You’ve been nurturing your startup for a few years. You’ve established that there is a demand for your product or service, but now you need to grow the business.
The Anzisha Prize and Endeavor South Africa last week organised a Global Entrepreneurship Week event, themed ‘Collaborate, Not Compete’. The event was held at the African Leadership Academy campus and brought together past Anzisha Prize finalists from across Southern Africa, as well as business coaches and established entrepreneurs. Participants discussed strategies for entrepreneurs to scale their businesses and achieve sustainable growth.
Below are eight key takeaways from the event.
1. Recruit and retain employees by creating a great company culture
Young companies often face the challenge of spending resources on training staff, only to see them snatched up by other organisations with deeper pockets. Small companies can rarely compete on salary with large enterprises, but they can have a superior value proposition and attractive company culture. It is vital that small business owners clearly communicate their vision for the company with employees to ensure they feel part of something important. People are looking for purpose in the world, and your company can tap into that desire.
2. Know the end goal for your company
It was mentioned that entrepreneurs need to envisage the end goal for their companies, and then work backwards to devise a growth strategy. Do you want to end up as a listed company or are you happy with a 40-person organisation? Each of these scenarios requires different growth strategies.
3. Learn to become a manager
A successful company requires more than just an innovative business idea. Scaling your business involves effectively managing employees and putting systems and processes in place. Many entrepreneurs, however, are not natural managers, and will need to develop these skills. Alternatively they will have to bring in capable managers from outside.
4. Are social impact requirements holding back growth?
Social enterprises are founded on the premise of using commercial strategies to maximise improvements in human and environmental wellbeing, rather than maximising profits for external shareholders. One of the Anzisha Prize Fellows’ company was founded on strong social objectives, but has grown to a stage where there is now also a clear premium market for its products. Many venture capital investors typically don’t want to invest in businesses with a social agenda. However, the company cannot ignore its original social mission due to the fact that it has already attracted assistance based on this. One participant said companies should rather focus on growing the business first, and once they are established, implement additional social initiatives. Another participant disagreed with this, saying social enterprises can grow, while staying true to their original objectives.
5. Clearly define what is expected from employees
A basic job description is not enough. Make sure your employees understand exactly what is expected from them. Document in detail every aspect of a job, as well as the desired outcomes from a person’s employment. Although this is a time-consuming process, it will help you appoint the right people, as well as ensure that your employees know what is expected of them.
6. Do you need a co-founder?
Another topic discussed was whether entrepreneurs should seek out a co-founder. There were different opinions on this. A partner can offer much needed support for an entrepreneur, but if the relationship deteriorates it can be detrimental to the business. Selecting the right partner is of critical importance as the entrepreneur is likely to spend more time with his or her business partner than with a spouse. It is important that the partners bring different skills to the table, but that they share the same value systems and vision for the company.
7. Grow with project-based employees
It was argued that growth shouldn’t necessarily be defined as increasing the number of full-time employees. One entrepreneur said his company often brings in part-time people on a project basis; this way the company can grow revenue, without committing to full-time hires.
8. Make use of MBA students
Many international MBA programmes require their students to complete research projects in existing companies. SMEs in Africa can use these smart and capable individuals as a free source of labour to help grow their companies.
The Anzisha Prize is the premier award for African entrepreneurs aged 15-22 who have developed and implemented innovative businesses or solutions that have a positive impact on their communities. Follow The Anzisha Prize on Twitter, Facebook and YouTube.