When enterprise is in identity crisis

This is the stage where the business is too big to be small and too small to be big. This puts on you demands, limitations, pressure and confusion to say the least. PHOTO | SHUTTERSTOCK

By MURORI KIUNGA
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Summary

• There is no shortcut, and the best advice is to spend the precious time available looking for ways of marketing the business and developing products to increase revenue. The reality is that the capital needed to get navigate the business through ‘no man's land’ has to come from the business itself.

Anyone who has grown business from the scratch to maturity will tell you there is a time when they experienced something akin to identity crisis. It is when the business is in a stage that experts describes as ‘no man’s land.’

This is the stage where the business is too big to be small and too small to be big. It is a little like being teenager - in some instances you are treated as a child and in other instances like an adult, depending on what the other person is looking at or the interest thereof. This puts on you demands, limitations, pressure and confusion to say the least.

A business that is in ‘no man’s land’ is considered a ‘child’, and too small for instance to whet the appetite of financiers, investors and big corporations looking for partners.

Yet, when it comes to compliance with taxation, labour laws or sourcing Business Developing Services (BDS), they are considered ‘adults’ and are expected to behave the same.

Just as there is no clear demarcation to mark when a boy becomes a man, you cannot draw a line to mark ‘no man’s land’ boundary but in most cases businesses that have more than 20 employees, but less than 100 fall in this category.

It is one of the most energy-draining stage because it is when the leadership and the discipline of the owner is tested to the fullest. What used to be simple tasks like hiring and firing employees, handling complaints and disputes, accounting and so on becomes a difficult and complex process. A simple error of judgement in these areas can easily land you in court or on the wrong side with the revenue authority.

It is a stage when business owners realise they are losing control and their own competence, skills and reputation is not sufficient to move the business forward.

To navigate this stage, one must quickly put in structures and systems in the business - hire experts with talents and skills that enable one to compete at par with big players.

Seek services of competent lawyers, accountants, human resources experts and other relevant consultants to ensure compliance with legal and regulatory requirements.

Invest heavily in low-cost marketing strategies, effective cost-cutting, inventory control and optimisation of resources including one that is most valuable- the human resource.

These are the greatest weapons because as mentioned above, the business is not big enough to attract the capital it needs.

Avoid the common mistake of spending much energy looking for financiers and investors who distrust and sees the business as too small and dangerous.

There is no shortcut, and the best advice is to spend the precious time available looking for ways of marketing the business and developing products to increase revenue. The reality is that the capital needed to get navigate the business through ‘no man's land’ has to come from the business itself.

Most entrepreneurs are prone to mess their business just as most people mess their lives during their youth when they are neither adults nor children.

Mr Kiunga is a business trainer and the author of ‘The Art of Entrepreneurship: Strategies to Succeed in a Competitive Market’