The formal job market is not the same as it was two or more decades ago. There are less formal jobs to go around to an ever growing population. A job advert in the local press is bound to get hundreds of applications at a minimum. Yet for most people, formal employment is where they feel security lies.
Parents seem to be most anxious about their children getting employed. For them they have spent their savings putting them through school and expect that effort to pay off with a promise of a job. It is not unheard of that parents are unhappy with relatives and friends because they don’t seem to help their children find work.
But times have changed. Large scale redundancies have been a more frequent occurrence than recruitment drives. Most organisations are not growing and as such can’t absorb the growing job seeking population. Some companies find it easier to outsource non-core services – less human resources headaches to handle.
We have come to a point where self-employment is the new reality. Where family and friends help our young graduates and school leavers get started on their own first before expecting an offer of employment. A job becomes the last resort! The remuneration may initially be little but a little income is better than nothing. As much as everybody is not cut out for entrepreneurship, it is a path that we all need to give serious consideration.
The question that would then arise would be how to finance these startup entrepreneurs. A good majority of indigenous Malawians start their businesses with little or no financing. A lucky few will get financial or capital equipment support from family or friends. Some, who have had the privilege of having a full time job, will invest in a side business and then leave employment when the terrain feels safe.
Bootstrapping is the most common method of finance for startups and traders but this approach can be fraught with problems. Scaling a business can be hard and that can leave many entrepreneurs playing at the bottom end of the spectrum. Many remain small, using old technologies and struggling with inadequate cash flows. While money is not the solution to most entrepreneur’s problems, lack of it can be a major factor. Business skills training and mentorship are widely ignored but very important for every business.
There are a number of initiatives that help train and mentor entrepreneurs to build their ideas into products. Some even provide seed capital. Malawians have benefited from these initiatives and schemes in the past.
The Tony Elumelu Foundation (TEF) Entrepreneurship Programme trains and mentors 1,000 Africans every year and provides seed capital of $5,000 for the entrepreneurs to prove their concept. The foundation was founded by Nigerian entrepreneurs and economist Tony O. Elumelu. Applications for the 2019 programme opened on 1st January 2019 through www.TEFConnect.com.
The African Entrepreneurship Award is run by BMCE Bank of Morocco and awards African entrepreneurs who share prize money of $1 Million. The entrepreneurs go through a number of mentoring rounds and finally to a presidential jury pitch in Morocco. Applications for the award open in early 2019.
A local SME Fund, Business Partners, provides financial solutions, support and mentoring to formal small and medium enterprises (SMEs). They loan out amounts from about MK36m for various business ideas from tech to manufacturing.
Accesserator https://accesserator.com is a fund set up by two Dutch professionals who see opportunities for doing business in Malawi. They use their knowledge and skills to invest in local agribusinesses like pig farming and poultry keeping.
Other funding opportunities can be sought from the African Leadership Academy’s Anzisha Prize www.anzishaprize.org/ and the Growth Accelerator www.growmalawi.com, a new initiative targeting early-stage Malawian entrepreneurs who have a registered business in Malawi with a prototype ready to scale up.
For entrepreneurs and startups looking for investment, websites like Venture Capital 4 Africa www.vc4a.com provide a platform for African startups to connect to opportunities. Entrepreneurs can promote their venture, access free online tools and raise capital.
For young Malawian entrepreneurs taking the entrepreneurship route, there are a number of skills they need to learn and brush up on. Selling yourself is perhaps the most critical. In a very crowded market, if one can’t properly put their value proposition across to a buyer, they will most likely forever be overlooked for others with a more promising pitches.
While not a skill, open your mind to partnerships. Bring different skills and resources to the table and work from there. But don’t forget to have a partnership agreement in place. Even if you have partnered with your parent, cousin or best friend, that agreement could save you from many (unnecessary) arguments and disagreements especially involving money.
Tech skills are extremely crucial. Possible financiers require a lot of information before they are going to pump any sort of money into your venture. Not only are you going to have to be adept with word processing, spreadsheets and online communication tools, you will need to conduct a fair amount of online research. Researching about your market, your competitors, possible partners but also looking for other funding opportunities too. You will also need a few data bundles to aid your research. Remember, you have to spend money to make money!
Numbers are not for everyone. But knowing them is what will give you a good chance of securing funding. If you frown at the mention of cash flows, cost of sales and balance sheet, well… frown no more. You will need to get comfortable with these terms and know your figures as well as the back of your hand.
Perhaps the most important skill you will need is patience. Building a business takes time. Seeking finance and investment takes time. There will be many wins and losses, good times and hard ones. There will be a lot of learning. And if you have the patience and vision, it will all pay off very handsomely. Never give up!
This article was published in the 2018 Christmas edition of Mpingo Ndife Tonse magazine of the Lilongwe Archdiocese.
*Picture courtesy of mHub and Sahara Sparks