Over the past two decades or so most manufacturing companies in the country have closed shop. Some of these factories have been converted into churches while a lot more have been left to be overrun by bushes and wildlife. In recent years a new kind of manufacturer has risen from the ruins of its predecessors. These are smaller, scrappier firms that would have had a hard time competing or even getting started in a better economy but in the current environment, they are thriving. Because of their very nature, most of these businesses embody a spirit of entrepreneurship and innovation which you will seldom encounter in the modern corporate environment. However, most of these businesses also have bad practices that are stifling any chances of growth beyond their backyard origins.
As more youths (particularly graduates) discover that the air-conditioned offices and desk jobs which they were promised and trained for in school can, alas, only accommodate only a tiny fraction of them, hopefully, more of these businesses will crop up in our towns and cities.
Do manage expectations
A few years ago a small furniture manufacturer decided to convince his customers that the coffee tables he was selling were made of genuine mukwa wood. My mother was one of the people who bought one and was very happy with what she thought was a bargain. Everyone who came into the house liked the table and complimented her on it. A month or two later the table which was supposedly made from a hardwood started falling apart revealing itself to be made from nothing more than ordinary chip wood.
An entrepreneur sells more than just products and services; they also have to sell their vision. This is because neither their company nor its products have established any kind of reputation whether good or bad. So in order to get their merchandise moving most of them to resort to big promises and declarations. This generally means overpromising your product’s qualities and properties. Overpromising means that a large portion of your customers will be inevitably disappointed. The problem with this is that it can overcast any genuine advantages your product has over its competitors. While stretching the truth can get your foot in the door, it is a generally unsustainable way of running a serious business unless your core business is scamming people. A firm needs the positive word of mouth and repeat customers in order to survive and you will not get either of those if you set every new customer up for disappointment.
Do get your raw materials from smaller suppliers
If you were to start manufacturing soap from your garage today it is unlikely that you would get your raw materials from the same suppliers as Unilever. To begin with, you wouldn’t be able to afford their minimum order quantities. If you run a small manufacturing firm you are more likely to get most of your raw materials from businesses that are closer in size to your own. Remember this if you ever want to start your own manufacturing business: make sure you can find a supplier who is willing and able to supply the small amounts of raw materials you require. Coaxing bigger suppliers to lower their minimum order quantities for you will only result in frustration. This is because once suppliers suspect that you are smaller than their typical clients, service starts to deteriorate rapidly as they try to waste less time on you.
Do seek big clients
The size of your operation should not deter you from approaching big companies and organizations for business. I know a gentleman who converted his home kitchen to a small sausage manufacturing plant. Not satisfied with selling to friends and neighbours he started approaching restaurants and other food retailers. One of the companies liked what he was selling. After the mandatory inspection and licensing of his kitchen by the city’s health department, he was supplying his Russian sausages to a fast-food chain. A lot of established companies will gladly do businesses with smaller firms if you have your papers in order and you meet their quality standards.
Don’t use low prices as an excuse
There is a common saying which goes: you get what you pay for. Some businesses have adopted this as a philosophy and then taken it to extraordinary lengths. They offer low priced products at qualities so low that they are better classified as defective goods. Everyone loves a bargain but it ceases to be one if your products are of such unexpectedly poor quality that your customers are left angry. There is a minimum level of quality that even the thriftiest of your clients expect from you. Low prices will not exonerate you for poor quality because the people most likely to be lured by lower prices are the ones who will remember being “cheated” out of their money.
Don’t think too big to start
A newspaper reporter once asked a university student, who was exhibiting his design and model for a plant which makes fuel from plastic at a local trade fair, how much he would need to build and commercialize his project. The young person unabashedly declared, “one hundred (US) dollars”. While I applaud his ambition you have to realise that the most frequently stated reason for not starting a business by young people is lack of capital. If every entrepreneur’s business idea required that much money to implement we would have far lower business activity in the world.
This becomes a bigger problem as prospective entrepreneurs gain more education. I have noticed that degree holders will always overestimate how much resources are needed to start business ventures. Even worse they tend to underestimate their odds of failure despite most of them having little to no business knowledge or experience. These are the same people who have the training to start innovative companies but they are left wallowing in self-pity and unemployment because they are waiting for capital from a miraculous source.