Start-ups must go digital, diversify to succeed in post-coronavirus economy — Fashanu
Mary Fashanu is a business development consultant and coach with over a decade experience in creating strategy for start-ups, corporate organisations and public institutions. She is the founder of Maryfash Limited, a leading consultancy operating from Manchester, United Kingdom, with specialty in value chain, change management and business strategy. She has cofounded a number of companies including Isoko Y’afrika (African Market), a media, publishing & research outfit, and Vendii, an ecommerce platform that connects high-end event vendors with individual event planners. In this interview with ODINAKA ANUDU, she says start-ups must have digital presence and build audience to succeed in the post-covid-10 economy.
Coronavirus has exposed a lot of start-ups to inevitable failure. What should start-ups do post-coronavirus to stay afloat?
For start-ups to be able to stay afloat post- Covid- 19, they should consider going digital. It is not enough to be offline as business anymore. You need to have online presence.
They also need to build audience. There are different strategies to use to build your audience. Start-ups need to be able to collate audience information and build a mailing list. When you have a mailing list, you can still reach out to them, introducing your business products/ services again and keeping the relationship going.
Also, it is important to diversify service/product offering. For example, you are a fitness instructor and due to social distancing, you are unable to meet up with your clients physically for their sessions. You can create an online session on IG LIVE, Youtube or Zoom and run fitness session. Add a virtual training or fitness session to your packages so that your clients can enjoy their session in the comfort of their homes.
Offer something beyond your core product/service. I am a business coach for startups. I get paid to run business sessions with my clients. But I am not stopping there. I have courses available. I have ebooks available, and I have trainings. This is what I mean by diversification of service/ product offering.
Generally, why do startups and small businesses fail within the first three years in Nigeria?
One is lack of growth mindset. They are set in their ways and focus more on their intelligence and talents and do not believe they need to put in effort.
Another one is lack of proper planning. Starting and sustaining a business require proper planning from the beginning and along the way. Planning helps you to foresee certain situations and helps over them. When planning, you ask yourself ‘what if?’ This question opens up a whole lot of different scenarios that could happen to a business and if you plan well, you will be able to prepare yourself for dark days and you will be able to scale through because you had planned and prepared for it.
Next is lack of right support system. You need the right set of people in your corner on your entrepreneurial journey— People that will support and encourage you and help you physically. But not having the right people to counsel you the right way could me downfall as well.
There is also loss of focus on what really matters. A lot of start-ups focus on their competitors and what they are doing. As a start-up, your focus should be Customer, Pain points and Solutions (CPS). Identify your ideal customers, identify their pain points and then create solutions to fix those pain points. Also, why do you want to start a business? Your rationale will determine whether your business is sustainable or not.
From your experience, what should start-ups do to attract investors?
They need to have bankable business ideas/products. Investors need to know that they will get their money back. Also, you must be registered as investors need to know that you are legitimate. Again, be professional and prudent with funds. Know your numbers. Do you even know how much you need to make to break even? Do you know how many products you need to sell? Do you have a set price or you just sell to people based on who they are?
Moreover, have a process and system in place. You need to be seen and known for someone that actually knows what they are doing and not someone that is all over the place. If you cannot manage your business process well, how can you manage someone else’s funds? Similarly, have book keeping experience:
What mistakes should start-ups and small businesses avoid in their first one year?
First is thinking they can do it alone. No, you cannot do it alone. That will only lead to fatigue and burn out.
Two is spending unnecessarily. Ask yourself if you need what you are about to spend money on?
Next is having a fixed mindset, and thinking you are the best in your industry and need no learning and improvement.
How can start-ups raise funds to scale? What funding channels are available locally and globally?
Self-funding/bootstrapping is an effective way of startup financing, especially when you are just starting your business. First-time entrepreneurs often have trouble getting funding without first showing some traction and a plan for potential success. You can invest from your own savings or can get your family and friends to contribute.
Next is crowdfunding. This is where an entrepreneur puts up a detailed description of their business on a crowdfunding platform. They will mention the goals of the business, plans for making profit, how much funding they need and for what reasons. Consumers can read about the business and give money if they like the idea. Those giving money will make online pledges with the promise of pre-buying the product or giving a donation.
Also, angel investors –individuals with surplus cash and a keen interest to invest in upcoming start- ups— can help. They also work in groups of networks to collectively screen the proposals before investing. They can also offer mentoring or advice alongside capital.
Locally, you can source funding via Youwin Connect Nigeria, Tolu Elumelu Entrepreneurship Programme, Bank of Industry, Lagos State Entrepreneurs Trust Fund (LSETF) and more.
Are there roles government can play to support start-ups and SMES?
The government can enact startup-friendly public policy. Local, state, and federal governments should at least discuss how the public sector could fill that earlyfunding gap.
They need to have a dialogue between entrepreneurs and local government to better each other’s’ needs.
Are there steps a start-up can take to become a large enterprise or conglomerate? They should put system in place, and think big. Research what it takes to be a large enterprise of conglomerate and implement the strategy.
Also, angel investors –individuals with surplus cash and a keen interest to invest in upcoming start-ups—can help. They also work in groups of networks to collectively screen the proposals before investing