By Robert Bake Tumuhaise
This message
has been picked from a longer presentation that Dr Patrick Bitature made at the
Authors’ Forum organized by WORLD OF INSPIRATION in 2009. The entire
presentation is fully reproduced in the book #InspiredByBitature. Enjoy as he talks
about some common errors that you must avoid if you want to succeed in business:
Number one is flawed
assumptions: I am talking about wrong assumptions. If there are no
assumptions, there can be no errors because nearly every error is made because
you have assumed something. If your assumptions are wrong, the whole business
plan falls apart. Most people look at the numbers but ignore the assumptions.
If you think, “I will buy this product here and sell it there” but don’t
analyse the assumptions, you may get shocked. If you buy cement in Pakistan and
bring it to Uganda, what are the margins? In Pakistan, a bag of cement costs
6,000 Uganda Shillings. Transporting it from Pakistan to Mombasa costs about
10,000 Shillings. Selling it in Kampala is 36,000 Shillings. There is a margin
of about 15,000 Shillings to be made. But what are the other assumptions?
Aren’t there taxes involved? What are the other logistics involved in loading
your cargo on the ship? Aren’t there damages?
You have to first do your
homework on any business before putting money into it. In the 1990s, I was
working with Celtel and I used to earn 100 US Dollars on every sim-card
I sold. When MTN came, they said, “No, we will give you 5 Dollars but we
want you to come to us and let go of Celtel. You will be our exclusive
dealer.” I had to go back to do the numbers and to analyse all the underlying
assumptions before I could say yes or no. I was doing such a good job with Celtel
and MTN saw admirable qualities in me. They had interviewed many
people but still felt they had to work with me. They had listened to my story
and felt I was the kind of person they needed to work with. But they had to
convince me to let go of the 100 Dollars per sim-card and take on their offer
of only 5 Dollars. When they showed me their projections, I had to believe in
their vision.
I went to South Africa and
saw what was happening in the telecom industry. It was a revolution. I said
this is what we need to do in Uganda. I looked for money from every bank in
order to open up the number of outlets that MTN needed but nobody could
listen to me at the time. There is even a certain bank that I approached and
people working there said we could not even open an account with them. It was Greenland
Bank, ICB in those days, that I worked with as I struggled to open up
telecom shops. At that time, nobody had 10 shops. Are you mad? They will finish
you. Everybody had the keys to his shop. They would open in the morning, sit
there throughout the day and in the evening they would close and go home. This
concept of opening up a chain of shops and trusting other people was unheard
of. So everyone was laughing at me. Today, I have over 100 shops. Some of them
are in Kenya, Tanzania and Nigeria. I rarely go to these shops; all I do is
empower my staff. You have to trust your team. You have to build systems,
controls and procedures. Of course it took time to evolve, but in 10 years, it
made a big difference. Any business you look at, you can simplify it. Don’t go
into too many things that complicate your idea.
Watch
out for the assumptions you make while entering any business. One of the
assumptions that people sometimes make wrongly is that money will quickly come.
They are over optimistic about their cashflows. If there is one thing that you
can learn today that you will go with when you leave this room, let it be that
cashflow is more important than profitability. However profitable a business
is, it doesn’t make sense without cashflow. You may run a business and you
know that the profit is supposed to be so much at the end of the year, but if
you run out of cash midway, you won’t live to make that profit. If your
business model has got a poor cashflow, you will die, regardless of its
profitability. If your business model has got poor profitability but has strong
cashflows, you can fine-tune it here and there and survive until you get to the
level where you are making a profit. But you can’t do it the other way round. Don’t
be over optimistic. Watch your cashflow jealously.
Another thing you must
watch are costs. Overhead costs look so small when you are starting a
business but they are a serious factor. If you are not careful, overheads
can grow legs, take over your business and walk out of the building with it. You
want to rent nice premises, you are ready to pay the electricity bills. But you
don’t know so many things are going to come and hit you, like taxes which you
hadn’t factored in and they can close you down. Watch your overheads like a
hawk.
Another flaw is
undercapitalisation, especially at the beginning. Many people think “Oh, I
have saved 2 million Shillings, I have borrowed another one million, now I can
start this business.” It is vital that you first weigh your idea and know how
much capital is needed so that you can tell whether you are up to the game or
not. If your business is undercapitalised, you have overstretched yourself and
won’t like the experience. Before you join, talk to people who are in that field.
Share ideas with them. Get a mentor.
Then
there is the flaw of refusing to embrace new ideas. Don’t make your
business too much of a secret and fail alone in your cacoon. Avoid thinking,
“If I tell him and he gets to know that I want to deal in cement, he’s going to
also start bringing cement.” I have told all of you here the profitability of
importing cement; are you all going to go and bring cement? This mentality of
wanting to do the same thing needs to be overcome. You find one person has
succeeded in fast foods and everyone opens up a take-away business next door.
One person makes a video library, tomorrow you find many video libraries
opening up on the same street. If everyone is doing the same thing, we will
always find ourselves in the same rat race.
We
have to begin thinking differently. If you want to succeed in business, you
have to come up with a different idea and make a realistic business plan for
it. Those business plans are crucial, especially for you people who have
attained decent education. But remember that there are also many less educated
people who are succeeding in Kikuubo. Such a person’s ‘business plan’ is on the
back of a tattered cigarette packet, but he runs his business and it grows.
What about you who are educated?
Another common flaw is
people trying to justify a mistake or a failure. Earlier, I talked about
persistence, but now I must also talk about stubbornness. Being stubborn is
different from being persistent. Stubbornness implies that you intend to insist
on doing something despite the existence of evidence that you should not. A
stubborn person fears to admit that he/she is wrong. A persistent person, on
the other hand, is convinced that he/she has been right all along, and that
with a little bit of more time and effort, the veil of failure will be lifted
off and he/she will realise success.
Do not be too emotional
while making decisions. That’s a business mistake that has brought many down. You
want to sell Mercedes-Benz cars and you can only bring second hand; if there is
no market for them here, don’t insist and put your money in it just because you
like Benzes. If money is in Toyotas, bring Toyotas. The market has spoken;
listen. Don’t think, ‘I want to build a school and it is going to look like a
shrine because it’s mine.’ Don’t get sentimental. Get the numbers right, be
efficient and let the numbers and the facts decide for you how your business
should run.
Here is a very important one that you must
understand.
For many people, as soon as... (to be
continued)
What you’ve just read was picked from
INSPIRED BY BITATURE, Bake Robert’s newly released book that chronicles the
business journey and timeless wisdom of Dr Patrick Bitature, a Ugandan
entreprneur who raised himself from zero to a networth of over 100 million
dollars in 2 decades and continued to rise to the level where Forbes listed him
among the wealthiest people in Africa. Have your copy of this precious book
delivered to you now at only UGX 60,000 by contacting Abesage (0779214820,
0703703661) or Winnie (0700714369). Note that in today’s promotion, when you
buy 2 copies we give you the 3rd free. And if you are buying 5, we
give them to you at only UGX 165,000 instead of 300,000.
Ladies and gentlemen, also note that this
Saturday 14th April 2-7pm, a magogomus Financial Inspirational
Conference has been organised at Protea Hotel, Kololo, in which we learn from
Bitature and other business moguls face to face and then conclude by launching
this book. That day, Bitature will be
joined by Esther Muchemi (from Kenya), Dr Kazaire, Prof. Kasenene and other inspirational
giants to dissect the subject of money, wealth, business, investment, career
and success. Entrance is by tickets secured in advance at UGX 100,000 and
300,000 (VIP). A ticket entitles you to a copy of the book and a VIP one
entitles you to a copy autographed by Bitature and a networking cocktail with
Biature, the guest speakers and other VIPs.
Tickets are available at Skyz Hotel (on
top of Naguru Hill), Protea Hotel (Acasia Avenue Kololo), Simba Telecom
(Kampala Road) and WORLD OF INSPIRATION Centre (LLOYDS MALL Ground Floor,
Entebbe Road, Opposite Kamu Kamu Plaza). Remember, you can call/WhatsAp Abesage
(0779214820, 0703703661) or Winnie (0700714369) for instant delivery. It’s our
joy to serve you and ensure that you are inspired.
#PhotoCaption: Patrick Bitature in 2009
when he made the above Presentation
#InspiredByBitature
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