Business Education: The Bedrock of Entrepreneurial Survival Olusegun Olukoya

Presentation Objective Share a few perspectives on starting-up and running a sustainable business enterprise

One Hundred Year Old Institutions How many NIGERIAN institutions can you identify that are over a hundred years old?

Success Rate of New Businesses Half of new businesses are gone within six years of starting Nearly two-thirds are gone within a decade. No of Years % of businesses surviving

Do you think this is a true reflection of the situation in Nigeria/Africa?

Source United States Bureau of Labor Statistics (BLS)

A few reasons why businesses fail Wrong Understanding of the Market - Viability (Relative to business scale) or Picking a Niche That is too Small (relative to the product/margins) – Research and validate the market THOROUGHLY before you launch your business – Talk to prospective customers and find out what they really need (Understand your customer) – Understand the market dynamics Insufficient Capital (Start Small or Start Well) – Be conservative with financial projections – Staged investments - Plan on having adequate funds to cover costs (including startup losses) until your company becomes cash flow positive – Explore availability of supplier financing Lack of Competitive Advantage(s) – Herd mentality – Identify what can insulate you from competition – location, brand, technology, service

A few reasons why businesses fail Skill set mismatch – Get the needed expertise (Yourself or a professional) Poor Pricing Strategy – Cost + Margin Vs Value customers are ready to pay Growing too Fast – Focus on cashflow always Poor accounting - flying blind Infrastructure????, Government Policy, etc, etc, etc

Step back and think, does any of this apply to you today? How have you dealt with it?

Going Forward Understand the problem – Financial, Operational, Market, etc Seek Help in defining a solution – Mentors – Industry Leaders – Experienced Consultants Execute, Execute, Execute – Success is 20% inspiration and 80% perspiration

Failure is success if we learn from it - Malcom Forbes

Are you building your business to last for One Hundred years?

Corporate Governance A business is a distinct entity from an individual Instilling an appropriate framework for managing the rights and responsibilities of various stakeholders helps maintain that distinction Stakeholders in a business – majority shareholders – minority shareholders – management, – board of directors – other stakeholders

A key Principle Agency – the principle of transfer of capital from the shareholders to the control of managers. Stewardship – the role of directors’ role as guardians of the company’s assets.

Corporate Governance The average entrepreneur wears three hats Each hat has a different objective, hence leading to potential tension SHAREHOLDERS MANAGERSDIRECTORS Provide Capital To Agents For Appoints and Dismiss Stewards for Regularly reports Oversee

Tensions Dividend available to be paid vs. director remuneration Vs Executive Remuneration Management benefits vs. dividend Merger and acquisition vs. director entrenchment How you balance the tension is critical

Why? Good corporate governance contributes to business sustainability –Better access to capital –Command a premium from potential investors –Improve oversight, monitoring –Perform better operationally/financially –Ensure effective decision- making

Steve Jobs Sometimes life hits you in the head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. …… Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. …. So keep looking until you find it. Don't settle

The Successful Entrepreneur Passion for the Business Product/customer focus Tenacity Despite Failure Execution Intelligence The Successful Entrepreneur