Playing at Business

Memba Ben By Memba Ben, 16th Jan 2018 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Writing>Personal Experiences

The lessons I learnt from starting and eventually closing a business.

"Success is not final; failure is not fatal: It is the courage to continue that counts." - Winston S. Churchill

People more qualified than dumb old me will tell you that starting and running a business is not for the faint of heart and while some people may think it is made out to be more difficult than what it actually is, having an idea on how the business will run is one thing.

Putting it into action is another story all together.

You have to perform due diligence and cover all bases before even thinking of getting into it so as to protect you in the event that things don’t work out.

My friends and I always had big plans to start a business and with the perfect season coming up, we decided to start an ice business. We spent months researching, planning and preparing ourselves to taking the big step and when the time finally arrived; we pooled our resources together and bought two ice machines, three deep freezer fridges whilst renting out a warehouse and a delivery van.

With the optimism contagiously hovering in the air and our enthusiasm overflowing, we began working towards our dream of becoming successful businessmen but right off the bat, we ran into a slight hiccup.

Despite all our research into the area, we only later came to find out that one of the biggest ice distributors in the province was in our very own neighborhood. I’m not talking about them being in the same province. I’m talking about them having their base of operations a couple of streets away from the warehouse.


It was definitely a mistake on our part but despite that, the boys and I weren’t deterred. It might have been an annoyance but we felt that we could carve ourselves a small piece of the market. Besides, we had an idea of the sort of challenges that were lying ahead so we felt that we were prepared to face what was coming our way.

Little did we know just how much a challenge it was going to be.

Looking back, we didn’t have nearly enough capital to begin with. Most businesses take time to grow and rarely see profit immediately so if (like us) you aren’t able to keep the lights on, chances are high that you’d end up in the red.

In addition, even if you have the necessary capital to keep the business open for at least a year, business owners need to be careful about financial mismanagement. Get everything worked out before starting the business. In the early days of our business, when we’d completed a successful sale; the gents and I would go out and celebrate but considering how we ended up, we were essentially spending money we didn’t have. Another tricky thing about finances in a business is determining how much everyone gets paid. Usually, it would be a straightforward matter of having some paperwork and dividing the monies according to the investment percentage a person put in but we weren’t so forward thinking. We were a bunch of twenty-two year friends who were only thinking of making money. We didn’t care about paperwork and accounting. It became a sticky talking point because you don’t want to shortchange your friends and at the same time screw yourself.

Like many people starting out a business, we came in with our expectations set too high and when they weren’t met, we became desperate and made more drastic decisions. Small businesses are a nightmare to keep afloat and we didn’t realize the amount of work we had to put in. Because we had no employees, we had to do everything and that coupled with the fact that we had no real experience of how business actually works had us at a disadvantage before we even began.

Another thing that we did that was ultimately useless (and a lot of startups tend to do) was spend money on inconsequential things. If it’s not a necessity for the business, it can wait. In our instance, to save money we could have bought two second hand ice machines for the price of a brand new machine. In another instance, in an effort to broaden our range of products (sounds ridiculous, I know), we bought an ice crusher (the type used in cocktails and such) not knowing if there was an actual need from customers for such. To no one’s surprise, not a single order was placed for crushed ice and in an effort to curb rising expenses; we ended up selling it for a third of its value.

Having all that equipment was no good without having any clientele and matters weren’t helped that our competitors had the advantage in reputation so in order to combat this, we decided to market ourselves on the idea of what we can do that they couldn’t. For example, usually, distributors would only deliver up to a certain area and not go further. We offered free delivery within the province. If your distributor offered you ten rand for a pack of ice, we’d offer you six rand. We called every pub owner, had meetings with club owners and even went as far as to approach supermarkets.

No one budged.

We didn’t take into account what type of deal our competitors had with stores we were trying to distribute to. Our competitors priced themselves at the perfect point where they could be seen as reasonable and at the same time; make a profit whereas we under priced ourselves which hurt our margins.

My friends and I knew we wouldn’t be making money right away but after a couple of months, I began panicking at the silence we received. After all the noise we made, is no one gonna meet up with us? Sure, we got order here and there but they weren’t significant enough to sustain the business.

The struggle continued for a while and it eventually got to a point where (in desperation), we began taking larger orders with the hope of making up lost profits. In our minds, we felt we needed to accept larger jobs as it would bring in more money but as the production increased, so did the cost and as a result, nothing was really gained.

Eight months in and the business was hemorrhaging money. We tried alternative to stop the rot such as giving huge discounts but because the productivity rate was still the same as when we weren’t giving discounts and things became worse. All the optimism, enthusiasm and hopes were being chipped away by the constant disappointment and in its place came bitterness.

Then came the death blow.

The guy with whom we’d made a deal to use his warehouse came through one afternoon, produced the utilities bill and explained that because of our high use of resources, he was gonna have to increase the rent. We were already clutching at straws by this point but when this came about; we knew the dream was over.

While we were bitter at how things turned out, in time we came to see it as a lesson which had to be learned and the experience was damn near invaluable. Some folks learn better following theory while others (such as my friends and I) learn better by doing and for us; learning on the job was a great way to see just how a business needed to work as we witnessed the effects of our choices firsthand.

In closing, I’d like to think that the folks who read this and were thinking of starting their own business can see where my friends and I went wrong and correct their own course. Alternatively, to those who are afraid to start one up because of the failure rate, business is like all things in life. Sometimes it works, sometimes it doesn’t. While disappointment can be a bitter pill to swallow, so as long as you learnt from your setback; then I’d say the experience was worth it.

After all, there's always the chance that you might want a second crack at it.


Business Planning Process, Business Startup, Personal Experiences

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author avatar Memba Ben
A fan's view on the business of football.

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