Upload
nishi
View
21
Download
2
Tags:
Embed Size (px)
DESCRIPTION
BUILDING LASTING BUSINESS CLUBS The Pitfalls, Principles and Investment Options. Content. Introduction to Business Partnerships; Causes for High Failure of Clubs; How to Nurture a lasting Club; Intermediary Steps to Equity Partnerships. . INTRODUCTION. Importance of Partnerships: 2 Quotes - PowerPoint PPT Presentation
Citation preview
1
BUILDING LASTING BUSINESS CLUBS
The Pitfalls, Principles and Investment Options
2
Content
Introduction to Business Partnerships; Causes for High Failure of Clubs; How to Nurture a lasting Club; Intermediary Steps to Equity Partnerships.
3
INTRODUCTION
Importance of Partnerships: 2 Quotes One relating to a Journey; One on the acronym: TEAM.
4
CAUSES FOR HIGH CLUBS FAILURE RATE
Rushed Decisions Originator of idea is more informed than
the other and is in a hurry; Assuming timing is suitable to all parties; No regard for the Person’s on-going
investment programmes; Originator of idea hardly has other options; Remember Ugandans are ‘NICE’ people..
5
WHY HIGH FAILURES CONT…
Forgetting that Clubs are Timeless Equity positions are generally long-term; No explicit agreement on handling exit; No provisions for rewarding of additional
efforts/contributions of club members; No agreement how to involve relatives; Remember character sealed when….
6
WHY HIGH FAILURES CONT…
Mulwana’s Point of View …… Africans have communal instinct for poverty; If all are poor, tend to work well; Once success comes, greed sets in – seek to
eliminate your partner; Success amongst partners must remain equal
even outside business; Remember: In a club a partner is in the kitchen….
7
WHY HIGH FAILURES CONT…
Socially-based Choice of Partners Share(d) school, religion, social joints; Belong to the same tribe, clan, family,
social status; Grew up together, an acquaintance; A quote on business and friendships; Remember: Wealth does not know its…
8
WHY HIGH FAILURES CONT…
Biggest Driver is Capital Contribution Blinds one to other realities; Determination of leadership done
informally; Bitterness soon after the reality dawns; Remember: Investment clubs promise
economic gains to their members. These call for more than just capital.
9
HOW TO NURTURE LASTING CLUBS
Put Salient Aspects in Writing Date; Contribution, immediate and on-going; Shareholding; Witnesses; Exit Closes; Handling of modifications.
10
NURTURING LASTING CLUBS CONT…
Members Should Mirror Each Other on Key Aspects Financial Expectations e.g. cash flow
needs and financial discipline; The vision for the club; The common values; and If divergent/conflicting can you cope?
11
NURTURING LASTING CLUBS CONT…
Groom Members on 3 Attributes of Team Players: I…..; I…..; and M…. All others are a welcome bonus.
12
NURTURING LASTING CLUBS CONT…
Tap into the Strengths of Members Technical skills; Time; People skills; Contacts; and Capital.
13
NURTURING LASTING CLUBS CONT… Unshakable Commitment
Whatever agreed upon, embrace; Deliver beyond expectations; Works when all members have been
honest and never over-committed.
14
NURTURING LASTING CLUBS CONT… Work it out: partners are not angels
Members are products of their past; Look at each one’s positive side; Honour and respect each other; Manage conflicts, they are normal; Be prepared to lose part of your identity; Absorb positive criticism; It is a mutual mentorship; and Limit number of partnerships.
15
NURTURING LASTING CLUBS CONT… Maintain Open Communication
Talk about all concerns/aspirations; Listen; value each others’ opinion; Have time for club members alone; Discuss all members’ views openly; Pick non-verbal feedback; and Involve third party, but infrequently.
16
NURTURING LASTING CLUBS CONT… Celebrate and Mourn with Each Other
Stick with a member at his/her dark times;
Pass the ultimate test of true partnership; Talk well about each other to non-
partners; Know the limits of courtesy.
17
NURTURING LASTING CLUBS CONT… Watch effect of families, relatives and staff
Limit discussing negative aspects of a member with your families/relatives;
Beware relatives’ advice and judgement are difficult to ignore;
With staff, toe the official communication channels;
Be wary of informalities when bringing in relatives to the business.
18
NURTURING LASTING CLUBS CONT… Walk away from Irreconcilable relationship
Let go irredeemable partnership; Reward each other fairly; People are people, they can change; Remember 3Rs when in difficult choices; No name calling, please!!!; and Keep the lessons.
19
INVESTMENT OPPORTUNITIES
Qualities of a Good Business Idea;
7 Sources of Investment Opportunities;
Business Selection Determinants;
Investment Options; and
The Realities.
20
QUALITIES OF A GOOD BUSINESS IDEA A good business idea is based on:
A Product/Service customers want; A product/service one can sell at a
price the customers can afford and still give you a profit;
The knowledge and skills you have or can acquire; and
The resources and money you possess or can acquire.
21
SOURCES OF BUSINESS OPPORTUNITIES 7 Sources of business opportunities:1. One’s skills – education, work experience;2. One’s hobbies – sport, music, cooking etc3. Entrepreneurial insight;4. People’s needs – basic;5. People’s problems – floods, famine, disease 6. Under-utilized resources - land, equipment 7. Complaints against existing providers.
22
SELECTION DETERMINANTS
Selection depends on a combination of the following factors:
Background of Club Members i.e. health, education, work experience, families, hobbies, and environment they grew up from;
Proposed location of the business; Investment capital; Raw materials availability; Proximity to a market; and Government policy.
23
INVESTMENT OPTIONS
Deposit/term accounts with banks; Traded Shares; Non-listed shares/own business/JV; Bonds; Venture Capital Projects; Real estate; Precious metals and gems; Mixture of the above.
24
REALITIES
It will be difficult before it gets easier; As the Club income grows, expect new
unexpected challenges; Watch the founders’ syndrome; All members must remain willing learners
to outlast the ups and downs; People are wired to detect unfairness; Some members may outlive the Club and
strike out on their own. So be it.