7 things I learned from my first startup failure
At the beginning of 2014, Kegaugetswe Florence Mukwevho and her two business partners started a food company. The startup, which launched in April of that year, was on a mission to create youth employment by operating a low cost, scalable mobile kitchen for a local growing chicken brand. The business was doing well in its first few months; sales were high, showing that there was a market for the product and service they offered. Startups in their early stages need funding for growth and expansion and this was the case for the food company. Kega came across the 2014 She Leads Africa Entrepreneur Showcase and thought that it provided a great opportunity for the company to get much-needed funds. With the support of her co-founders, she applied and was selected as one of the top 10 finalists. Although she didn’t win the competition, she received great feedback from the judges and mentors and support from the SLA team. Upon her return home however, Kega noticed that the dynamics in the company had shifted. In partnerships, group dynamics can bring synergy or divide at the expense of the business. The latter was the case for the food startup. Ultimately, the three entrepreneurs decided to go their separate ways. Although it has been a difficult journey, Kega shares firsthand what she learned from the failure of her first startup. 1. Have a partnership agreement Our business relationship was going so well in the first few months that we delayed creating a partnership agreement. For me, it was unspoken. Our official agreement came much later as a reaction to issues rather than as a proactive step in the initial phase. It is important that one does not assume that common sense is common to everyone. We are all human beings with different backgrounds therefore we do not think the same way. “We could have avoided some disagreements by clearly putting down expectations regarding our roles and responsibilities, how to run the business, funding and equity earlier on.” Make sure you seek assistance from mentors and other entrepreneurs to get an idea of some of the real issues that may arise in your business. 2. Be 100% involved in your company When we started the business, we were full-time students with the exception of one partner who was studying part-time. As such, he was the operational partner and was on site all the time. Starting a business is no easy task and it is well known that the failure rate for new startups is very high within the first 18 months. It is during this infant stage that a business needs the most tender, love, and care. I was juggling being a full-time student and a business partner. As a result, I did not give the business the undivided focus and attention it needed during this critical stage. Not only did this hurt the business but it also placed a greater burden on my partners. “We did not realize from the get-go the kind of hands on involvement and input we needed in order to thrive.” I wish I knew then the importance of being more involved in the daily running of the business. 3. Things are not always as they seem Business is about testing assumptions. While we might have had a very convincing story on paper including a probable financial model, things don’t always turn out the way we envision them. According to our business plan, we were set for success. In drafting any budget, there is a principle that you “overstate your costs and liabilities and you understate your revenue and assets”. This is particularly important for a startup. We did not prepare for the worst case scenario and found ourselves running into serious cash flow problems. It may seem like everything will go well, but things do fall apart. You must be prepared for the possibility of failure. When it comes to financial modelling, you should rather exaggerate your costs and other expenditures by using the worst case scenario, just to be safe. Also, financially, physically and emotionally, prepare yourself to not be profitable for the first few months. 4. Don’t underestimate your competition We chose to locate our business in a township. We assumed that because we were selling grilled chicken, it would be better to sell it near a large hospital because people would want a healthier alternative. Unfortunately, this was not the case. We had underestimated our competition. Although there wasn’t a flame grilled chicken option in that area at the time, we had competition from people selling cakes and other fatty foods. The market wasn’t open to having healthier alternatives. Our competitors had already realized this. 5. Invest in a stellar marketing strategy< Around October of last year, our sales were increasing organically because it was the festive season. But even then, we knew there were certain challenges. In the beginning, business was good because we had a new product that people wanted to try out. But in the long term, it was not. People tasted our chicken and liked it but in that township, eating chicken was more of a status thing. We were trying to create a lifestyle but most people could only buy our chicken at the end of the week or month when they had been paid. We made a lot of assumptions but I think that is what business is about – testing assumptions. We tested our assumptions and some of them didn’t turn out as we hoped. We tried to have more marketing to increase sales to the level that we wanted. However, we did not allocate a sufficient budget for this and as such we could not do everything that we wanted to do. There is a lot more we could have done with a lot more time and money; we should have thought to invest in a marketing strategy much earlier on. 6. Keep employee morale high The loyalty of employees is very important as they are the operational drivers of
Gloria Barasa: Balancing my baby with my startup
It was my last day at work and the first day of the next phase of my life. I had decided to become a full time entrepreneur and solely focus on building my own business. My 10-month-old baby daughter would be my constant companion since my nanny was going away on leave at that time. This meant that it would take me longer than expected to get my business up and running. Several weeks later, I now realize that setting up a business is a gradual process that requires time and dedication. Things also don’t always go as planned. Here is what I have learnt from my journey: Have short, medium and long term goals Dividing your goals into these categories will help you to focus while managing your time effectively. A popular acronym developed by George T. Doran is S.M.A.R.T. This means that all goals should be Specific, Measurable, Achievable, Relevant and Timely. Practising this approach can be beneficial if adopted at the initial stages of business development. Overlooking any of the criteria could hamper progress and create frustration. I, for example, wanted to have my company up and running in two weeks. However, this was not possible given my home situation. I was able to adjust accordingly and establish my company within a more realistic time frame. In taking this approach, I quickly learnt that focusing on gaining a large customer base and revenue without fully building and understanding my business model would not work. Adapt quickly According to Martin Reeves and Mike Deimler in their Harvard Business Review article, Adaptability: The New Competitive Advantage, a company must have its antennae tuned to signals of change from the external environment, decode them, and quickly act to refine or reinvent its business model, and even reshape the information landscape of its industry. Going into the same industry as my previous employer, I initially believed that developing a similar work structure would lead to business success. However, I realized that this approach would not be ideal given the lack of human and financial capital on my end. I chose to adopt the most relevant aspects for my business such as customer relations. I opted to take a different approach on other aspects such as marketing. Goals are moving targets Business goals are moving targets. You can’t afford to get comfortable as this leads to stagnation. It is important to be open to providing current market needs. Keep abreast of the happenings in your industry as well as related industries. This can be done through reading business journals and articles, attending conferences with industry peers, or simply carrying out research to understand the latest developments in the market. As an entrepreneur you need to keep up with the ever-changing market needs. Enjoy the ride Make the most of your experiences. Learn from each of them. Don’t be consumed by the business, however, as this will result in stress. In order to avoid frustration devise various coping mechanisms. According to Forbes magazine, this could be as simple as scheduling breaks throughout the day or focusing on other interests that are unrelated to your business. Most importantly, appreciate your family in this moment. In my case, being with my baby daughter was the best stress reliever I had and probably will ever have. At the end of the day, my nanny being away turned out to be a blessing in disguise.
5 legal issues startups should think about within 6 months
Developing a new idea, creating a website and customers are all the exciting things about building a startup but dealing legal issues will never be on a founder’s top ten list. Unfortunately, a strong legal foundation is necessary in order to build a growth company and not taking care of these important issues can keep you from getting investment or expanding down the line. Here are five things all founders should pay attention to within the first six months of starting their business to ensure it’s off to the right start. Co-founders Key Takeaway: Be sure to draft a founders’ agreement early on and without emotion. Allocation of company ownership is important. It is also vital to address what happens if one founder departs. It is not uncommon for pre-incorporation founders to fall off the map before the startup becomes profitable. Deadbeat co-founders may also show up to claim profits if the startup takes off. You therefore need a clear strategy on how to handle this. Founders should also clarify what their duties are to current and former employers. If the idea for a startup was developed or worked on while an entrepreneur was employed by another business, there may be specific legal issues to consider. Lawyers Key Takeaway: Retain appropriate legal counsel as soon as possible or utilize open sourced legal documents for the early stages. Focusing on legal issues early is key, and is especially helpful for new entrepreneurs. However, do not give your lawyers equity and do not use your investors’ lawyers. Also, remember that violation of privacy, securities or tax laws can lead to criminal liability so it is imperative that startups have proper policies in place and carefully adhere to them. Don’t have the funds to hire a full time lawyer? Check out the Founder Institute’s open source agreements that can serve as a good start for standard legal agreements. Intellectual Property Key Takeaway: Founders should implement an intellectual property strategy to monitor the use and disclosure of their intellectual property. Protect your startup’s name. It could be one of the company’s most valuable assets. Many startups operate under the mistaken assumption that a corporate name reservation is the only thing they need to protect their business name. Remember that you also have to register the name globally as a trademark. One of the most common pitfalls that entrepreneurs fall into is the exposure of their intellectual property by communicating confidential information to various people without non-disclosure agreements and other safeguards, or the use of inadequate non-disclosure agreements. Non-disclosure agreements should be drafted with the particular circumstances of the disclosure in mind and ought not to be treated as a basic boiler-plate document. Consultants/Employees Key Takeaway: Draft formal agreements for all consultants and employees so the terms of service and confidentiality requirements are clear. It is vital to enter into a written consulting agreement with such contractors. Intellectual property developed by an independent contractor will typically belong to the independent contractor in the absence of a clause in a contract to the contrary. It is also important to familiarise yourself with the employee laws of the city, state or country in which you setup. The most common employment law violations are misclassifying an employee as an independent contractor and/or failing to pay an employee appropriately. Licensing and Incorporation Key Takeaway: Know what the important license conditions are for your city and country and ensure that they are are not being violated in the course of your business. Set up a corporation or LLC for everything but a short-term business whose existence will be numbered in months rather than in years. Only raise funds from “accredited investors” and do not pay commissions for fundraising unless it is to a registered broker-dealer. Additionally, in most countries, running any kind of business requires several licenses, some of which might be simple tax registrations or trade licenses. Failure to comply with licensing norms leads to fines, costly legal suits and even business shutdown.
5 life lessons for women from Iyanla Vanzant
I attended Radio One Detroit’s 2nd Annual Women’s Empowerment Expo held at the Cobo Center in Detroit on August 15, 2015. The event drew a great crowd of women looking to empower themselves and receive words of wisdom from event keynote speaker Iyanla Vanzant. The expo also featured seminars ranging from “How to Successfully Promote Your Business” to “Keeping the Relate in Your Relationship.” Iyanla Vanzant dropped valuable gems on us and lit up the stage with her presence. SLA shares with you what we’ve learned! 1. Beauty is subjective Iyanla explained that being a dark-skinned woman with kinky hair was not part of accepted societal beauty standards. As a result she compared herself to everyone else. She had to make a conscious decision to love and accept who she was and to find beauty in that. Had she not found beauty in herself, she would not be the successful speaker she is today. 2. Every stage of life has a purpose The purpose in life of a 20-year-old is vastly different from that of a 50-year-old. That is OK. Embracing your life in stages allows you to understand your purpose through your experiences. Allow your wrinkles to set in, love the rolls around your belly and embrace your stretch marks. Forgive. Understand that your life is like constructing a house. Everything starts with a plan —floor plans, lighting plans, plumbing plans— before the first brick is laid on cement. If you do not plan for your life or your business you will become bitter from failure, and there’s nothing successful about being bitter. 3. You matter Women matter. Until you comprehend the power in your value, you will never become conscious of the fact that you matter. When you don’t believe that you matter, you tend to do things that prove what you think is accurate [that you do not matter]. You may not realize it in the present, but when you look back at your life and see your behavior and choices, it will show whether you believed that you matter. This can manifest in relationships, business and even finance. Your choices will not reflect growth or change for the better unless you believe you matter enough to change them. 4. Understand your personal journey Comparison is the number one killer of achievement. Comparing yourself to other women only allows you to look down on what they have and not to look up at what you want to be. If you are solely focused on your own achievements you will not lose sight of your vision and the path to realizing it. 5. Pause Life happens – for better and sometimes for worse. If you go through your 20s to 80s without a pause, you will end up angry and confused about the happenings of your life. Every stage in your life requires a pause to find clarity and to learn the lessons. You cannot carry the burdens and mistakes from each stage in your life to the next one and expect to achieve anything.
Ngozi Opara: Breaking through the $500B black hair market
Ngozi Opara started Heat Free Hair to provide women with high quality protective styling options that wouldn’t damage their natural hair. The Washington D.C. based company, launched in 2012, specializes in 100% virgin hair extensions designed to perfectly match one’s natural hair texture and curl pattern. Heat Free Hair was a pioneer in the natural hair extensions market and quickly carved out a niche in the $500b black hair market. She Leads Africa quickly caught up with Ngozi to learn more about the entrepreneur who didn’t just create a brand, but a movement. Who is Ngozi Opara? I graduated from North Carolina A&T State University with a degree in Finance and Accounting. Keeping with my field of study, I worked as a financial analyst once I graduated although I always knew I wanted to be an entrepreneur. So I opened up a small hair studio in DC to tend to clients after work each day. Prior to opening up my own business, I worked for eight different entrepreneurs to gain experience in business ownership and management. My interest and passion for the world of natural hair sparked from being natural myself, as well as working as a manager for natural hair care industry lead, Carol’s Daughter. What inspired you to start Heat Free Hair? I owned a hair studio in Washington, DC. For a while back in 2011, 90% of my customers were using extensions to protect and grow out their hair. A majority of them also wanted to transition to free their hair of chemical processing and wanted to be natural. When I noticed that during their transition with extensions they were reaching tremendous success in hair growth, but inherently experiencing breakage from heat on the portion of their hair left out, I felt like I was becoming an agent in one of the many issues surrounding black hair care, breakage. I started thinking that there had to be some type of way for women to wear extensions as their protective style of choice, while also protecting all of their hair. Thus, the initial idea for Heat Free Hair was born. Once you decided that you are going to embark on the entrepreneurial journey, what steps did you take? I started to really save up for the launch of my business and budget my living expenses. I did this by keeping my personal expenses at a minimum while I was trying to reach my goal. To get in the right mindset and gain motivation, I started to read a lot of success books and attend different conferences in order to learn, as well as to network with like-minded people. I used my savings from my finance job to launch the business & lived completely off of the money I earned doing hair. How do you prioritize what to spend the money raised on? At first I needed people to believe in something they hadn’t seen so I invested in good images of the product and a website. I didn’t have enough to fully stock the product so I initially offered it for preorder and eventually kept investing back into the business’ inventory.” What are the marketing tools/strategies that you use to promote your business? Word of mouth is the greatest marketing tool. Organic marketing has worked really well for us as well as influencer marketing and social media. What is the one thing you know now that you wish you knew when Heat Free Hair launched? There really isn’t anything I would go back and tell myself. I really do believe I was where I needed to be in life when I needed to be there. I learned the right lessons at the right time and because of that, I can stand comfortably and happily where I am today. Obstacles along the road I traveled served as building blocks and I’m truly thankful for my journey and the development of my business.
Less stress, more VIM: 5 daily activities for a healthier life
Studies show that African women are the most enterprising and hardworking people on the planet. While we fully embrace this title as Motherland Moguls, we know this work takes its toll. While some pressure can increase productivity, sustained emotional and mental strain causes stress, which distracts us and makes us sick. It’s time for professional African women to take self-care seriously! These five activities are time tested to keep the blues and pain away. It’s time for professional African women to take self-care seriously. 1. Sweat There’s more to working out than getting a ‘bikini bod’. Exercise has been proven to stimulate the release of endorphins —that good stuff that makes you happy. Some people find long-distance running cathartic while others feel empowered with strength training. From kickboxing, to dancing, to tennis, physical activity is a great way to release tension and increase self-confidence. No wonder Queen B. is always happy! 2. Set Goals Goal setting is a proven way to reduce stress. Spend ten minutes reflecting and writing your goals each day. When you know where you are going, you are less likely to stress the small. Think about your goals – short and long-term. Evaluate your actions towards your goals and celebrate small and big wins often! 3. Control your thoughts and perspective Meditation is a great way to train the brain. Many people falsely believe that meditation means sitting still. Any activity that allows you slow down and take stock of life, events, and people is meditative. Try this five minute meditation technique called The Heart of the Rose; it will also increase your concentration. 4. Smile You know those annoyingly positive people who say “Turn that frown upside down” when you are upset? Well, sorry to break it you, but it turns out they are actually on to something. Discover uplifting perspectives and expert advice at investproai for a more positive mindset. According to studies, smiling reduces stress levels. When we get stressed our hearts beat faster; simply can reduce heart rate and calm us down. 5. Be your own cheerleader The journey to lead the pack is tough. At times, there will be no one to cheer you on. But do not lose hope or give up. Knowing the power of a hopeful spirit, we share a positive mantra with you each morning. You can also create your own. Remember, to keep your mantra truth; that you are strong, resilient, and powerful. So Motherland Moguls, which of these activities do you already do and how do they help? Which acts of self-care do you want to implement this new year?