Dream big, start small

A group of people, who had no prior business or investment experience, met to discuss possible investment ventures they could engage in. The ideas came flying fast and thick; some said real estate, others agro-processing while a good number suggested livestock farming. Still good.
Next, the people started saying what level of business they wanted to start at. One of the two people who suggested real estate investment wanted to begin with an apartment block in an upscale suburb. The agro-processer wanted to set up a $400,000 (Shs1.4 billion) grain milling plant. The livestock farmer wanted to start a farm with 50 cows that would be cross bred by a pure boran bull.

Opportunity worth pursuing
A business should have the potential of producing enough sales and profits to make it worth the effort of the entrepreneur but it does not have to start big. In fact, for a first time entrepreneur it is advisable to start small. Many people who want to start very big remain day dreamers and never implement their ideas. Others will begin but fail soon after due to lack of required skills and knowledge to run a big enterprise.

Master principles of business success
Successful businesses do not occur by chance but follow principles of business success. Start small to give yourself the chance to acquire and internalise these principles. How to attract, penetrate and maintain a market.
How to set up and manage the different systems within the business, such as: financial systems, human resource system, partnerships and effective relationship between the owner of the business and the workers in the business. Experience helps the entrepreneur to appreciate these principles and increase the chance of business success.

Moderate your risk appetite
When you are starting with your savings, you may not have a lot of money. But even if you had a lot of money you need to test the idea first before throwing all your life saving into it. Create a track record that makes you and your business venture attractive to financiers. Most financiers avoid brand new entrepreneurs with no business track record.

Emphasise marketing
Business is about marketing, take time to understand the market. First establish that there is a big enough demand for your product before bringing that container load of goods from China.
The same thinking applies when you are offering services; your monstrously big hotel could become a decaying monument if do not pay sufficient attention to market entry, growth and retention. Work on understanding the need of the market, the best way of approaching the market and what benefits you are offering beyond what competitors are providing.
Business success is the outcome of certain business processes. Do not crave for a business grown in steroids, patiently attend to the business idea. Dream big but start small.

THE WAY
Going about it. Start small to internalise business principles.
Managing.
Moderate risks.

James Abola is the team leader of Akamai Global, a business and finance consulting firm. Email: [email protected].