General

Entrepreneurs are a rare breed of visionaries, creators and innovators who have the courage and ingenuity to take risks, break away from the herd and cast a path for themselves.  Starting a business is an increasingly appealing and aspirational career choice – particularly in markets where secure jobs are getting scarcer, and the idea of working your fingers to the bone just to make your boss’s beach house more lavish isn’t very appealing – yet it’s tainted with a veil of uncertainty, especially in the early days. So, how do you become an entrepreneur?  Whether you are in the game of amassing wealth, changing the world or building a legacy that will outlive you, there will come a time where you will need to set aside your job and outsiders’ expectations and just ‘make the leap’. Making the leap from employee to entrepreneur (successfully) is arguably one of the key obstacles and moments of truth in the life of a start-up founder.  To find out more about this ‘moment of truth’ we gathered some of the best entrepreneurs in Ghana and Founders Institute Mentors to discuss the topic in an interactive online webinar. What follows are the key learnings from “The Leap: Making the Leap from Employee to Entrepreneur in Ghana”.  The grubby reality of entrepreneurship is that there is no magic formula. What follows are some useful considerations and inspirations for anyone seeking to make the leap:  Serve your customer, not your ego. Be led by the conviction that you’re there to solve a problem, not by confidence in your billion-dollar idea and the need to be seen as a white-collar entrepreneur. Kafui Yevu (Founder of Kraado) rightly said that, “Entrepreneurship is not meant for you to show off as your own boss. You are there to solve a problem.” Many aspiring entrepreneurs fancy the idea of being labelled as entrepreneurs, but they have no clue whose problem or pain they are solving with their business solution.  The value you sell is in the solution you are offering. Before making the leap, ask yourself these reflective questions;  Answering these questions is part of the preliminary steps for starting and operating a sustainable business model in Ghana.  Keeping the Lights On. How do you pay your bills, especially during the first two years of your start-up venture during which you are either making a loss or barely breaking even? We unpacked what it means to make the leap in three steps and put together some tactics that will help you keep the lights on, building on the experience of some of our FI mentors and entrepreneurs. Remember, this is just an inspiration and one of many options. It’s important that ‘you do you’ and work with the resources and opportunities that are available around you.  As Felix Darko, one of the leading Program Managers of the African success story, MEST stated, “You need to find that place within yourself to focus and dedicate your full energies to both your side hustle and your startup. This is where time management becomes critical.”  Stage 1: Keep your job and start a side hustle (your start-up).  Keep your job. Once you have identified a problem worth solving, your goal is to develop a solution (or many iterations of it) and find a market (or many ways of bringing the product to market). If you keep an exploratory and testing mindset, then you’re on track.  Keep in mind, at this point, you are not running a business full time yet. Making it your side hustle means you are able to nurture and grow your idea or solution and test it within your network. You are also able to fall on your current employment income to fund aspects of your entirely new venture and also provide for yourself and your family.  Another argument in favour of such a strategy is the ability to make sound and good business decisions for your early-stage venture, since the urgency to make money and keep a roof over your head is significantly reduced.  “Have a stream of income that keeps you afloat to survive when starting your business because being in survival mode makes you desperate and you’re likely to make bad decisions.” – Foster Awintiti- Akugri | Founder, Hacklab Foundation. Stage 2: Quit your job and double the hustle.  At some point, after you have identified your product-market fit, you have revenue coming in, and your business is requiring more of your time and dedication. This is when your start-up (which started as your side hustle) needs full-time attention, but it can’t yet pay a full-time salary.  Founder Institute Ghana is made up of amazingly successful Founders and leaders, and some of our mentors who ‘did it’ by deciding to switch from full-time employees to sole traders in order to maintain an income stream from a job they can do for others while opening up more time for the business. Basically, switching their full-time role for a side hustle. Your options may include offering services like freelance consulting, blogging, public speaking and tutoring which is advised to be within your area of expertise.  Cecil Nutakor, CEO & Founder of eCampus, mentioned during the panel discussion that he considers offering public speaking services in the education and e-learning sector as a side hustle. This is something he can pull off with ease because it’s in his area of expertise and has an intrinsic alignment with his edu-tech business, potentially acting as a marketing tool for his startup as well. Two birds with one stone, essentially.  Stage 3: Full-time salary from your start-up  You hustled hard. Worked double jobs but it was worth it. You have found product-market fit and you have got money in the bank to pay yourself a salary and focus 100% on your company. You made the leap, congratulations! But this is only the beginning… if your money in the bank is coming from healthy revenue (selling your product) it’s a positive sign of financial sustainability, if your salary is paid

Sometime in 2005, I was walking to the West side of Achimota School with Reverend Baiden, now Very Reverend Baiden, when I expressed my mouth-watering desire to purchase waakye across the street. Students weren’t allowed to do that; I believe they still aren’t. Surprisingly, she didn’t refuse. She only asked if I am used to ingesting rice laced with mucus and phlegm that the seller probably wipes from the snout of her young infants. I wanted to rebut that the seller washes her hands, but it was too late. I was already horrified by the mental image skillfully painted by our student counsellor. I had never thought of anything like that before concerning waakye. Very Reverend Baiden stopped then walking, looked me dead in the eye and asked, “should I buy some for you?”. I sheepishly said no. That moment stuck with me. Till now, I have trouble buying food from the streets. Very Reverend Baiden successfully triggered my brain to not only see the shiny part situations but to also realistically analyse the associated dangers. The keyword there is “realistically”. I plan to deploy this technique on Maxie as I raise her; oh I think I have a couple of scenarios where this will come in handy. Because it worked on me so so well. I have since thought about the waakye seller. Yes, I have thought about a waakye seller I didn’t even meet for 15years and counting. I didn’t know her. I wasn’t there when she was cooking but I queried myself as to why I instinctively trusted her to nourish me. Nourish me with what? Something that looked like waakye?? I didn’t think to ask her for her credentials or FDA certification. She had successfully convinced the public and me to give her money in exchange for food and yes there was a short queue waiting to be served. I am not implying malicious intent on her part. I am only detailing how I ended up breaking down a simple urge to buy waakye. Think starkly elementary and ask yourself: why do you buy food from where you do? In this article, I am trying to relay a few of the thought processes I’ve had over the years on what it means to me to own a business, a successful business. There are many definitions of “success” when it comes to owning a business. Before we go into that, don’t wander too far off on the spectrum of what constitutes a business. Almost all philosophies are not without their exceptions. Kindly bear with me. Keeping in mind that the aforementioned waakye seller has been living in my head rent-free for a decade and a half, I often wondered how I could do that. No, I didn’t want to sell waakye by the roadside. But I did fanaticise about having a business that gets to the point where people would walk in and voluntarily pay for our business. The kick is from the “walk in voluntarily” part. To me, that’s when you HAVE a business. When we considered owning a business, I told my team we absolutely have to ultimately aim at getting the public to come to us with little or no effort. Because it would be at that point that I would consider us successful at building a business, especially if we achieve it without conventional marketing methods. Good marketing begets business. So does targeted lobbying. So does nepotism. The list can be long. But customer recommendation and good reviews are cheap and effective ways that can get your business to be the preferred choice in your field. How do you get Kwame and Akua to think of your business first when they consider procuring a service you can provide? In other words, how have I been garnering, slowly but surely, the amazing powers of that waakye seller of 15years ago, who got me to instinctively choose her against my better judgement? The purpose of the below is to promote dialogue on the subject matter, as I always have with articles on the Macroeconomic Bulletin.  Let’s discuss. BRAND FAMILIARITY: Familiarity is a very powerful tool. In the 1960s, a research psychologist named Robert Zajonc discovered that when people are repeatedly exposed to a certain stimulus, they start to react favourably to it. He called it the Mere Exposure Effect, and it works. It works really well. When MTN started out in Ghana, it was really literally everywhere you go in every sense of the word. I literally couldn’t drive for 30 minutes without seeing somewhere and somehow that bright yellow box with the MTN initials in it. That consistency I believe played a vital role in them being so ahead of the other telecom companies in many respects. We engage the brands that we trust. We trust the brands that we’re familiar with. We’re familiar with what we see every day. Get it? In my own experience, even before we figured out the business activity we’d eventually be about, we got “MAXWELL INVESTMENTS” boldly plastered on the top of a storey building on a busy, major highway about a year before we moved in. Why? Frankly, I wanted taxis and trotro’s to stop there. I wanted all the mates to say “Maxwell Investments! Maxwell Investments! who wants to alight at Maxwell Investments!” … then one day, I was told that it had started happening. That day, we jumped around like little kids. It doesn’t happen any longer because there’s one building that got erected next to ours later, and yes, it’s literally blocking our shine but you get the point. EXTRAORDINARY CUSTOMER SERVICE: Human emotion is a very important factor in what we buy. Even when emotion comes second, there will be many others that will give you the efficacy you seek and at that point, emotion jumps in again. People like people they like; it’s that simple. People gravitate to those that make them feel warm. There’s a saying that people will forget what you did but never forget how you

MSMEs are less robust and more vulnerable to fluctuations in the national economy than big companies. COVID-19 has revealed that the state of world economies can sway at any moment. This is the time SMEs need to tactically shift a few gears around and evolve with the ongoing changes or risk the eventual death of their businesses. We have recently seen a reconstruction of how we interact with our financial institutions and how they interact with us. It has seen the rise of FinTechs in the nation and National Digitisation efforts. The rules are changing everywhere. Things are still evolving. It’s time for MSME’s to evolve or get left behind. Like the popular meme says: Improvise, Adapt, Overcome! I’m just adding the unspoken but apparent “OR SUFFER!”. The recent sector reconstructions have been about defining “bottlenecks”. A bottleneck, in general terms, is simply a situation that limits a process or activity from progressing. So if you prepare a glass of tea with just tea and water while aiming for a certain tea:water ratio, then whichever of these ingredients that finishes first as you aim to maintain this ratio is your bottleneck. The bottleneck ingredient limits the making of the kind of tea you like. The minimum capital for banks was initially pegged, then it was later scaled up too. That’s the tightening of a bottleneck, to limit the activities of certain banks from progressing, and for good reason. It’s to ensure that, for the next stage of banking activities, financial institutions play in their weight class. Think of a sieve, with adjustable holes. If you tighten the holes, fewer grains will fall through. If you loosen it, the sieving process progresses faster. And we are going to see some tightening and losing of bottlenecks all over the different areas of the vast economy as I realised with the passing of the New Companies Act. This act loosened a couple of bottlenecks, like previously sticking with the category of businesses stated in the initial filing. It also tightened others, like what qualifies one to be a company secretary. Defining an MSME. I don’t think there’s a definition of a Medium Small to Medium Enterprise (MSME) that is accepted worldwide. The definitions I was able to dig up clearly show that it depends on who is defining it and from where they are defining it. If a person from one sector defined MSMEs today, he would define it differently if he changed sectors. MSMEs are usually characterised by the number of employees, their capital, and sales turnover. MSME classification by size is a very good way to go about it because everyone can utilize this easy and simple method, but each sector would still come to different results.  A company of one size would be considered small in a sector where the market is huge with many competitors. This same company would be considered as big in a sector with generally smaller companies or fewer players. So MSME definition is a matter of perspective. Government Agencies usually prefer classification through a number of employees, even though recently many governments have opted to classify using their turnover. The role of SMEs in national development. It is generally acknowledged that MSMEs are a powerful engine for a country’s economic advancement and work creation. MSMEs have the capacity to fuel economic growth because they readily explore new opportunities that lead to new jobs and by so doing, they extend Ghana’s tax base while being a major driver for innovation with an endless supply of ideas and relevant skills. The creation of new companies is a significant indicator of a good, economic atmosphere that enables enterprising activities. The majority of big companies started out as MSMEs and the number of MSMEs far outnumber any others. MSME’s also employ a lot more people, yet their full potential remains remarkably untapped for many reasons. Difficulties facing MSMEs. Small to Medium Enterprises (MSMEs) all over the world have similar characteristics and so face similar obstacles. Cultural, societal, legal and other institutional differences change the understanding and the approach to fixing these issues in each country. One previously stated problem facing MSMEs is the increased vulnerability to economic fluctuations that typically would not affect the larger companies. Uncertainty with present situations because of the core “hustling” nature of MSMEs also stifles most of the long-term planning and strategic innovation. MSMEs are unable to cushion against even the regular risks that come with growth and expansion. Insurance cover, for instance, will seem like a luxury when your operating capital can all be sucked up with one good order from one good client. The most common MSME issues have to do with inadequate access to funds, taxation, problems with the workforce, lack of coordination and inefficient internal communication mechanisms or irregular information exchange. What can be done for MSMEs? All I want for Christmas is a PUBLIC CREDIT RATING SYSTEM. The creation of credit-rating agencies will greatly propel MSMEs that are building credibility and only need a good chance. It’s a self-explicable concept. My wife is obsessed with her credit score in the UK because of all the goodies that good credit brings. A rating system like that which encompasses MSMEs could be the springboard that shoots forward the capable MSMEs earlier than they would have been. Ghana wins in the end. Could asset-based financing be the answer? It’s not new. It tends to get messy but without a credit rating, without a reputation or long record and most times without even audited books, what can be done? Some banks are making strides in aiding MSMEs reach their full potential… and also, of course, calling dibs on the potential today-thousandaire-tomorrow-millionaire MSME owners out there. Barclays I know has some attractive MSME programs out there that aids many business owners. Zenith bank is also very responsive to the peculiar ecosystem that is ‘running an MSME’. There are others. Do a little research and give them a ring. So MSMEs, you’re not alone! Help is out there. Demonstrate your potential and