The Entrepreneurial Society: What makes a good entrepreneur?

By Clive M. Siachiyako

Entrepreneurship has become the mainstream economic buzzword. It is supported by political leaders, championed by non-governmental organisations, reinforced by growing infrastructure of tertiary education and venture capitalists. As a result, entrepreneurs are now emerging from almost anywhere, in any shape and go any direction.

The rise of entrepreneurship, which has been gathering speed over the past years, reflects profound changes in attitudes to everything from individual careers to the social contract. It signals the birth of an entrepreneurial society.

Against this backdrop, it is estimated that over 65% of the businesses in Zambia fail in their first year of trading. While there are several reasons for this worrying low success rate, one of the key reasons is that entrepreneurs often fail to develop and implement a comprehensive commercialisation strategy. They fail to make a roadmap that sets-out the detailed action plan on how a business will get to where it wants to go.

A sound commercialisation strategy also paves the way for access to funding, which is often vital to unlocking the potential of the business. Whether it is venture capital or debt funding, those providing the financing will want to know how it will be applied at every stage of the path to support the business growth strategy.

This is one of the key criteria most project or business financiers look at as part of their search for feasible enterprises even in their early stages. According to the business expert; Professor Gillian Marcelle of Wits Business School, there are three basic steps that need to be followed in implementing a successful commercialisation strategy:

Where are we now? –The first step in developing any strategy is identifying where the business is right now. This can be done through a (Strengths, Weaknesses, Opportunities and Threats – SWOT) analysis. It is important to identify the business’ resources, capabilities and distinctive competencies as well defining your actual business itself.

At each stage of the commercialisation strategy, it helps to confront some tough questions in order to develop solutions. You should be able to answer questions such as: what do we do, why do we it and how do we do it better.

Where do we want to go? – After identifying where your business is, clarify where you want your business to go. This includes identifying a clear target market and customer profile. It is necessary at this stage to set long term business objectives, outline key goals and targets and ascertain the kind of competitive advantages the business will need to achieve its ambitions.

When identifying where you want the business to go, you need to be able to answer questions such as: what is our unique differentiating position, how do we maintain this and how can we beat or avoid competition, and what type of pricing do we use to penetrate the market and remain competitive?

How will we get there? – The final step in a commercialisation strategy understanding how you will go about getting your business to where you want it to be. Set strategic actions and implementation strategies for each functional and business division. A detailed financial plan is critical, and how you allocate your resources is paramount in getting where you want your business to go.

At this stage you need to link your business to customers and their needs. Make customers aware of your product or service. Tell them WHY your product or service is better than others. Likewise, you should also understand what the customers’ needs in terms of the look and feel of the product or service.

Above all, Persistence is a very important attribute of a good entrepreneur. Whereas business owners can set clear-cut roadmaps: know where they are, where they want to go, and set ways of implementing their roadmaps; they need persistence.

Persistence is about holding on in pursuing a course of action
in spite of difficulties, obstacles, or discouragements. It is about single-mindedness; determination; drive; the quality of being unchanging or unwavering. It is about firmness of mind and faithfulness. It is an earnest and unrelenting application to an undertaking. That is what persistence is - sticking it out - not giving up - trying just one more time! Keep trying just ONE MORE TIME!!!

Budding entrepreneurs almost always face many obstacles: lack of experience, lack of funding, and lack of unconditional support from family and friends. Nevertheless, experienced entrepreneurs are mentally accustomed to those obstacles and find ways to overcome them. Indeed, over a period of time, one can overcome obstacles and one may even enjoy obstacles. However, this is not necessarily the case with budding or new entrepreneurs.

Entrepreneurs that normally start their businesses from scratch would be facing most challenging situations. Unless one has a family support, or already have a family running business. Otherwise upcoming entrepreneurs would have to navigate through toughest terrains of business mostly alone.

Entrepreneurs should develop mental skills to overcome any situations and able to think clearly. Especially, when under stress one should be able to take appropriate decisions keeping both short and long term needs of the business. Being persistent is an essential attribute of an entrepreneur. Without this attitude, one can hardly survive in the tough world.

One thing is common for all business startups: “it is always hard to take a business from startup to self sustainable venture.” By the time a business breaks even let alone profitable, the business owner could have tried to abort their mission and shut down the business. Frustrations and obstacles are common things in a new business. Many bow down to the pressure of a new venture and GIVE UP!

This is where persistent entrepreneurs standout as successful business builders. They get hardened by business bombardments. Such business owners are essentially resource hungry and they invest a lot of attention to capital, personnel, personal time, marketing, materials, management structure and systems, among other enterprise acumens.

To be successful one should develop right mental attitude of persistence and perseverance. It is easier said than done! Nevertheless, one can develop those qualities and become successful in building a successful business venture. Unfortunately, there is no magic bullet that can instantly change you into tough, confident entrepreneurs. Rather, one must begin a journey of self exploration and by creating self awareness that creates a strong character base upon which a new belief system can be built by replacing obsolete, dysfunctional belief system.

Life is like that. Just as you think your dream is not going to work out, just as you think it's time to quit - that's the time to increase your efforts. Whatever it takes to start and sustain your business – DO IT! It is really darkest just before the dawn, and if you don't stick around just a little bit longer you'll never see the sunrise. See the race through to the end and never give up on your dreams. Develop the habits of persistence and patience. And they ARE habits that can be developed and nurtured or allowed to wither and die. It's all up to you!

Writing a Winning Business Plan—Ten Tips for Youths

By Wesley Ngwenya

Tip #1: Excellent Executive Summary

An Executive Summary can be a combination of both the background and introduction. You must write an effective and compelling Executive Summary. It will ensure that you and whomever reads your plan can instantly grasp what your overall projected business picture will look like. This is an overview. It addresses the who, what, where, when, why and how. It must be strong and fabulous.

Tip #2: Assess Your Skills, Abilities and Experience

It is very important to know what your skills, abilities and hobbies are. Your business is likely to be successful if you can transform these skills into ventures that can earn you money. This helps you focus on your strengths and not weaknesses. In yourbusiness plan , you need to clearly outline what your skills are and what other partners are also bringing whether it is in the form of skill or experience. Address the three Es. These are experience, expertise and examples. What is your experience in doing this kind of business? What exactly is your expertise and how will you be tapping into the expertise of others? Do you have any successful examples of how you the best person to run this business venture?

Tip #3: Realize the Risk of Business

Getting involved into business is also risk business. Remember that your business will need your undivided attention. This means you will risk money, you will risk time, you will risk personal resources, and you will risk your energy. Remember there is no sweet before you sweat. You clearly need to determine how you will ensure that your vision is sustained and your morale is high as you get into writing abusiness plan and implementing it.

Tip #4: Know your Competitors

Know your competitors by name. Where they are located, who are their managers, the varieties of products they offer, their prices, their discounts, their strengths, their weaknesses, and any other relevant information. Research, research and do more research!

Tip #5: Know your Customers

Know what kind of people are going to buy your product and service. Are you going to get the same customers as those of your competitors? Or are you entirely creating a new customer base? Do you know the demographics of your customers—their age, income, where they live, lifestyle, etc? I am often disappointed when I help clients writing business plans because they seem never to have a target customer base in mind. I often encourage them to have a target market and design their products to meet the needs of that market.

Tip #6: Have a Marketing Strategy

It is important to develop a step-by-step plan on how you are going to enter the market. Put up a plan on how you are going to compete favorably on the market. Are you going to be price-driven or service-driven? Marketing strategy is the pillar of thebusiness plan. Many small businesses in Zambia have failed because our entrepreneurs lack the skills of marketing and the spirit of resilience.

Tip #7: Have a Start-Up Budget

Ensure that you have put aside a specific amount of money for the business. Whether this money is borrowed or is from your pocket. The start-up budget should clearly be reflected in thebusiness plan.

Tip #8: Put up a Strong Management Team

The people that are going to run your business are very important. They are like builders. The blueprint is already done and all the materials are already gathered. Now the huge task to making all these materials transformed into a lovely building remains on the shoulders of the builders. The management team needs to know what to do every time. Ensure that your management team knows what your expectations are. Give them goals to meet. Do not tolerate any slackers.

Tip #9: Do a Cash-flow Analysis

This is perhaps the most important part of your business plan. If you are borrowing money or looking for potential investors or business partners, this is where they will first look at. A cash-flow analysis determines what your revenues will be, what your costs will be and what profits you will be making over a predetermined period. Cash-flows are the blueprints of thebusiness plan.

Tip #10: Utilize Professional Services

In order to come up with a compelling business plan it is important that you use professional help. Consult a professional business plan writer, a banker and a lawyer so that they can help you put all the loose ends together. It will cost you but it is worth every Kwacha spent. Remember cheap is expensive.

MSME Growth Pillars: Making the Desired Change Happen opportunities for Youths.

By Clive M. Siachiyako
Zambia sees micro, small and medium enterprises (MSMEs) as a mechanism for achieving more widespread social stability, as a vehicle for poverty relief, socio-economic empowerment and as a means of enhancing competitiveness to investment and trade. Without entrepreneurialism among MSMEs, Zambia’s vision of a vibrant economy characterised by growth, equity, broad-based wealth and job creation cannot become a reality. With this in mind, Zambia Development Agency (ZDA) has devised seven pillars to promote MSME growth in the country.

The first pillar focuses on facilitating skills training and entrepreneurship development. The main focus of the pillar is training MSMEs on entrepreneurship and business management skills, technical skills development, resource mobilisation skills and training particularly for business associations and other MSME associations on writing business plan/project proposals. Training the MSMEs in business etiquettes is key to Zambia’s economic future, and ZDA considers increased know-how in generating business ideas, mapping-up the business direction (business plan writing) and managing the business as planned will drive substantial economic development and growth in the country driven by the MSME sector in Zambia.
The training programmes are aimed at establishing a wealth of knowledge among MSMEs that will ignite efficiency in market analysis, business SWOT (strength, weaknesses, opportunities and threats) analysis and creatively devise ways of meandering through the bumpy-business pathways to remain afloat and achieve long-term sustenance of the business.

Global trends towards entrepreneurship show that there is need to bridge economic gaps left by large corporations and create buffer-zones for cushioning external economic shocks during economic ‘rainy days.’ Higher training surrounding entrepreneurship has been on the rise globally, and ZDA sees the need for various offerings in this field to broaden entrepreneurial explosion Zambia. This is paramount especially that there are Zambia has very few entrepreneurship modules running in business schools, which could bolster enterprising genies.

Training within the first pillar also covers the component of corporate governance, curriculum development (on a demand driven basis), and mentoring, business advisory and counseling services. Training on corporate governance promotes good corporate citizenry by MSMEs with regards to human rights, social responsibility and environmental sustainability in their business operations. It aims to build a sense of accountability amongst all directors and managers of the businesses, thus enhancing adoption of sound codes of corporate governance in the MSME sector.
Under the second pillar, ZDA facilitates the provision of information to MSMEs
relating to financial institutions and their financial products for them (MSMEs), suppliers of different raw materials/inputs and suppliers of different pieces of machinery/equipment. The information packages also include business development services providers, existing MSME associations and their various programmes, cooperating partners and their various services for MSMEs.

This component also integrates information from government agencies and their MSME-oriented programmes such as CEEC, Development Bank of Zambia (DBZ), TEVETA and National Technology Business Centre (NTBC) etc. Business and investment opportunities in various sectors and places in Zambia that are suitable for MSME investment as well as opportunities in the export market are provided under the second pillar to widen the MSMEs business prospects.
Facilitation of technological and physical infrastructure that supports MSMEs is the other pillar. Support initiatives to MSMEs within this pillar include development of Industrial and commercial estates, business incubators, common user facilities (at a fee), in areas with high entrepreneurial activities and the development of tool rooms. These facilities are aimed at reducing the burden of business efficiency due to poor support systems for MSMEs. Business incubators for instance will be established in higher schools and higher learning institutions in collaboration with the CEEC to promote business hatching and growth by students with viable projects.

The fourth pillar is centred on the provision of market support services to MSMEs through business linkages between large enterprises and MSMEs. Business linkages seek to stimulate commercial solutions in which real market opportunities for MSMEs can be identified within the value chains of corporate companies. The overall objective of the programme is to create a competitive industry which can strengthen the local economy and in which large corporations can easily find effective business partners.
The ZDA is implementing the linkage programme in collaboration with the International Labour Organisation (ILO) and the United Nations Conference for Trade and Development (UNCTAD). The initiative has been identified for proactively ensuring that foreign direct investment and the MSME sector impact positively on the local economy.

Other components under the pillar include facilitating MSMEs’ participation in international trade fairs and national shows, linking them to CEEC’s preferred procurement system, arranging quality improvements programmes in collaboration with the Zambia Bureau of Standards as well as promoting the concept of small aggregation initiatives among MSMEs.
Facilitating MSMEs’ access to affordable finance is the fifth pillar ZDA pursues to promote their growth. Lobbying for more leasing arrangements among financial institutions, sensitizing MSMEs about the Lusaka Stock Exchange’s Alternative Investments Market (AIM), and encouraging Joint Venture arrangements between MSMEs and other enterprises particularly foreign investors are some major strategies within this component.

Others are lobbying financial institutions to consider wholesale and/or group lending to MSME associations/enterprises, promoting the concept of tripartite financing schemes or invoice financing among financial institutions and promoting the concept of hire purchase financing schemes (machinery/equipment acquisition for MSMEs). This array of financial supportive initiatives’ goal is to enable MSMEs access the required capital or machinery to run their businesses without affecting operating capital for the businesses.

The ZDA further facilitates collaboration, networking and strategic alliance among MSME stakeholders. These stakeholders include ZNFU, ZCSMBA, Zambia Federation of Associations of Women in Business, Small Scale Industries Association of Zambia, DBZ, CEEC, Bankers Associations of Zambia, TEVETA, NTBC and cooperating partners, among others.

The last pillar focuses on recommending clear and implementable incentives for MSMEs to government to enhance their growth and contribution to economic development. Tax holidays (income tax, customs duty) and exemption from payment of licencing fees or manufacturing license required for such an enterprise under any law are some incentives it promotes.
The core of these pillars is to stimulate self-discovery among MSMEs, identify opportunities, generate and evaluate their business ideas (before implementing them), effectively plan on how to raise capital, starting-up the business, realise growth and finally yielding results. It is envisaged that the value of one enterprise will empower others in terms of wealth and job creation and provision of quality goods and services, thus creating a pool of entrepreneurial transplants in all sectors of the economy that will enjoy all-weather economic renaissance in the country.

Zambia: AGOA 2011: HOW CAN ZAMBIA YOUTHS BENEFIT?

Clive Siachiyako

The African Growth and Opportunity Act (AGOA) was enacted by the United States Congress and signed into law by President Bill Clinton on 18th May, 2000 as a component of the Trade and Development Act 2000. The Act seeks to enhance trade and investment between the United States and Africa by providing for one way trade preferences to products originating from eligible AGOA countries. AGOA builds on the existing Generalized System of Preferences program to allow eligible AGOA countries to export over 6,000 eligible products to the United States of America duty-free, with a special focus on value-added and non-traditional products.

As a result of this initiative, the volume of trade between the United States and Sub Saharan African countries has increased, with notable successes in the oil, clothing, footwear, textiles and agro-processing sectors creating over 400,000 jobs and supporting millions of poor and vulnerable communities across the continent engaged in exporting industries. Initially, AGOA was set to expire in 2008. In 2004, the United States Congress passed the AGOA Acceleration Act which extended AGOA to 2015.

There are currently ongoing consultations in the US Congress and among the African Diplomatic Corps in Washington DC. regarding reforms to trade preferences and as to what happens to AGOA after 2015. Some of the trade preference reforms that the African Diplomatic Corps are currently pursuing with the US Congress include extending AGOA on a long term and sustainable basis, making the third fabric rule permanent, granting duty free and quota free access for all agricultural products from AGOA eligible countries except for sugar, to provide trade development assistance and capacity building and revise the AGOA rule of origin for canned tuna.

In 2010, as Zambia took over the Chairmanship of AGOA , the Zambian Ambassador to the United States of America, Mrs. Sheila Siwela was appointed Co-Chair of the Economic Development Committee of the African Diplomatic Corps in Washington DC. teaming up with the Ambassador of the Kingdom of Lesotho, Ambassador David Rantekoa as the other co-chair. With added and unwavering support from her economic and trade officers at the Zambia Embassy in Washington DC, one of her current major responsibilities and ongoing efforts are to engage the US government and Congress on the improvement and review of AGOA trade preferences on behalf of and for the benefit of all AGOA eligible countries.

Zambia will become the fifth African country to host the AGOA conference after Kenya, Ghana, Senegal and Mauritius from 6th – 8th June, 2011. The 2011 AGOA theme is loud and clear, “Enhanced Trade Through Competiveness, Value Addition And Deep Regional Integration.” The AGOA Forum is held annually bringing together several government leaders and private sector stakeholders from Africa and the United States. It is held interchangeably between Washington DC and in an AGOA eligible African country.

“The choice for Zambia to host the AGOA Forum has come at the right time considering that the country’s economic performance and governance record have been on the positive in the past three years,” says Zambia’s Ambassador to the United States of America, Her Excellency Mrs. Sheila Siwela. She observes that Financial institutions such as the World Bank, the International Monetary Fund (IMF), the Millennium Challenge Corporation (MCC), the Corporate Council on Africa (CCA) are agreed that Zambia is on the right footing.

Additionally, she further notes that top US international Credit Rating agencies Fitch and Standard and Poor have, in the recent one month, independently given Zambia a “B plus” rating, a sign that Zambia is a good destination for foreign direct investment and that the country could be eligible to access funding from international bond markets. Early in March, Zambia was rated B+ for long-term foreign and local currency issuer Default Ratings by Fitch Ratings, placing the country in the same league as Ghana, Kenya and Angola.

Against this background, Ambassador Siwela adds that Zambia should not miss this opportunity of showcasing her potential as the next best destination in investment at this Forum considering that the country is enjoying increased construction and rising copper prices, a rebound in tourism, improved agricultural performance and most of all the peace and political stability that the country has enjoyed since independence. She adds, ”The bottom line is that Zambia is now ready for business. The AGOA Forum will be a great opportunity for business people from Africa and the USA to interact for the sole purpose of creating partnerships and opening up new businesses in both continents.

Zambia’s exports to the US markets under AGOA Act initiative have rebound to $1.4 million in 2010 representing a year on year increase of 1,093 percent. Exports to the USA market increased to US$1.4 million from a major decline with paltry export figures around US$121,000 in 2009. Minister of Commerce, Trade and Industry Hon. Felix Mutati was recently quoted in the media as saying that Zambia’s export figures to the USA including the General System of Preferences (GSP) provisions of the AGOA Act had risen steadily to US$10.9 million in 2008 from US$361,000 in 2006.

He however said the decline in exports posted in 2009 of US$33.7 billion is consistent with a decline from US$66.2 billion worth of exports from all AGOA eligible sub-Saharan African countries in 2008 due to the global financial crisis. He said currently, 90 percent of all AGOA exports to the USA are energy related exports. Other notable products are textiles and garments, automobiles. Processed agricultutral products, leather products, machine parts, metals, gemstones and handicrafts. Mr. Mutati said this in a speech read for him by the Permanent Secretary in the Office of the Vice President, Mr. Davis Sampa at a breakfast meeting for Ambassadors accredited to Zambia from AGOA eligible countries in Lusaka on March 23.

And according to the Office of the United States Trade Representative (USTR) in Washington DC, for the period 2009,Zambia’s main exports to the US included base metal (cobalt), precious stones (emeralds), spices, coffee, tea and metal ores. Zambia’s major imports from the US in the same year were machinery, rubber, organic chemicals and aircrafts. The USTR states that Zambia was the 167th largest goods trading partner of the USA with $67 million in total (two way) goods trade during 2009.

According to the USTR website, the USA exported $59 million worth of goods to Zambia and that in return Zambia exported a total of $9 million of goods to the USA making the USgoods trade surplus with Zambia at $50 million in 2009. Zambia is yet to take advantage of AGOA and translate its benefits through to increased non-traditional exports (NTEs). At present, most of Zambia’s AGOA exports are dominated by the mining sector, unlike its neighbours such as Malawi and Mozambique which have managed to export agricultural products to the US.

Within the Sub –Saharan region, countries that have fared significantly well under AGOA include Angola, Nigeria and South Africa whose collective exports for the year 2010 were valued at over US3 billion according to official statistics from the US Department of Commerce. Exports from the three top AGOA countries include sectors such as energy, mining and agriculture. Other countries such as Lesotho and Kenya have also done well under the textile and apparel sectors.

Expected to be attended by 37 African countries and the US, the 2011 AGOA Forum will attract between 1,500 and 2,000 delegates. The countries to attend are Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Chad, Comoros, Republic of Congo, Djibouti, Ethiopia, Gabon, the Gambia, Ghana, Guinea Bissau, Kenya, Lesotho, Liberia, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone,South Africa, Swaziland, Tanzania, Togo, Uganda and of-course Zambia.

Other delegates will include businessmen, international organizations and many private sector and civil society organizations. By hosting the AGOA Forum, Zambia will be at the centre stage of the global trade and investment arena. The Zambia Association of Chambers of Commerce and Industry (ZACCI) also supports the hosting of the 2011 AGOA Forum conference at it will help Zambian entrepreneurs to understand how to penetrate the US market.

ZACCI President Geoffrey Sakulanda says the benefits from AGOA would be clear for all to see because Zambian entrepreneurs would have an opportunity to discuss partnership arrangements with their US counterparts which would enable them to export high quality products into the American market. Mr. Sakulanda was also of the belief that the AGOA Forum in Lusaka would give local Small and Medium Enterprises (SMEs) an opportunity to exhibit their products and at the same time make business linkages with international SMEs. As time ticks closer to June 2011, it is important to ask a question, “ How can Zambia best benefit in the Africa Growth Opportunity Act (AGOA)?

There is need to take stock of the current industry infrastructure, the role of modern technology, the quality of Zambian products in order to fully exploit the Africa Growth Opportunity Act (AGOA) provisions. Zambia needs to use the position as current Chair of AGOA to lobby for fair trade between Zambia and the USA considering that the initiative’s lifespan is ending in 2015. From ByBen Kangwa