Why Most Small Business Fail
Each year in the USA 15,000 to 20,000 industrial and commercial companies go out of business. A majority of these are small businesses and their failure could be attributes to two major reasons: Competition and Specialized Personnel.
Each year in the USA 15,000 to 20,000 industrial and commercial companies go out of business. A majority of these are small businesses and their failure could be attributes to two major reasons: Competition and Specialized Personnel.
Small businesses face more intense competition. More importantly, small business owners do not have specialized personnel found in large organizations to handle complex business problems. They simply do not have the capitol to afford them or work load to justify their full-time employment.
Consequently, most small companies have real trouble identifying and solving problems in their marketing, sales, operations, inventory control, paper flow, profit, operating expenses and general organizational procedures.
At Mabi Conti International Inc., we provide the much needed specialized business experience and knowledge know-how. Our full force is dedicated to objective, hard examination and our professionals will work with you as long as necessary to isolate, define and eliminate your problems. We will explore all aspects of your business with your total welfare in mind.
We will implement ways for you to operate your business effectively, organize staff, manage and produce to maximize profit. There is no Business we cannot improve.
Re: Moving Africa into the next century
Many African countries have begun opting for selective American styles of tackling political, economic and social problems. This lifestyle changes has created vast African market opportunities for anyone with quality products and services.
So far, American companies have not seen reasons to aggressively campaign for markets in Africa. This can most likely be attributed to their unfamiliarity with the African marketplace. It is Africa's responsibility to promote her markets.
In the new world order, instead of waiting for handouts from the West, Africa has to start promoting herself in earnest, a move that will undoubtedly create opportunities for her citizens.
Mabi Conti International is an Atlanta based export management consulting company that understands the African plight. We are also in tune with the American business tendencies.
We are launched a 90-minute video tape entitled: "Exporting-Selling To The Africans". We plan to produce a video for each country in Africa. These tapes will be geared towards promoting and marketing each county's assets.
Africa has so much to contribute. We would like to discuss further with you our strategies to help facilitate the change in Africa that will propel her into the next century.
The African Marketplace, January 1995
Africa is the most profitable international market in the world, not because of its size, but because of unprecedented customer loyalty.
I have preached this reasoning to Americans companies for years. Those who believed me, like everyone else attempting to trade in Africa, face an uphill climb in sorting through the continent's varying market strategies. Still, I argue that lack of competition and Africa's demand for western products, almost always makes earnest efforts highly profitable.
In my booklet, The Secret Of Making Money in Africa and on local radio and television, I have pointed out some of the dos and dont's of doing business in Africa, while being careful not to give the impression that establishing a business relationship in Africa is easy.
In Africa, contacts and cultural knowledge clears paths to export markets. Beyond all else, I understand this, I can anticipate and overcome culture, tradition, and life-style and business-style that could otherwise sabotage an African export transaction.
In started consulting company to create and endorse America companies interested in exporting to Africa. I wanted to bridge the gap between real and perceived realities of doing business in Africa. Selling the idea of Africa as a viable, valuable customer to manufacturers, chambers and all other international organizations has been my mission.
I applaud your awareness and efforts in this area and would like very much being part of your experience. My understanding of the natives, skills cultural know-how, personal interest and enthusiasm uniquely position me to help promote your products and services in Africa.
The African marketplace is no place to go alone
EXPORTING, Why consider the African marketplace, (2002)
EXPORTING, Why consider the African marketplace, (2002)
Africa is difficult! That is what many American business people think about doing business in Africa. Typical reservations are, "Those countries are always in the middle of a coup d'etat". "You can never get your money out of the country in hard currency". "They may nationalize my investment". "There is nothing in Africa but natural resources controlled by multinational companies". "Africans can not be trusted". "Africans are not advanced enough to handle technology". "Africans can not afford our products and services". "Africans are in the dark ages".
These opinion are mainly shared by people who have never done business in Africa and who are very biased, uninformed and are unaware of the vast changes taking place in Africa, long before the changes in Europe.
In many respects, its easier and more profitable to do business in the changing Africa of the 90's than the turbulent regimes of the former eastern bloc or in the highly competitive newly formed EEC.
Africa should not be treated as a homogenous entity. To do so would obscure or confuse the great diversity of the continent. Treating Africa as a single economy or ignore the range and great variance individual economies can lead to inappropriate and incorrect conclusions. The primary difficulties are that it makes little sense to consider these individual countries collectively as single markets.
Each country has its own sets of institutions, governments and regulations for both domestic and foreign policies that affect business in that particular country. In addition, each government poses different restrictions on private activities.
Thus basing or comparing one country to another could lead to wrong conclusion and generalization because of the different restrictions and regulations. Thus each country should be treated separately and each market should be looked into as a separate entity with different sets of marketing strategies.
These strategies even vary within a country itself. Understanding each market is the key to doing business in the Africa. Here are some of the reasons why all company should consider exporting to the African market place.
SELLER'S MARKET
INCREASE PROFIT POTENTIALS
EXTEND PRODUCT LIFE CYCLE
SHRINKING DOMESTIC MARKETS
FASTER MINIMUM EFFICIENCY LEVEL
GROWTH POTENTIAL
TIMING IS RIGHT
EXPAND SALES VOLUME
EXPLORE NEW MARKETS
Things are rapidly changing in Africa, the image of Africa as being a place of gloom and doom is misleading. It masks everything important that is going on in Africa.
EXPLORE NEW MARKETS
According to several studies, nearly 90 percent of all small to mid-size companies do not export their product and services. Similarly, for most mid-size companies, exporting is still treated as a waiting game, a game of chance and a sideline, if its done at all. However, for both groups, the cost of not exporting is very HIGH.
Many Americans companies have both the potential for growth and the willingness to grow, but yet they still fail to do so, when its comes to the international markets, particularly the African market place. The most obvious reasons companies do not seek to develop new markets under these circumstances is simply the failure to recognize that new markets exist outside America, particularly in Africa. This can be due to either lack of opportunity to explore the African market place or lack of effort to find out what opportunities exist in Africa.
Despite the opportunities in exporting to Africa, many companies simply suffer from the fear and excessive caution. Many American companies refrain from the African market place because of excessive and unrealistic fears and their views of Africa. Any business growth entails some form of risks, adjustments and also new problems. However, the benefits of exporting to Africa far out weigh the cost. Excessive unrealistic fears obstruct much potential development that could be beneficial to both the home markets and the new African markets.
The success of yesterday is not a guarantee for the survival of today or the existence of tomorrow. New ways should constantly be formulated and implemented to meet the needs and the demands of tomorrow. It also should be noted that statistical data of yesterday are only valid for yesterday. Today's events are entirely different; hence new strategies should always be formulated and implemented.
In the new world order, most companies are seeking and searching the global market place for new markets. The world market place is fast becoming a stateless and boundaryless markets, in other words it is now a "global village", and any one country can no longer survive from her domestic market alone. Hence producers are concerned about new and greener pasture to sell their products and services.
Africa is roughly 850 million people and still growing with 53 countries. 90-95 percent of her products and services are imported from the west; American presence in Africa roughly amounts to about five percent. Americans cannot afford to be left out from the African market place. American companies should not hesitate to explore these markets, the last great frontier of the 20th century. The failure of yesterday should not be the judging factors for today, instead constructive and aggressive marketing campaign should be encouraged, just as they did with the EEC and the newly formed USSR markets.
In developing and formulating these strategies for the African markets, the following should be considered:
- International culture of business
- Common culture of business
- Relationship based marketing
- Ideas are the coins of the kingdom
- Courage and guts
- Just do it, it works
Consultants with African market know-how contact with local cultural background and familiarities with the American marketing approach should be used to explore these new market place.
Another significant approach is the utilization of the abundant human resources in your backyard. Talented, American-educated trained Africans should be used and incorporated in your business strategies. They would lead you and your company to the market place. "Who can best sell to the Africans, than the Africans? This is one of the most effective approaches to the African market place. Yet American companies constantly avoid these abundant human assets found and grown in American.
SELLER'S MARKET
Any country that produces more than it consumes, is considered a buyers market, because the consumer has the option to buy exactly what they want from the market at any time especially when there is a high degree of competition involved.
On the other hand, if a country produces less than it consumes, then this type of market is considered seller's market because the seller controls the market since there very few local producers and the demands are very high.
Now consider the African marketplace, where most consumers buy whatever is obtainable and available in the market place. In Africa, the seller controls the market, hence the term "Africa is a SELLERS MARKET".
In Africa, between 90-95 percent of the products and services are imported from the west, American companies need not be a house-hold name to win African consumer's trust once an appealing products, services and constructive business ethics are fine-tuned to meet the test of the international market place and the demands of the African market place.
The only challenge for American companies is to spend time to study the consumer behavior of each market and an aggressive marketing campaign put in place for each market. Therefore in Africa, your consumers are practically guaranteed, nowhere else in the world is there a market more readily available for Americans to capitalize on than the African market place.
I will start with a story about two sales men who went to a developing country, the sales men saw the natives bare footed, one of the sales man wired back home saying "There is no possibilities of sales, natives do not wear shoes". On the other hand, the other sales man wired back home, "Hurry, quickly and send stocks, natives need shoes badly".
The lesson of this story is that Americans have not learned to recognize market opportunities and are blinded by their comparison of the rest of the world to their standards and styles at home. If only Americans can realize the size of the African market and the golden opportunity of expanding their market-reach to a population of about 660 million people and it is estimated that by the year 2025, the population would reach about 1.6 billion people. This is a market not to be reckoned with, it makes all business sense to do business with Africa.
The share size of the market should be an incentive for any company wanting to expand their sales volume and increase their profit potential. Americans should stop playing the waiting game when it comes to expanding their market base. The African market place offers unprecedented market opportunities and profitability for American companies.
No matter the political, economic and social situations in most of African countries, African business people will still continue to do business with the rest of the world. These political, economic and social situations are ancient excuses used by Americans to omit the potentials of the African market place.
Before the advent of the NAFTA, Americans were very hesitant and worried about the buying power and potentials of the Mexicans, but from all the reports on NAFTA, Americans are benefiting more from NAFTA, Americans are selling at the rate of $1billion per week to Mexico despite the lower buying potentials, yet Africa is about six time the population of Mexico. Note that for every billion-dollar export, 20,000 jobs are created in America; now translate that to the African market possibilities.
In fact, on a business note, it will be a crime not to export and do business with Africa. Americans should take advantage of their Americanness, when it comes to the African market place.
EXTEND PRODUCT LIFE CYCLE
It cannot be mistaken that America is the most advanced country in the world. In America, the time runs, in Africa and the rest of the world, the time walks. Things that are obsolete in America are more than likely new in other parts of the world, particularly in Africa.
Due to the slow pace of the African continent, most of the products and services that arne out of fashion or out of style in America are new in Africa. The life expectancy of products and services in America are very short, therefore the short life expectancy of these product and services can be prolonged when new markets are developed.
Once again, these opportunities will only open up for Americans when the rights marketing strategies are put in used. As creative as Americans are, they would be very successful in introducing their American ingenuity to these countries.
My advice to interested American companies is to visit these countries with an American trained Africans to study the African markets and their buying behavior. There is no other market in the world where the consumers are readily available. The key ingredient to growth is increased sales; the African market place will make that possible and faster.
American businesses still think of the time when Americans had a continental economy and a growing pie. Americans must learn to drastically re-adjust her thinking to the new realities of competitive international economy when her economic pie is not growing at historic rates. It is not growing fast enough to satisfy all the demands placed against it, especially the challenges of international competitions, however, it is time for American businesses to start actively seeking the international market place.
American companies should start readjusting to the "once a buyer to now a seller", these changes have altered the Americans position of advantage in this modern realities of globalization. However, there is still hope, African market place offers that hope.
FASTER MINIMUM EFFICIENCY LEVEL
Efficiency level is defined by the maximizing production of labor and materials. The break even point is that point where cost equals sales and from that point on, company starts making profit, however, the demand and the size of the market affects this level.
Thus the bigger the market and the higher the demand for the products and services, the faster a company reaches this point. Hence the efficiency level could be achieved faster than anticipated if the demand for the products and services are more than previously calculated.
What this means is that due to the Africans affinities for Americans products and services and the share size of the African markets, most American company's efficiency level would be achieved faster and growth will follow. Hence the faster the company attains their efficiency level, the faster the company starts making profits. The goal of all companies is to start making profit as fast as possible.
The African market offers most American companies the opportunity to reach this level because between 90 to 95 percent of most of the products and services are imported from the west. Why can't Americans be part of this percentage? American companies should consider the viability of the African market place and should not be left out as in the steel, automobile and even in the consumer goods industries.
TIMING IS RIGHT
The timing is right for Americans to take advantage of the changes in the life styles and the shifting interests of the Africans that have created markets for anyone with appealing and quality products and services. Companies who take their profit margin seriously should no longer play the waiting game when it comes to exporting to Africa.
Things are constantly changing in Africa the negative imagery of Africa is blinding Americans form potential profits. Long before the wave of democratization swept through Eastern Europe, Africans were quietly re-assessing their colonial past. As Africans turn away from their colonial heritage, the opportunity for Americans to re-align themselves socially and economically with Africans open.
The spirit of the new world order is another major reason and in the new world order, African socioeconomic ties should take priority over political differences or ideologies. Pragmatism, not neocolonialism, is what is needed in a new relationship with Africa.
The floodgate of opportunities is now opened to well meaning business people around the world as African countries began the process of liberalizing their economies and inviting foreign investment in earnest.
In conclusion, American companies can change the winter of their businesses, however Americans cannot change Africans, but must learn to adopt a tailored trade approach do business with Africans.
Opportunity follows difficulties and Americans must take advantage of the opportunity. Opportunity is not guarantee, opportunity is a chance.
Africa is the window of opportunity for Americans. Life is too brief, not to take advantage of the opportunity at hand.
Welcome to Africa, our home, your opportunity