By Success Reporter, This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Doing business is probably many people’s vision. This is especially so for an increasing number of young professionals today, who are fast taking the issue of self-employment seriously, and quitting their jobs for entrepreneurship, more than ever before. However, not everyone who started his or her business has a success story to tell.

There are many tales of people, including well-paid and successful executives, who left their jobs to become entrepreneurs, but failed to make it. Reasons for their failures vary.

Business experts say that most small and medium size enterprises (SMEs) in Tanzania, and East Africa generally, have not been fully reaping from the opportunities of expanded markets over the years because they lack necessary management skills.

Ironically, this applies to former managers and executives, who before they ventured into the murky waters of small and medium enterprises, held senior management positions for years.

So, how does the problem of ‘lack of skills’ explain the failure by people with impressive job experiences to make it in SMEs?

In his book, ‘The Art of Entrepreneurship: Strategies to Win in a Competitive Market’, Murori Kiunga offers some insight into the challenges people who are quitting their jobs and trying their hand in business are facing.
Success looks at some of the helpful tips he highlights:

Start small
There is a saying that, “Even the mightiest and most ruthless African lion started out as a lovely cuddlesome little cub.”

Every business should start small. The largest and most profitable companies started as an entrepreneurial idea.
A friend who claimed to have just concluded a comprehensive research for a business he has been planning to start for a long time told me one mind-boggling statement.

He said: “Out of the estimated 80 per cent of new businesses that don’t survive to maturity, most of them are started by highly-skilled people with impressive work experience, most of them having resigned from top positions in the corporate world.”

In other words, people leaving jobs either by choice or by default to start own enterprises are at the highest risk of failing in business. This defies common logic.

Anyone would expect people who have excelled in their previous jobs, have high net worth connections, resources and highly skilled in the industry to equally excel in their own business.

Normally, we would expect those venturing into business without any prior requisite experience and or adequate capital to form the majority of failures. This is not so.

Apparently, most of the advantages that people leaving employment have work against them.
Their experience of operating within or running a large corporation with established structures and division of work becomes a liability when it comes to running a start-up business.

Multi-tasked
In a small business, there are no structures and the owner and key employee(s) must of necessity be multi-tasked. Excellence or strength in one area cannot compensate for weakness in another area.
Perhaps the worst mistake is failure to understand the entity of a small business.

They think a small business is a small corporation. It is not! I will use the familiar analogy of human life to explain one important truth that will make you understand better the dynamics of a small business.
Physically, a child looks and resembles an adult in almost every aspect.

The only major difference is that everything looks small. But that does not mean that a child is a small adult.
A child is a child. This is not a mere tautological phrase. A child has its own unique way of seeing the world, thinking, doing things, eating habits and a lifestyle that if an adult tried to imitate would be thought insane.
Likewise, a small business is not a small version of the big corporation.

The two, although from the outside looks may appear similar, operate on very different platforms. One is not a smaller version of the other. They are as different as a child is from an adult.

This is precisely why many people who leave corporate employment armed with several years of experience soon realise, after starting their own businesses, that their experience is not only useless, but a liability in running a small business.

Most of those leaving employment armed with capital, experience and contacts usually enter the market in bravado, confident that things will be a continuation of their past track record, only to be met by the stark reality.
It may take time before they learn that they are in different territory altogether.

Unfortunately, most learn when they have exhausted their capital and bleeding in debts by doing things as if their business is a small corporation.

They often hire highly paid staff, establish office in prime areas, adopt a high lifestyle that business cannot sustain.
There is nothing wrong with paying employee high salary, setting up offices in prime area or leading a lifestyle of choice.

But it does not make sense only if the business is not making enough profit to sustain this.
It is absolutely wrong to do this on borrowed money or eating into capital hoping soon it would generate enough profit.

Remember hope is not a strategy.
As a rule you should never use future income to finance current non-essential expenditures.
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