Kukura Kurerwa Bus Service Pvt Ltd, one of the top bus companies in Zimbabwe, is auctioning all its assets on the 23rd of November. This comes after it was put under liquidation a few months ago by the order of the High court. The company had debt of over $2 million dollars which it was failing to pay.
From the failures of Rufaro Marketing to the demise of Gramma Records, Kukura Kurerwa Bus Company finds its a way to the list of fallen Zimbabwean giant companies. Below are some of the lessons to learn from the fall of the public transport giant.
Pay your employees
The blood of any business or company is its employees. They are the ones who carry out the day to day duties necessary for the company`s success. These employees should be treated well. However Kukura Kurerwa Bus Company failed to adhere to this simple concept. The company owed its workers close to $1 million in salaries and this partly prompted the employees to take the matter to the courts. One might wonder how then did the owner expect his employees to survive if they did not resort to acts of sabotage in order to earn a living. You can imagine how these acts of sabotage impacted the company`s performance. It thus becomes important for one to ensure that employees are given what is due to them if a company is to be successful.
Cashflow is King
You need to always have cash for your business to run successfully. In the public transport industry, cash should not be a problem as customers pay upfront. There are no credit terms. This suggests mismanagement of funds as Kukura Kurerwa failed to manage its cashflow. They failed to pay salaries to their workers and to make their loan repayments. The creditors had no option but to approach the courts for the company to be liquidated. Cash is King, promises of future income don’t help. Your business should have enough cashflow to cover it’s day to day needs. More businesses fail for lack of cash flow than for lack of profit.
Innovate or Die
Kukura Kurerwa did not properly analyse its business model to ensure that it remained profitable in a very competitive environment. Since the days of AVM buses, the company dominated many routes. However, times changed and new bus companies were now plying the same routes, and Kukura Kurerwa failed to add value to their services. Among other things, they could have thought of venturing into advertising making use of TV screens fitted in their coaches. They could also have diversified into trucking and logistics. Who knows the amount of revenue they could have accrued from that.
Succession strategy is important
Company owners need to have a clearly thought out succession plan which would ensure that the company`s vision continues. The founder of Kukura Kurerwa Bus services passed on the button to his son, Ignatius Nyariri. However, the successor Ignatius Nyariri was appointed at a time when the company was already caught up in debt. This suggests that he was appointed rather late and possibly could not flex his innovative muscle to create more revenue streams. In this regard, a founder should be willing to groom a successor and expose him/her to the important aspects of the business so that they can continue the process of growing the business. This should not be done only when the business is already in trouble.
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