Zimbabweans living in the diaspora have a love for the country that can not easily be broken. This love shows in their desire to invest in Zimbabwe. Especially in small or start-up businesses bringing novel ideas to the Zimbabwean market the appetite goes unmatched. Business is, if nothing else, a complex adventure with many challenges to deal with and that’s when things are going right.
Investing back home for those in the diaspora comes with all the risks involved in everyday business and its additional risks. The inability to be hands-on in the business means the possibility of being in the dark about what’s happening in the business – if anything is happening at all. We all know that one who send home money for construction and received a rude awakening when they discovered no construction had been done. Here are some tips to prevent such situations and manage your business from the diaspora.
Know the business
Well, this is basic advice for any business venture it’s more important in the diasporan investor’s context. Many a time people have presented business ideas to those residents in Zimbabwe. More often than not the business is based on our complicated systems of currency and regulation. These are red flags to note. I’m not opposed to taking advantage of arbitrage opportunities but the Zimbabwean policy environment is a hotbed of volatility. Here today, gone tomorrow is the law our leaders live by. Policy tends to be reactionary and this leaves people caught out. Firstly, if you don’t understand the business don’t do it. In addition, if the explanation sounds too complex beware, request more information if need be. Wise men say only fools rush in.
Know the context
This is part and parcel of the first tip in a way but has a further application. Many ideas proposed by Zimbabweans outside the diaspora are based on bringing an idea that has succeeded “out there” to Zimbabwe. This is noble but as Hwindi founder Patrick Manyangadze shared with us “if you’re going to copy a business that is successful outside Zimbabwe, make sure you adapt it for the Zimbabwean context”. They had to adapt the model by having a call centre for cab bookings because while being online offers convenience Zimbabweans aren’t always able to get online.
Trust in capacity
If you’re going to go into the baking business don’t do it with a cement mixer. It’s that simple. So before you go into business with your cousin or friend, interrogate the capability of the person. How well do they know the industry? The product? The market? Are they rooted in the industry or are they latching onto opportunity? While you’re at it interrogate yourself as well. How well do you understand the business? If there’s one thing I can guarantee it’s that something will go wrong. Something always does. What separates successes and failures is how those in charge respond to them.
Trust in management
I’ve sat on interview panels before and my favourite questions to ask a job candidate are “what’s the last book you read, when was it and what’s the book about”. The answers to those questions provide a wealth of knowledge about who is sitting in front of me. Likewise, business partners need to be treated with the same shrewdness. Reading isn’t for everyone or everything for that matter but what a person consumes can tell you a lot about where they are going. So going into a floral business with someone who continually focuses on cryptocurrency may not be the best of ideas. And let me be clear here, the issue is that they are not focused on reading publications about the floral industry and related industries. So choose people that are continually investing in the chosen industry. And while you’re choosing them become one of them.
Always have safeguards
A business is only as good as the systems it employs. So it goes without saying that you need to be clear with those you are working with about the systems that will be used. You also need contingency plans in the event that the unthinkable happens. On top of all this, you need safeguards. It’s all well and good to have a plan but plans need to be tested. You need mechanisms to ensure that processes are being followed correctly. There are different ways to do this. Having a qualified third party go over the finances of the business regularly is a good start. You can employ a host of other methods depending on the nature of the business. Trust is important and again we should all know a story of someone who claimed a different selling price from what customers were actually paying. Consider the use of a secret shopper in customer-facing businesses, they can audit both financial and non-financial aspects of the customer experience. I will do an in-depth article on the secret shopper concept.
Businesses are at the end of the day about relationships. Customer to staff, staff to management and management to owners. All these tips should be used in cognizance of how they affect relationships. If all goes well you will be in business with your partners for a very long time so being upfront about the third party looking at books, the secret shoppers or your need for a deep understanding of the business is vital. In so doing you breed accountability into the business culture.