Starting a business is exciting but full of challenges that test your vision and strategy. Looking back on our journey, I realise that the biggest lessons came from understanding what we did not get right. If we had known these things earlier, it would have saved us a lot of time, resources, and setbacks. By sharing our experience, I hope other startups can learn from our mistakes and put these crucial checks in place to build stronger foundations from the start.
About eight years ago, my friends and I ventured into a business. We were about to graduate, and we were full of visions of what to do in the future that lay ahead of us. We had several meetings and brainstorming sessions. As our convocation approached, we thought we had everything figured out, and we could commence our startup. We put our resources and skills together. We also learnt new skills we believed would move our mission forward.
We studied businesses–the ones we were looking up to–in our country, and we could have said that we really had things figured out. We were fresh graduates with little or no financial resources. We spent the ones we had to acquire more skills to facilitate our growth. But we were determined not to let finances be a constraint.
We all gathered our little cents; everyone willingly released their little drops to make the dreams we had become a mighty ocean of reality.
In Nigeria, diversifying is common. All our model companies do that. They focus on food production (sugar, salt, noodles, spaghetti, etc) and diversify into cement-making factories and agriculture. In fact, at the time we were preparing to launch, one of our model companies was already building a refinery to diversify into the oil and gas sector. (It was a successful project, and now the refinery is operational).
Like our model companies, we planned to diversify and cater to food needs, agricultural needs, and fashion needs. Our goal was simple: we would offer quality solutions to every available problem. We started with what our resources could afford–poultry. Of course, we counted the risk; we made our first sale, then we kept some here and launched into fashion.
By the time we launched the fashion house, the poultry failed. We still had hopes since the fashion house was going smoothly. We kept producing lapels, but the demand was less than our supply. We needed more customers, and the money spent on advertising overwhelmed the business. Alongside, we were trying to get our business registered.
Soon, we ran out of cash to keep going, and then we decided to raise capital to rescue what remained. We wanted to try a food house instead. At that time, many people opted out since we kept putting into the business and had hoped that in two years, we would start making profits from the business. We shared with new people, and we got one person to believe in our vision; she put some money into the business, and we started operations again, this time in popcorn production.
We started off fine, surveyed spots and all that was needed to make the business expand in a short time, and we started making profits massively. Because of our vision to expand, we didn't share the profit. Rather, we kept funding the business. We got other necessary things to ease production, and in no time, we got enough facilities to expand. The only thing remaining was to secure a space in another location. Then the pandemic struck.
Post-Pandemic Struggles
The aftermath of the 2019-2022 Pandemic left a negative mark on so many businesses, and our popcorn business was not spared either. After the pandemic, we moved to a new space, but this time, we had machines to run two spots, but we could hardly get one; all the funds we had were targeted to produce more until the total lockdown and that caused a loss as there was no buying and selling during the lockdown.
Post-pandemic, we discussed strategies to raise capital, but this was met with cold feet from the other lady who had given us money to get back on our feet to start the food house. Her view was that if the business could not yield profits, we should consider liquidating it. She was no longer interested in the business, and she wanted her initial capital back.
Although we found a way to raise funds to save the business, we had to use the profit to keep paying the lady back gradually, which impacted the business negatively. We didn't want to sell any of those machines to pay back because we believed we could expand in no time. By the time we paid back, the business struggled, so we decided to reevaluate the business. We have done all we could; maybe we should have done that post-pandemic instead of relaunching immediately after the lockdown.
Uncovering The Real Gaps
When things fell apart, we decided to take a step back and reflect. I spent time reading books on business to understand where we went wrong. We were not completely off track. We did get some things right. But we also overlooked key areas that many startups tend to ignore.
Neglecting these fundamentals is like putting the cart before the horse. It may feel like progress, but without a solid foundation, lasting success is unlikely.
What We Got Right
Vision: We had a clear vision. We set short-term and long-term goals, and we counted the cost to get there. We shared this vision among friends who believed in it and were willing to invest.
Learning: We took time to learn the skills we needed for the various businesses we ventured into.
Resilience: Our determination to make it work kept us going through several setbacks.
These are things every startup should prioritise. Having a clear vision, understanding the market you want to enter, and building resilience are essential for any business. But our experience also taught us that getting these right is not enough.
We focused on the right values but overlooked other crucial elements that ultimately affected our
What We Could Have Done Better
Diversifying: We diversified too early. The poultry was doing well, but we were not yet recognised as a brand before we diversified.
Branding: We focused on solving problems with products instead of becoming a well-structured and well-recognised brand that people can trust to solve their problems.
The use of Minimum Viable Products (MVP): We should have produced MVPs instead of making mass productions for lapels in the fashion house.
Digital Marketing: We didn't maximise the digital market (social media). We were waiting for the business to be well-recognised before we put ourselves out there on social media; we could have expanded our reach with the use of social media.
Organisational Structure: Our organisational structure was wrongly managed. We thought we would improve this as we grew, but we had it backwards; we were meant to put that in place in such a way that it became our compass for growth.
Final Wrap
From what I’ve learned, many successful businesses focus on the very fundamentals we neglected. Our ambition pushed us to expand quickly, but this experience exposed the gaps in our strategy showing me that growth without a strong foundation only leads to setbacks.
As a startup, you need to prioritise building a clear brand identity, test your ideas early with minimum viable products, leverage digital marketing from the start, and establish a solid organisational structure. Focusing on these areas early will help you avoid common mistakes and give your business a better chance to attain lasting success
Reflection Time:
What has your organisation got right so far and where do you need to do better?
Comments
Post a Comment