You’re now a Motherland Mogul, have you thought about safety?
A light bulb just came on and you’re already smiling at the money you’d be making from the business idea… You just slammed a pitch and you’re already practicing the speech you’ll be giving other young people on how you made it… You’ve launched your website and have snagged a client or two, business is looking promising… Your business is expanding, income is rolling in, your reputation is soaring, you’re making impact… You are now a known brand… Pause. Hold up. Wait a minute. Have you given any thought to safety on the job? Chances are you haven’t thought about the safety of both yourself and your employees. Yet, whatever stage you are on your entrepreneurship journey, it is important to consider the health and safety of everyone involved in your operation and invest in it. A safety management system (SMS) is a proactive and systematic process of safety. It involves developing a safety culture that ensures your organisation/business remains safe from loss of any kind. There are numerous benefits to incorporating a SMS in your startup. It reduces business costs and increases efficiency. With a SMS in place, you won’t have to worry about spending limited resources addressing the fallout of accidents and other incidents such injury, loss of goods, damage to business property, even death. Financing Banks and investors are more likely to invest in a business that is set up on a right foundation. No one wants to lose hard-earned money to accidents that could have been averted. Employee morale In business, word of mouth travels faster than any advertising. Employees do not want to leave a job worse than when they got into it, broken bones, injuries or ill-health. A safety system boosts their morale and lets them know that their employer is interested in their overall well-being. This morale of staff is inadvertently manifest in improved client relations and that is a plus to a business. Business confidence Big companies in construction, aviation and oil and gas seek credible businesses with a safety culture to work with. This singular investment in a safety culture could set you apart from other business owners Legal compliance And of course, using SMS means you would be complying with relevant laws in your country of operation. They say, train a woman and you train a nation. Here is to building safer businesses and workplaces as we become Motherland moguls.
Beyond handmade: Looking past Western obsession with handmade African goods
Sisi King, cofounder of the accessories brand ZikoAfrika, writes about her challenges developing a business model that allowed her to tap into efficient technology and ramp up scale while responding to growing demand for handmade African goods. Sisi King raises important questions about responding to short term market demands against long term growth opportunities. Two years after the collapse of a garment factory that killed more than 1,100 people in Bangladesh, the race to the bottom in the fashion industry may finally be slowing. Consumers are demanding products that have been made in a socially responsible manner, and brands, both large and small, are responding. With this increase in authentic goods with a social impact narrative, made-in-Africa products are gaining significant traction. Handmade items from the continent are especially in high demand; they are being carried across the retail spectrum, from low to high end luxury retailers. While this interest in handmade goods is to be celebrated, Africa is unable to compete with the high volume, low cost goods from China and India. The change in global consumer spending trends presents both unique opportunities and challenges for African production. If we buy into the hype of handmade in Africa, we ignore the bigger picture of working towards sustainable socio-economic growth for a quick marketing fix. The Story of ZikoAfrika Co-starting ZikoAfrika, a locally produced accessories brand in Kenya, I absolutely believed in the power of small-scale community focused production as a driver for fair employment opportunities. However, we were unprepared for the huge challenges we would face, producing a consistent high quality product at a price buyers were willing to pay. “Handmade goods have the powerful draw of connecting the consumer with the producer, providing a sense of meaning and transparency in a world awash with amorphous goods and murky supply chains.” Still, this is what consumers are largely unaware of: a lot of handmade production takes place in the informal work sector, which is unregulated and outside the bounds of government set minimum wages and conditions. Furthermore, the process is slow and quality is inconsistent. These issues present significant barriers to scaling. Learn to Grow Your Business In our case, these challenges made it difficult to meet timelines and low costings set by wholesalers. It became clear that to have a viable business, we would have to centralise our operations in a formal workshop and mechanise parts of the production line. As such, we explored the idea of finished by hand, not made by hand. This process involved re-evaluating our materials, designs and production line. We replaced natural materials such as bone and horn whose supply are inconsistent with perspex, a low cost and readily available plastic. This changed enabled us to utilise lasers to cut components that were then sent to an audited workshop for assembly and polishing, eliminating a huge degree of uncertainty in our production process. Available for hire in downtown Nairobi, lasers enabled us to cut high volumes of our material in a couple of hours with a 0% rejection rate. This task previously took at least a week, with up to 30% rejections. The change in production meant the opportunity to fulfill larger orders on time and with no rejection. For the workshop, it meant getting the pieces out faster, enabling employees to take on more work. In harnessing cutting edge technology available in our city, we combined two disparate worlds and broke through some of the barriers inherent in manufacturing by hand with a low-skilled labour force. The Challenge with Alternatives Being able to significantly increase production capacity, efficiency and quality was extremely exciting and motivating. However, on informing our main international client of the changes in our manufacturing process, we were told under no circumstances would products that were not 100% made by hand be accepted. At a crossroad, we had to decide whether we should continue to produce exclusively by hand, securing the short term survival of our business, or commit to a long term vision we believed had greater potential for both our business and our producers. A larger conceptual issue also loomed – is the largely western vision of the romantisized artisan and new obsession with handmade actually limiting development and fair growth in Africa rather than enabling it? To a large extent, I would argue that the obsession with handmade African goods limits development and fair growth opportunities. The global demand and value for fashion provides countless opportunities for product and market diversification. But to take full advantage of the potential for design industries to drive socio-economic growth, our products must meet quality standards, volumes, price-points and lead-times consistently. This requires some element of a mechanised production line, as well as significant investment in centralised manufacturing units that can be well managed and monitored. This is not to say that artisanal handmade production do not have a place in socio-economic development. It does – particularly in rural areas with limited money generating opportunities, or in the preservation of unique cultural handicraft techniques. However, without significant growth in the formal manufacturing sector, Kenya cannot grow from a low skill, low capital economy to a medium income one. Formalising and investing in fashion production units that utilise modern technology to eliminate bottle necks while continuing to retain an element of hands on production provides a viable hybrid to intensive industralisation. This hybrid enables our products to be competitive in international markets. Asking Ourselves the Difficult Questions As brands producing in Africa, we have a role to play in this emerging narrative. The handmade label has strong marketing currency – it is personal, the very antithesis of fast fashion and sweatshop labour, and it’s what the world wants now. But, we need to ask ourselves: is it viable? Are artisans actually making a living wage, are they working in conditions that are safe, are they working fair hours? Is what we are doing scalable and sustainable? For some it will be, particularly those in the luxury goods sector who
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.