In all honesty, do you run a one-man business?
If yes, how do you intend to mitigate key man risk?
You can have a hundred employees and still be a one-man business.
Can critical decisions be taken without you?
Can business move on without you?
Over the weekend we had a virtual meeting with two investors abroad on behalf of a business venture here in Nigeria.
They sought to know what happens to their investment should anything happen to the business owner.
When the business is a sole proprietorship and the investment sum is small, it is easier to take the risk, but not when the investment sum isn’t a small amount.
Typically, we say “God forbid. I cannot die. Nothing will happen to me”. It is okay to have faith, but the preservation of people’s investments shouldn’t be on the basis of your faith.
You need to have a clear plan on how to mitigate key man risk (a concern for most investors), especially if your business is incorporated.
What should you do?
1. Find an IDEAL co-founder or partner, IF YOU CAN and give some powers to the person.
The next one is more important in the context of this discourse.
2. SET UP A BOARD.
Set up a functional board of directors. I don’t mean an advisory board, but a board of directors that is listed with the corporate affairs commission.
A board of directors can take crucial decisions. The board can even hire a new CEO to continue with the business.
You don’t have to consider death to think about these things. Government can create a regulation tomorrow that says the CEO of a company shouldn’t serve for more than a period of time.
You may decide to establish another company that requires your attention while someone takes over as CEO to run the other company.
So when an investor throws that question at you someday, tell them you have a functional board of directors that will take decisions in the best interest of the company and stakeholders should anything happen to you.
This issue is one major reason why we are not building trans-generational companies in Nigeria. Our sense of control and power limits the potential of the company and our vision doesn’t develop deep roots for sustained growth.
If you have registered a limited liability company, what is keeping you from setting up a proper board of directors?
You know that the listed directors you have on your CAC documents were just to meet the criteria for registration.
When do you intend to do the right thing? Are you even considering it?
If you really want to go big and build a sustainable company, think about these things and ACT.
On a daily basis, brands are in a battle for consumers’ pockets. This blog post focuses on the detergent market in Nigeria.
The laundry soap product line in Nigeria has two major categories: hand-wash and machine-wash. Powder detergents and bar detergents form major portions of the hand-wash segment. In the machine-wash segment, powder detergents and liquid detergents are the main types. Of the two categories, powder detergent seems to be more popular and highly patronized by households in Nigeria.
In the late 80s and 90s, OMO detergent (a household name which stands for “Old Mother Owl”) from the stables of Unilever was the king of detergent in the Nigerian market. In those days, the exploits of OMO as the detergent of choice dwarfed the performances of its rivals as it pushed the likes of Elephant, Surf detergent and other small players, into a tight corner.
Its supremacy in the market was such that the television adverts with the promise “Super Blue OMO washes brighter and it shows” became an anthem among children who grew up in the early 90s. Eventually, the arrival of So Klin, sometime in 1996 was the beginning of the fall of the “king”. So Klin came into the market with an innovation; white detergent which was the industry’s first. In addition, its offer as a detergent with a deep-washing function gave Nigerians reasons to switch their loyalty to the new brand.
With So Klin, they did not need to spend extra money to buy bleach for their white laundry, unlike the blue OMO which they suddenly noticed turned their white clothes, blue. Also, the fact that So Klin came in small affordable sachets was a plus to its handful of benefits. Initially, So Klin was more interested in marketing than brand-building, this was the deficiency that was leveraged by Ariel, which was first launched in 1998, to upstage the competition in the detergent market.
Seeing the stiff competition which was about knocking the ‘king’ OMO out of the market, Unilever Nigeria Plc., the manufacturers of OMO were unrelenting in their quest to dominate and hold the ace once again in the detergent market. They added more value to their product offerings, such as attractive fragrances to attract and retain consumers’ interest.
They re-branded, re-packaged, re-designed and reduced the sizes of their product to be more pocket-friendly for their consumers. These were some of the other strategies used by the OMO manufacturers to ensure that they capture more of the market for themselves.
In 2010, Ariel improved on its product with a technology that introduced more enzymes and polymers that remove tough stains in ‘one wash that most detergents can’t remove in two washes,’ which other detergent brands have tried to beat and are still trying. It is also noteworthy that Sunlight, another detergent from Unilever, has also gained market share.
As a growing brand, it is important to know that it is a war out there (the survival of the fittest). A brand that doesn’t grow will be outdated.
Do you wish to stay relevant as a brand?
Send us an email via email@example.com
We have resolved all kinds of challenges for the various businesses and organizations that we have worked with, but one challenge that always defeated us was raising capital for our clients who needed it to execute our awesome strategies.
We have deferred that challenge for a long time but finally decided to take the bull by the horn.
About one month ago, we silently created a network of investors called THE LOOP, which currently has sixteen members. The group was set up as a strategic crowdfunding model called “closed-loop capital” where investors pull funds together to finance viable small businesses and startups. Mapemond takes on the responsibility of preliminary due diligence and brokerage.
Within the last three weeks after the quiet launch, the group has already raised the sum of fifteen million naira for a farm startup, a restaurant, and a limestone quarry. At Mapemond, we believe that the end goal of brand development is to improve bottomline and that is why capital is a major component of growth.
We shall be working to grow THE LOOP into a full-scale investment management arm of our mission to build reputable, profitable, and sustainable brands.
You can reach us through our email or phone number below if you have any inquiries.
On structuring your business, there are a number of things to consider, but we will present just an overview.
Structure is one of the fundamental differences between being self-employed and owning a business.
In self-employment, the business is totally dependent on you. The business needs your constant presence to function. Decisions cannot be taken without you. Procurement can’t happen without you. Business is just a hustle.
In being a business owner, you create a system around the business so that it can keep running even in your absence. You can even resign or move on to other things and the business will keep running so long as there is good management in place.
So how is a structure set up?
First, you have to outline all that needs to be happening in the business for it to run effectively and profitably.
That then leads to the need for people who will get the outlined things done in an effective manner. The higher the quality of people you employ the better.
These people won’t be moving in various directions or doing what they want, they have to be aligned to what you want for the business.
Therefore, there should be clear instructions for each person (job description), performance appraisal (key performance indicators), and penalties (policies et al).
There also has to be clear reporting lines for each officer with you at the helm of affairs CEO.
However, even you need to report to someone and be put in check. Hence the need for a board of directors (for limited liability company) or an advisory board (for business name or yet to be registered business).
You will have to someday leave the position of CEO for someone else to take over, but you can move on to be the Board Chairman if you like or just a founding director.
Note that for each position you create, you also have to vest the needed power into that position without micro-managing. The business account will need other signatories. There should be other decision-makers at different levels and so on. There should be a succession plan for each officer that exits the business.
There are many more things in between but we hope that this gives us a good perspective on what structuring a business is really about.
A couple of weeks ago, precisely on 23rd March 2021, a blockage occurred at the Suez Canal in Egypt when one of the biggest vessels in the world got stuck in the canal. This happened after the ship (Evergreen) was hit by a strong sand storm which made it run into the sidewall of the canal and became non-steerable. This became a major global challenge due to the high number of vessels that use the canal to cut down voyage time.
Seeing this, Burger King as a food brand decided to take advantage of the situation to market their burger. However, it appears the move was not welcome as many commentators found it distasteful and insensitive considering the hardship the situation was causing globally.
Most of the comments reflected the following concerns:“Your burger blocks arteries and veins”
“Burger King, the Artery clogger”
“For a blockade that caused loss of millions of dollars, this is a bad PR by Burger King”
“I get the humour but this makes me wonder what this does to my digestive system”
There were also some comments that reflected a common thought:
When trying to leverage an event to promote your brand, pay attention to the nuances and emotions of people, so you can swing a really brilliant copy and advert.
We guess Burger King didn’t mean to disrespect the sensibilities of people but it is a lesson to look beyond ourselves when promoting our brands.
We are not sure if this affects the customer loyalty for the brand, and like it is widely believed that every publicity is good publicity but it is always better when the publicity wins the affection of more consumers. It improves your brand perception, loyalty, and equity.
Do you look forward to seeing your business exit the small business stage?
What needs to happen for your business to stop being a small business?
Can you handle your business becoming a company?
Look at your business, do you really have other executive officers?