21.10.2015 Feature Article


21.10.2015 LISTEN

It started since time immemorial when civilization was running in an anticyclone direction with humanity. Be it as it may, people still had a way of transacting businesses through the barter system of trade where items and services were interchanged for mutual benefits. Today it's evolved, transformed and undergone so much innovation with the help of technology, we can now comfortably transact business over cell phones and the Internet which is much faster, easier, reliable, and saves cost if it's legit.

Business has become the very live blood of our world today. Without it, development and transformation of the world would come to a standstill. This makes it very integral and humanity would not survive without it literally. The question therefore remains; what then is business and how do we start up a new business? Business is simply the offering of goods and services for financial and industrial gain not necessarily money exchanging hands.

Starting up a business is the process of identifying a want or need within a country, locality, region, society, city or town and rendering a service or serving up a product of equivalence to satisfy this need or want. To make this happen an economically stable, logistically reliable and financially feasible environment is needed to facilitate this course.

Start up capital is very necessary when starting up a business. In fact, without a start up capital your business ideas will remain stacked up in your head without implementation. The fundamental problem of many graduates today. Very brilliant ideas but no resources to set the pace and ball rolling. Capital can be acquired through personal savings and borrowing i.e bank loans or even help from family members or friends .

Identifying the location is paramount in starting up a business. The location to be considered has to be a vantage point and extremely strategic. It has to be visible. Being visible is to some degree an advertisement on its own attracting walk in customers. The location has to be near the customer where so much cost would not be incurred on transportation to get to this location to a seek a product or service. When the location is too distant, customers will choose a substitute and a competitor whose pricing are relatively low hence leading to loss of customers. When the location of a venture is hidden , the business would lose customers again to competitors. This makes the choice of location very crucial in starting up a business.

Second step is identifying what service or product to be sold. Whatever the choice of product to be sold or service to be rendered is, branding and labeling becomes very key in winning customers. In the business world, appearance is everything, both personnel and products must look very attractive to persuade and attract customers.

The third step is to identify the cost or fee to be charged for this product or service. Here, care has to be taken not to quote exorbitant prices to scare customers and not to quote too much relatively low prices to record losses. Human resource is also needed to enhance this. The human resource is very keen for employee loyalty is integral in business, where business secrets are not revealed or sold out to competitors. The sort of treatment the employer gives to the employees would create a psychological bond between the employee and the employer. The reason behind the success of coca cola today where the secret ingredient used to prepare the drink is not leaked out to competitors hence imitation by competitors remains a mission impossible situation. For starters and sole traders, usually just one person would do if it's just retailing one intends to embark on but should it be a company more hands will be required to make this a success.

Having identified the location, human resource, product or service to be sold, one important ingredient is developing a good customer service. This is done by simply asking yourself a fundamental question "what will make a customer come to me instead of my competitor?" Is it my pricing or my interpersonal skills? Once this is identified, you capitalize on that. Sometimes a simple smile and a thank you will do the magic of sustaining a customer.

Another vital thing to consider in starting up a business is "pricing" and here the type of marketing style I would personally prefer is the "penetration" style of marketing where, reasonably low prices are quoted to gain customer confidence and trust so that in the long run when higher prices are charged, because of the initial trust built, lots of questions would not be needed leading to loss of customers. Don't worry about the initial losses for quoting relatively low prices for in the long run when the business is expanding, economies of scale would set in to cover the initial losses made. A rare privilege and luxury new businesses can not afford.

The focus here is on the customer because customer satisfaction is the area where many businesses today fail and I'm talking about both public and private corporations where service providers and producers alike begin to feel they're doing the customer a favor by attending to their needs. Logically speaking, every individual with an appreciable level of business knowledge would agree with me that, it is the customer in actual sense doing the producer and service provider a favor. We live in a highly competitive market where there are many sellers and many buyers of and for the same commodity. The question here remains, what would make a customer come to me instead of my competitor? The mere fact that the customer comes to you instead of your competitors mean they've done you a great deal of favor. One satisfied customer can make a company and one dissatisfied customer can 'unmake' a company. A satisfied customer is a walking advertisement and the vice versa. Maintaining a customer and gaining a new customer depends largely on the type of customer service rendered. This indisputable fact makes the customer very core and integral in the world of business for there would be no business if production goes on without customers patronage.

The question here remains what happens to the proceeds from the business. Here again I would suggest reinvesting the profit back into the business in what most business minds will call 'ploughing back profit mechanism' to quickly make progress as long as the topic here remains starting up a new business. Another important thing to consider is 'sales and collection' don't sell if collection is not guaranteed. Do not sell on credit to customers who are not trustworthy and hence lack collateral security. What is the significance of selling and recording high sales whose proceeds are yet to be realized or would not be realized at all leading to bad debts. Mostly, when we sell to family members and friends on credit, collection becomes rather somewhat cumbersome and unrealistic. If continued, leads to liquidation of assets and hence folding up becomes the ordeal when the business become bankrupt. This among many reasons makes businesses fail in this contemporary ever changing business world .

My name is Abdul Rafiq and today , I say let's do business

"Allah is my strength and inspiration "
© Rafiq Thompson
Twitter : @Rafiqharvey
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Email: [email protected]

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