In June 2011 I was invited to speak at the Kukula Cup Final about my experience as an entrepreneur in Zambia. Planning for the talk made me reflect on the journey that I have been on since starting my first business, Impala Service Station in 1972, and the many lessons that I have learnt along the way. The talk was so well received that I have decided to put together a list of 14 tips that I have implemented on my journey to success and highlight on each of them for the purpose of this article.
14 Tips on How to Become a Successful Entrepreneur
- Choose a business that you will enjoy working in as it will be the place where you spend most of your time.
- Know that what you're doing is morally right.
- Once you've raised your capital, open up a bank account. Banks will only lend you money if they can see your records and can follow your cashflow.
- The location of your business premises must be in the right place for the type of business you are running.
- Once you've established your business you've got to advertise and do marketing.
- Be innovative to ensure that you're always one step ahead of your competition.
- Maintain consistency in what you are doing to encourage consumer loyalty.
- Plough your profits back into the company to enable expansion and replacement costs.
- Maintain a healthy cashflow where your income is more than your expenditure.
- Pay suppliers promptly.
- Give good customer service.
- After identifying reliable customers, offer credit facilities to enable expansion of your business.
- The people you employ are an important factor in your success so make sure they are experienced, dedicated and offer training facilities.
- Set a goal of what you want - aim high and aim for the best.
Backtracking a little
Before I started Impala Service Station I didn't have much experience working for other people, however the little work that I did do has helped me so much in running my own business. In hindsight I would always advise to gain as much experience as you can working for other people because it will teach you so much about business and will enable you to learn about the mistakes first without them affecting your own bottom line.
After finishing school I started working for Lusaka City Council in the buying and stores offices where I learnt about custom clearing and stock control. The Lusaka City Council sponsored me to go to the UK to do a course in business management which specialised in purchasing, marketing, economics and finance and what I learnt there helped me tremendously when I eventually started my own business.
How I Implemented the 14 Tips
1. Choose a business that you will enjoy working in as it will be the place where you spend most of your time.
I was interested in cars so I knew that I'd be happy running a business dealing with spare parts and accessories. When I later opened Autoworld and expanded this business I ventured into selling boats and engines because boating is my hobby so going to work has been like doing my favourite sport.
2. Know that what you're doing is morally right.
I'll give you an example of determination. When I was studying in England I had a part-time job selling encyclopedias door to door. Each sales person was given targets. If we sold 3 sets of encyclopedias each evening we would be given a £50 bonus on top of our pay. I was usually the only one to get that bonus because I applied the sales language and method of selling that I was taught which was designed in such a way to make the person agree to the sale and it worked every time. We were even taught to hide certain information such as the bit at the bottom of the form which enabled the customer to cancel the order up to 48 hours later because the transaction was made in their own home. If we made customers aware of that option it would give them choice which would ultimately lead to doubt and this would not be good for a guaranteed sale. So we were taught to fold this bottom section of the form so that the customer never saw it when they filled out the sales form. The moment I realised that I was selling these encyclopedias to people that didn't need them and couldn't actually afford them I couldn't sell anymore. So you've got to be happy with what you're doing and know that you're doing the right thing selling what you do. When I opened Impala selling petrol and spare parts I knew that this was something people needed and that felt right.
3. Once you've raised your capital, open up a bank account. Banks will only lend you money if they can see your records and can follow your cashflow.
The funny thing with banks is that before they lend you money you have to prove to them that you don't need their money. In my case I didn't have the money when I started my business so my mother loaned me K1,000 back in 1972 and with that money I opened a bank account. Within 3 days of opening the account I had an overdraft!
4. The location of your business premises must be in the right place for the type of business you are running.
Before opening Impala Service Station I applied to Caltex for a petrol station and they offered me the one on the Kabwe Road heading out of Lusaka. It was the perfect location to capture motorists entering and leaving the city as well as coming into town to do their business around the Cairo Road area.
5. Once you've established your business you've got to advertise and do marketing.
One of the first marketing campaigns that I initiated was leafleting cars which was a suggestion from Caltex at the time. I paid people to go out and put a leaflet with a picture of a car with 4 tyres on it. After inspecting the car they would mark on the leaflet which tyre needed replacing. The blurb on the leaflet was something along the lines of "We've taken the liberty of inspecting your tyres and we've indicated which tyre needs replacing. We currently have tyres in stock at Impala Service Station and we'd be happy to fit them for you". It worked! After this we tried a few raffles where customers who bought a certain amount of fuel or products in the shop would be entered for a free raffle with the first prize being a brand new car. Again this worked too. Another thing that I have found is people often think that in order for a business to be successful you have to sell a high yielding profit item, however what I've found is that this is not always the case. I found offering a 'carrot' like cigarettes, cool drinks or a vending machine in the spares shop encouraged customers to stop and buy their fuel at Impala. While they were there, they ended up seeing other products which they then went on to purchase as well. So you've got to make the whole customer experience something that makes them want to come back again and again.
6. Apply innovation to ensure that you're always one step ahead of your competition.
Before I opened Impala I was helping to run a family business selling beer in Emmasdale. I compared the profit of a litre of beer sold to a litre of fuel that I would be able to sell at the filling station. The profit was higher for a litre of beer sold, however fuel took the lead with greater volume at less profit. I also discovered that the profit in running a petrol station doesn't come from the amount of fuel sold, but rather the amount of engine oil sold. When I started Impala you couldn't buy engine oil in smaller containers as it only came in big drums. So I went to the compounds and bought used small containers of cooking oil, cleaned them out and decanted the oil from the drums into the containers. This way I was able to offer oil to my customers to buy and also offer the service of an oil top up to customers filling up with fuel. Within a short space of time I had so many women bringing me hundreds of containers on a daily basis from the compounds.
7. Maintain consistency in what you are doing to encourage consumer loyalty.
When I opened Impala I maintained consistency by setting opening hours and ensuring my customers knew these hours. I maintained sufficient stock levels because I knew that a disappointed customers will always go to my competition and I would then run the risk of loosing that customer especially if my competitor was offering a better service. I ensured that I always had oil and air. I also offered a 24 hour tyre mending service which we offered for at least 40 years before having to close it recently due to feasibility.
8. Ploug your profits back into the company to enable expansion and replacement costs.
I started Impala with 8 employees and I now have 300 employees between 13 branches nationwide. I did this by never using my profit and constantly putting it back into the business - expanding my product and service range as well as opening new branches.
9. Maintain a healthy cashflow where your income is more than your expenditure.
Your cashflow is what determines whether or not you will go bankrupt. You've got to be thrifty in how you run your business and buy what you need, not what you want. This means only buying what you can afford.
10. Pay suppliers promptly.
I've always adhered to payment terms and this has enabled me to continue a good relationship of trust with all of my suppliers. What you want is a good reputation and respect because when you give someone respect they will also respect you.
11. Give good customer service.
Without your customer you have no business so it is vitally important to put time and effort into ensuring that they are treated well. Caltex offered staff training which involved things such as greeting a customer nicely and thanking them at the end while asking them to call again. When a car came to fill up with petrol my staff would be trained to ask the customer if they wanted their windscreen cleaned and tyre pressure checked. I bought my own compressor to offer tyre pressure. I wanted my customers to leave with a positive experience from the visit to Impala so that they would want to come back again.
12. After identifying reliable customers, offer credit facilities to enable expansion of your business.
I looked out for regular buyers and got to know what sort of a business they were running and if it was a reputable organisaiton I offered these customers credit facilities. It meant that I got to sell more sooner and this all contributed to me being able to expand Impala into Autoworld.
13. The people you employ are an important factor in your success so make sure they are experienced, dedicated and offer training facilities.
I have always looked for employees that are keen to share in my vision for my business. Training is essential to ensure that everyone is operating on the same page and equipped with the right skills for the role.
14. Set a goal of what you want - aim high and aim for the best.
When I first started Impala I could see the potential for the business if I managed to implement a successful business model. I was able to do this at Impala and this led me to opening my first Autoworld branch. I remember, on the day of the official opening of the branch, walking my mother around who had come to cut the ribbon and telling her my plans for expanding the premises and my goal of having a branch in every provincial centre.
I hope that you find these tips useful and I wish you the greatest success in your business endeavors. Do you have any tips that have contributed to the success of your role as an entrepreneur? Feel free to share these points in the comments section below.