with what you do it becomes difficult for people to trust you . Remember ,when you're leading people in business that they have entrusted their career in your care !

Once you become the most knowledgeable person in the team you're leading -something is wrong. Let your team achieve and let them take the credit .Your job is to bring out the teams maximum potential,individually .A coach doesn't score the goals in a soccer team ! His job is to bring out the best in all players -so it should be in business . The reason I use soccer as an example is because soccer leaders ( coaches ) and players are tested nearly every week. This means all the systems are brought to test regularly ,whereas ,in business results are seen monthly,quarterly or even annually. Think what these means about the effectiveness of a system of a soccer team -so should it be for a business systems.

Wednesday, February 9, 2011

Simplifying Shares (End of Chapter 1 )

1(e) Simplifying Shares

Shares are units that make up a company .Think of these as cells of a body,a corporate body .The major difference is that shares are numbered . A company is the legal vehicle you use to deliver your idea/solution to the consumer and in return, earn financial rewards through it. As you may have heard of Public companies or Private limited companies or Limited Liabilty companies -all these descriptions represent various legal vehicles with the major difference being in the share structures .

When people with an interest in a company are said to own shares in a company ,it means that they exchanged shares for money.The money they used to buy the shares is used as capital and it is known as share capital .The owners of shares ( those who exchanged money for the shares) become known as shareholders.Share holders are in actual fact the true owners of the companies .Shareholders appoint directors,directors employ managers ,and managers oversee workers .This is the hierarchy structure of companies .This formation appears in a business plan under the heading Organisation Structure .

Private companies And Public Companies .
Private companies are simply legal entities whose shares are owned privately. This means that the owners have no obligation to reveal the financial perfomance to anyone except to other private owners and tax authorities.Where a private company makes profits the dividend ( amount from the profits available to shareholders ) are paid out to the private owners . In some cases, the identity of shareholders in private companies is unkown to the public.

Public companies on the other hand are companies which are partly owned by the public.The founders of the company can still hold a controlling interest (majority shareholding) and release the rest of the company shares to the public. Company shares become available to the public through an Initial Public offer (IPO) .This happens when a previously private company intends to convert into a public compoany .The other turn of phrase to describe the process of going public is " listing" or " floating shares ".

The Process of Going Public ( Converting from Private Company to Public Company)
Stock Exchange Authorities have a series of requirements for companies that intend to go public. These companies must meet those requirements and must disclose certain information about the companies officers ,the company's compliance to Financial regulations such as Tax returns and its operations. All financial and operational information of public companies must be made public.This ranges from what qualifications and experience the company directors have , how much the directors are paid ,how many shares they hold in their capacities ,and the company's business and future plans .

A stock exchange or stockmarket is where public companies' shares are traded. To simplify this defination, it is basically known that a market is where goods and services are exchanged for money-where the buyer and seller meet . A stock market is where public companies shares are exchanged for money .Stockmarkets are where share owners or holders of buy and sell their shares through intermediateries called Stock Brokers. In basic economics the price of any commodity is determined by forces of demand and supply and where these two forces meet is where the price is determined this point is called the equilibrium . For instance, if there is flooding and the supply of potatoes is reduced and potaoes become scarce ,their price goes up because there is higher the demand for potatoes as compared to low supply of potatoes.

 Now,lets say the flooding causes a bumper harvest of potatoes such that there is far too many potatoes to the point that they are even going bad because of low demand from buyers -the price of potatoes will fall so that buyers can buy them before they go bad on the seller .
We must also remember that there other factors that can affect the deamnd and supply of potatoes such as cost of transport, cost of agricultural imputs ,wages flactuations of potato farm workers ,effeciencies of farming systems (use of mechanised methods to improve output and quality,etc .The point here is there are many factors that can ultimately cause the price of potatoes as a commodity to move up or down.

The same principle operates on the stock market -where more people demand the shares(also known as equity) of a certain company, the price of the shares rises .Where more share holders/owners are selling their shares compared to those buying them, the price of the shares will drop. Certain factors can also affect the prices of shares besides demand and supply ,these can be information and perception of value of the company.

The Stock exchange or stock market is also referred to a Capital Market because it is where companies raise capital by going public. It is at the point of going public or listing that an entreprenuer makes genuine money and it is at this same point other investors exit a company ( most venture financiers exit here) . The point of going public is considered the ultimate measure of an entreprenuers success.It should be the goal of every entrepenuer who thinks big to take his company public.

Creating Successful Business Plans (Pre Business Plans Questions)

1(d)Pre Business Plan Questions

What structure will the business idea take ? In other words what legal vehicle will you choose to run the affairs of your business idea.

These are several I have listed some are American and some are those we use in African Countries ( the Law is more or less the same wherever you are ,regardless of different names or titles) :-

- Sole Proprieter :-here you are personally liable for all the companies assets and debts ( liabilites ) What this means is you're exposed if the business fails you must personally pay back every cent or penny .

-General Partnership (USA format) :- you partner with some one to run the business . Here you and your partner are responsible for all assets and liabilities . Should you go bank rupt you creditors will sue you and your partner to recover thier money.If you make profits you equally share them .

-Partnership ( African Format -Roman Dutch law ) :-This is the same as the one mentioned above and shares the same characteristics as in General Partnership. Most Law firms ,Accounting Firms and Medical Practices are structured in this format.

-Limited Partnership(USA format): -here you partner with several partners but the other partnesr have limited liability and interest ( right to profits ),At least one Generel Partner must exist within such a company .

-Limited Liabilty Company(USA format) :- Here the company is structured in such a way that th members have limited (or reduced exposure to) liabilty.This futher branches out into two formats that is -'C' Class Corporation -this is a corporation that affords you limited (or less exposure to) personal liabilty and in some instances no personal liabilty. However ,the company is required to pay Corporate tax and members arealso taxed personally.'S' Class Corporation -this is corporation is the same as a 'C' class the only difference is that S class are taxed at a persoal level .

Private Limited Company

According to Zimbabwe Company law ( Based on Roman-Dutch Law) -which I'm fimiliar with, a
when you apply for registration of a company the first stage is to involves ensuring that the chosen name for the company does not sound or appear like another as this may affect already registered entities . This means that the first stage involves a name search.
Upon satisfying the Registrar of Companies that your chosen company names( you will provide 5 options ) are unique, the Registrar will select one as the acceptable name .
The second stage involves submitting a Memorandum of Association this is a legal document which explains what your company sets out to doand an Articles of Association which spells out that the who members of the named company are ,when they met to form a company and what levels of exposure they have based on the shares they hold in the Private Company. In simplified terms the extent of members liabilty is limited by the shares they hold . The best arragement in this case is for members to hold one paid up share as the least of their exposure to liabilty.

Thereby,qualifying the term Limited Liabilty . The comlexity of such matters is best left to Corporate Legal experts .In that country that is how a company is incorporated and upon satisfying all the Registrar of Companies ' requirements ( and some that I've left out here ). The Company is brought to life when a Certificte of Incorporation is issued . It is supported by a Stamped Memorandum & Articles of Association, a Company Registration form 14 ( CR14)which lists the Names of the Directors& their Physical Addresses ,and a Company Registration form 6 ( CR6) which states the companies registered domicile .

Why a Company?Why not just do your thing and carry on with the business of making money? The truth is once your payments, for whatever business idea you have ,start to flow ,the tax authorities will pick them up unless you not using a bank acount and store all your revenue in a safe( only drug dealers and other illegals hide money from the authorities).If you are going to succeed financially then all routes for cashflow will have to be utilised and that includes using a Bank accounts . Remember ,bank notes belong to the Central Bank (their state Property ) and the State is obligated to charge us something for using their Bank Notes its called tax .It is wiser to have the company pay your taxes instead of you paying .
A registered comapny is the best way to do business for the entreprenuer because it becomes a representative of the entreprenuer ,actually his double ( and it takes almost all the risk ) while at the same time being a custodian of the business idea . If anything goes wrong,it is considered as the company failed not the entreprenuer . This means the entreprenuer can keep his house his furniture and his life even if the business idea (now the company) fails . He is only obligated to pay up to the extent of his liabilty -where the company is a Limited liabilty Company Structure.
A company is a legal person who acts on behalf of the entreprenuer while being controlled by the entreprenuer (whose exposure to the company's liabilites is at a minimal ) while controlling the company and earning profits or interest from it .
( Roman Dutch Law) or Private Company (UK format):-is similar to the Limited liabilty Company (USA format)of course without the 'C' &'S' class Corporations structures.The major similarity is that the members have limited liability (or exposure to liability) and no liabilty feature does not exist with Private Limited. On the tax matters ,the company is required to pay Corporate Tax.

Tuesday, January 25, 2011

Creating Concepts and Business Plans that Sell.

1(c)A Business Plan that Sells

Who are you making the businesss plan for ?

The first answer here should be ;for your business . Business Plans serve as guiding policy documents for your business . That is, the business will continue to depend on it even after the funding has come in . It should be open to amendment so that it remains relevent to a growing business and a changing enviroment.
The second answer should be ;for your funders. Who are these people ? Funders are the people who can finance your business idea . For the sake of simplicity, I have reduced them to 4 categories :-

- Individuals.

-Bank Loans officers.
 -Angel Investors .
-Venture Capitalists. 

Individuals -these can be friends or family members .They are closest to you ,trust your ability and believe in you.They always turn out to be a good first option for business idea funding.It would be ideal to make a business plan they understand aand can interpret.We are not ruling out yourself as funder .

Bank Loan Officers or Banks-these people see a lot of busines plans in their work and ,therefore it important that yours stands out from thr pile . Keep it simple and lean . It should not look like a bible. Remember, they will ask for collateral security. This means in the event your business fails to pay back the loan they can recover their money. If you have no collateral-get collateral or forget about banks and find other ways of raising capital . It helps to know who is looking into your business plan . If your application is unsuccessful; ask why it failed , learn and try again.

Angel Investors -these are wealthy individuals( some are entreprenuers who have succeeded )who have a lot of funds and are willing to take a risk by lending to an entreprenuer . I am told that about US$14 million worth of Angel investor funds circulates the globe daily seeking investment opportunities.In the First world countries these are widely accessible -there are directories for such people ( check google to confirm ) . This type of investor seeks to get to the entreprenuer before the Venture Capitalists arrive on the scene and secure a favourable position,say 60 % of your business idea . Most Angel investors prefer IT start-ups as these grow faster and offer a good return on investment.Some have specific preferences ,like some avoid gambling business ideas for moral reasons . Once again, tailor-make your Business plan to appeal and make sense to them and be especially realistic on the Financial forecasts ( hire an accounting person if necessary to ensure that the figures are realistic). Should your business fail they stand to lose their entire investment so bear in mind that they will do all in their power to prevent such a loss.

Venture Capitalists -are businesses which are in the business of investing in new business ideas and existing businesses . The often prefer businesses that will grow to the point of listing on Stock Exchanges . At this point ,they sell their stake (exit point ) and realise astronomical gains or continue well after shares have been floated and the company listed . For most entreprenuers these are the best people to go with but they will do all in their power to ensure that they gain the most from your business idea .However, a well negotiated deal with a venture capitalist(VC) is one that allows the entreprenuer to buy back all or most of the shares of the business at the point the VC(not meaning VietCong) intends to exit .As stated above ,VC also stand to lose their entire investment if the business idea doesn't succeed ,therefore they will place their people (considered experts ) to sit on the Board of Directors or occupy Senior Management positions . In reality, they will attempt to reduce your influence and run the show to ensure they make a profit on their investment. If an entreprenuer intends to involve venture capitalists it is recommended that the entrepenuer seeks the services( an loyalty) of a  good accountant and a competent lawyer as preferred advisors .You will be required to fund at least 10% of your business start up as a show of your commitment to the success of the venture .

My Thoughts on Entreprenuership In Africa

Chapter 1 Developing Concepts that Sell

The Reality Is :The World rewards you when you provide solutions that solve problems !

The rewards come in form of money.This is the basic ,simple fact tha must motivate any entreprenuer .Solve small problems -earn small rewards .Solve Big problems -earn big rewards.

Any emtreprenuer who truly aspires to succeed must be on the ;lookout  for problems.He must train his mind to spot these and estimate how many people they affect. The more people in need of the solution -the wider the sources of revenue.Bill Gates did that by providing an operating system for all computers ,world wide .Sometimes this requires looking into the future and recognising problems in advance- long before the problem is noticeable. Train yourself to see problems and picture yourself solving them . Interpret every problem,big or small,as a potential business idea .Seek to create solutions for daily problems you see. I know some problems can't be solved that easily , for example ,Global warming - but some affect us in many small ways everyday.These are the ones an entreprenuer must attempt to provide solutions for.
Africa has so many problems -big and small ones .In fact,it is also known as the continent of  problems and hardship.This alone must motivate every entreprenuer make Africa their business laboratory.

Why Africa ?

Because economies in that continent are forcasted to grow and will be growing at above 5% on average . 7 out 10 of the fastest growing economies are from African countries the world over. Africa's economy is made up of a few big corporations (Multi- nationals /Conglomerates) and a lot of small scale /medium entreprises making the the bigger bulk of players in commerce .Compare this with the rest of the economies elsewhere on the globe.I am not ignorant to the challenges of doing business in Africa .They are many . Consider the differences in business perspectives, culture and language;not forgeting corruption,bureacracy-the list of negatives goes on . Thats not our focus( and shouldn't be for the entreprenuer)because they will always be hurdles -like people who will tell you it can't be done . That shouldn't matter -what matters is what you're seeing with your mind's eye-Your vision. Thats what should drive an entreprenuer and the passion to provide a solution -at a profit, of course.

1(a) Creating Concepts/Ideas Around Existing Business

We live in a time where technological advancements and the consequential transformation in consumer preferences is making old solutions irrelevent to the current problems.

The advent of the internet is one such example. The Postal service offered by Post Offices has been replaced by electronic mail . This has affected the postman . In some countries the postman no longer exists . This development has also impacted the production and sales of stamps ,envelopes and post cards.

The arrival of Amazon .com means books have become electronic .How do you thnik this will affect writers,publishers,paper milling  and manufacturing companies ,and the forestry companies that were reliant on fast selling paper backs ( I'm not saying paper sales have declined ).

Similar changes have affected airline travel agents who used to physically sell airline tickets to commuters and now the same commuter can purchase their tickets and secure a booking on any airline from the comfort of their home or office .
All these changes mean old solutions are no longer relevent and this presents an oopportunity for the budding entreprenuer to innovate around these existing businesses.Once again, it requires the entreprenuer searches for the problems,first.Todays entreprenuers must see themselves as modern day inventors . This is why Thomas Edison ,Alexander Graham Bell and Henry Ford made fortunes ( it appears they made a lot more than Bill Gates has today if you factor in inflation )-they simply invented solutions for everyday problems . Problems which affected everyone .
Alexander Graham Bell figured out that long distance communication by telephone would revolutionalise the world . I find the same concept at work at Facebook today. The only difference is Mark Zuckerman found out that people love to see pictures of themselves -just like they love their images on a mirror and would spend hours in front of it . Communication is still at the heart of both concepts .
Zuckerman innovated and created around several existing businesses.So can you !

I wll explore what Facebook's core business is in one of my next Chapters . Ineed you to tinkabout it and take a guess. If you have the answer -make a contribution and join our debate here or on my facebook wall

1(b) Turning your Solution into a Business

 Why build a business around your solution ?

 Businesses are built for two reasons
(1) To provide a financial return on Capital upon selling it.
(2) To provide regular cashflow or revenue

You can build your business with the aim of selling it .Sabeer Bhatia ,an Indian Software engineer ,designed ,built and ran Hotmail before selling it to Microsoft.As an entreprenuer,you may also build a business which you will keep and grow,earning revenue from it as it grows and expands .For the sake of simplicity,lets say the first reason is-build  to sell and the second reason  is - build to keep and earn (most family owned business have this characteristic).

As an entreprenuer you need to be clear on which path you will take . It is also significantly important to remove all emotions from business and view your business purely as a business not your baby.

Building  a business starts with a plan . No one I know of ever tried to build a house without a plan . Even in the poorest African villages ,the builder has some sought of mental picture of where he will build a hut ,what material he will use and how much . Who he will build it with and for how long( perhaps it must be completed before the rains start-kind of time frame .Think of it ,its crazy to start a constuction project with out a comnstruction plan or to attempt to build a house using just any other building plan designed for another site elsewhere.
I've lost count of how many business plans I've seen that look alike .I agree that some form of uniformity must exist when making a business plan however,I feel a business plan for a website development company must not be the same as that of a private medial centre.The two businesses are not the same but its amazing how the same format is used for both.

My opinion is ,the entreprenuer is the inventor of the solution only he/she knows best how the solution must change the lives of those its intended for. your business plan must be made in the same unqueness as your  solution . It cannot be a copy of another business at all.