why do business?

This question in the Kenyan context will generate no brainer answers such as,

‘so I’m no longer employed’,

‘to make a little cash on the side’

‘well, my neighbour opened a clothes exhibition and he just bought a new car, he must be doing well, that’s where the money is!”

If you look at Wall Street (which for a long time was a ‘good example’ of business success), the answer was for a long time, ‘ maximisation of shareholder wealth as creatively as possible, regardless’. What went wrong? Why is it a historical case of a failed business model now, despite the brilliance of the Wall Street ‘creatives’?

Why do we go into business?

What does it take to build a sustainable business?

These are two questions I have been struggling to answer even as I go into business. See, typically Kenyan, I want to make money, lots of money, but how sustainable is profit making as a mission?

I believe, for a business to be sustainable, it has to have a clearly defined purpose that goes beyond profit. It has to have a valid business case, evolve continously and satisfy the needs of all it’s stakeholders (customers, employees, the community and shareholders in order of importance). It doesn’t matter how small a business is, if it loses focus on any of these facets, or if it doesn’t have these clearly set out, it’s bound to fail at some point.

This post will concentrate on satisfaction of all the stakeholders. What should a business purpose to accomplish to these people?

Customers – Business 101 says that a business exists for it’s customers. It should fulfil a genuine need that exists in the market, and keep doing this consistently. A business must select it’s message to it’s customers and stick to it. For example, I was chatting with a friend this week, and he was complaining that the Savannah (a chain of coffee shops in Nairobi) had lost it’s touch. When it opened shop, the waiters were super friendly, would usher you to your seat, but recently, he requested for a reservation and had to wait, till he gave up and got a table himself.

So, what’s your brand? What will keep your customers coming back? If it’s a restaurant, is it superb service, the ambience or excellent food? All these are important, but one must be exceptional, and consistently so. It doesn’t matter whether there’s an economic downturn, your customer experience must never change.

Employees – Many companies will do alot of lip service about how employees are first, but is this really true? Well in a good business, the people come second 🙂 As an employer, you cannot bluff through this one. No matter how much you talk about it, employees will always tell when you do not genuinely care about them. For example, buying a plush new office while the employees don’t have medical cover says volumes about what you think about them. Remember, there’s no strategy without employees. Your team could make or break your grand ideas so take care of them.

The Community – Corporate Social Responsibility isn’t just for publicity sake. It must be a core part of business strategy. See, customers and employees are part of the community too. A business must seek to sincerely make a difference in the community it exists in, otherwise it will be in trouble. Was there something wrong in lending to people who could hardly afford mortgages? (Wall Street)

Shareholders (and management) – I’m sorry to say, but these should be the least of concerns to a business (gasp!). See, if you do right by your customers employees, and the community, coupled with good business strategy, returns to shareholders flow automatically.

Unfortunately, we, as business owners want to reap our returns first, compromising the long term survival of the business.

Why are you in business? If not, why would you go into business?