I was talking with a relative last week and the conversation turned to business. She runs a clothing stall at a busy shopping mall in Harare.
“Do you know that this past week has been the worst in my business? For three straight days I did not make a single sale and I went home empty handed. That has never happened before,” she said.
“Yes. Business is very slow. This liquidity crisis is affecting all sectors of the economy, except maybe indigenous bankers who can just siphon depositors’ funds when they get broke,” I replied.
The question on many potential entrepreneurs’ minds is: “What line of business can I do that will give me the most profit?” No one can answer that for you. But you can greatly improve your likelihood of success in business by seeing good opportunities and grabbing them ahead of anyone else. Opportunities are everywhere; but as Louis Pasteur said over a century ago, “Fortune favours the prepared mind.”
You have to be ready in order to grab an opportunity.
I like the strategic thinking of the leadership team at Zimplow Limited. Explaining the rationale behind their decision to acquire the majority shareholding in Tractive Power Holdings Limited, the directors said while growth opportunities existed in their traditional and core animal-drawn implements business, better growth lay in the tractor-drawn farming equipment business as well as the mining sector.
Tractive Power offers Zimplow the opportunity to increase revenue while reducing costs through exploitation of regional cross-selling prospects and economies of scale. That is why the directors decided to bid for the shares when the government took a decision to dispose of its stake a few months ago.
How can you see opportunities before others do?
One of the most useful tools in strategic planning is the Swot analysis. Swot is an acronym for Strengths, Weaknesses, Opportunities and Strengths.
Simply knowing what this means is not very useful; to avoid missing opportunities, you need to continuously carry out the analysis with your team on a regular basis.
An ordinary business owner can run the same business the same way for decades. But real entrepreneurs are always on the look-out for ways to change. there is always a better way of doing things, a better market, a better product or service offering, a better way to achieve their mission and attain their goals.
How to carry out a SWOT analysis
The first step is to look at your strengths. These are usually easy to identify, as customers, suppliers and other external stakeholders will tell you if you ask them.
Your sales records will indicate where you are particularly strong when it comes to your product or service lines. Once you know your strengths, find ways of improving on them to grow your business and outclass the competition.
You should know your weaknesses and tackle them so as to stop your business under-performing. Weaknesses are usually in the following basic forms: poor financial management, lack of marketing focus, management and personnel weaknesses and inefficient production.
External changes provide opportunities that a well-managed businesses can turn to their advantage. Changes in the organisation and its people, as well in the broader business environment, are taking place all the time. Instead of seeing only problems, look for the opportunities behind the problems.
There are always threats as a result of both internal and external changes. Some threats could be minor while others could be fatal to your business. Be aware of them, be prepared and protect yourself.
Don’t miss the BusinessLink Networking Breakfast meeting on June 27 at Gaby’s Restaurant in Harare. Business strategist Christopher Sithole will talk about why your business needs a regular health check and how you can identify your weaknesses and tackle them.
If you wish to join my mailing list and receive my free newsletter with more business tips, please send me an email or visit my website http://smebusinesslink.com.
Phillip Chichoni is a strategic business planning consultant who works with SMEs and entrepreneurs. You may contact him by email to firstname.lastname@example.org