Unexpected Success of Startups & the Curse of Comfort Zones

05 Nov

Two years ago my cousin & I decided 2 open a Poultry meat shop. The logic behind it was with us being entrepreneurial in nature we formulated a plan to start a small business and understand the cogs that turn the wheel of retailing before we venture out to a larger & more risky dealings. After setting up shop on the outskirts of Nairobi (cutting down on operational costs) the business was to cater for the local market. Later on during my visits I picked orders from workmates, friends and family and business picked up from there. Ajust to toy around we decide to market ourselves via Social Media. In less than 6 months we found ourselves make large deliveries and recieving orders from whom had heard of us from the grapevine. Business had picked up way much faster than our wildest predictions. At times I had to play hookey from work to make deliveries. All this was done in the spirit of not to disappoint any client and any potential future business that come with it.
Many businesses usually start out with the mentality that there is a huge probability that the business wil fail. Hence most businesses always prepare for the worst, with many already perfecting their exit plans. Many schools of thought, from learning institutions to successful entreprenuers most of the time talk about proper planning so as to avoid running under, but rarely do we hear of adaptive planning in the event of unprecedented Major Success.
Due to our gameplan,our goal was to move volumes & invest on the quality of products & customer service. This alongside with the huge unprecedented spike in transactions brought about many challenges which came up way before as planned.
1. Manpower
This was our major headache. It even forced to even review whether to quit our day jobs immediately to address the pace of growth of business. Due to our business plan and profit margins we could not afford to hire more staff hence adding on to us an additional challenge
2. Operating Capital
The increase in orders found us being put in a tight spot. Increased orders means increase in storage, increase in liquid funds to finance supply, additional manpower,widen distribution chain, speeding up expansion plans etc etc. All this requires capital.
3. Quality Control
As indicated earlier the business, wanted to pride itself on it’s ability to cater to both low end & high end customers with undiscriminating high quality of service. Many at times we found ourselves choosing between clients e.g. A client from an upper middle class suburbs calls & orders large quantities of turkey, at the same moment a regular customer from the nearby village wants just a paltry size quantity of the same bird. Due to nature of the supply chain available stocks cannot cater to the orders. Who do you satisfy & whom do you dissapoint?
Also how do maintain standards of service with Increase & change in staff? This forced us to develop a standard training package for the employees. This became successful & hv even recieved requests to train other businesses staff.
4. Review of business plan
All the above challenges forced the editing and total review of the business plan. Business Plans are not static, and constant review may be necessary but be careful not to mutilate the main goals and objectives behind the business. Review may be necessitated by change in Market dynamics, income flow or new opportunities and challenges amongst other elements. Small or big, any variations directly affecting the business plan should not be ignored and the earlier they are embraced the earlier the business adapts to the altered playing field in time to soak in any blows or take advantage of opportunities

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Posted by on November 5, 2011 in Business


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