5 BUSINESS LESSONS FROM MONICA MUSONDA
Zambian
businesswoman Monica Musonda is the founder of Java Foods, producer of the
eeZee instant noodles brand.
In a recent webcast, organized by The Tony Elumelu Foundation, she shared some of the lessons she has learnt in business. Below are the main takeaways.
In a recent webcast, organized by The Tony Elumelu Foundation, she shared some of the lessons she has learnt in business. Below are the main takeaways.
1. Give consumers what they want
It is important to have a
clear understanding of what consumers want and how much they are willing to pay
for a product. Introducing completely new concepts can be risky business.
“Ultimately we could have great innovations, but if no one is willing to pay
for it, it is not really a great idea,” said Musonda.
When she first launched
her instant noodles brand in Zambia, she wrongly assumed it would be an
immediate hit, especially given the affordable price. But because instant
noodles were not well known in the market, it proved to be a much tougher sell.
“We thought this would be a really great product [and] very easy to sell. But
unfortunately it was much harder because people didn’t know about the product.
So for us our biggest challenge was trying to get people to know what the
product was [and] how to prepare it…”
Although
consumption patterns in Zambia are changing, launching an unknown product
can be a slow and expensive exercise. She suggested that when starting out it
might be better to offer a product consumers already understand, and at a later
stage introduce something more innovative.
2. Start small – business is a marathon, not a
sprint
It is highly unlikely any
business will make money from the get-go. Entrepreneurs therefore need to
ensure they have enough cash reserves to keep going through the initial stages.
“You are going to need
some capital reserve from somewhere, because it will be a tough first or second
year as you stabilize the business, as you begin to understand payment issues,
as you begin to understand expenses,” Musonda explained.
She advises entrepreneurs
to start small and not spend too much money early on. “Ditch the fancy office
and the fleet of the most expensive Toyotas… Start small, understand your
revenue base and your expenses. Until things are able to stabilize, when you
have a little bit of cash flow left, then can you look into: should I hire that
extra person, should we lease a bigger warehouse, should we buy that piece of
more expensive equipment from the US as opposed to China?
“I think it is really
understanding the business as it grows, and honestly, the business will teach
you. It will teach you some bitter lessons, you will make mistakes and
it will also teach you to grow up.”
3. Learn by doing
Many African countries
suffer from a lack of reliable market data. And in cases where data is
available it is often expensive.
“I think you have got to
learn by doing. You may not have all the answers, you may not know the size of
the market, you may not know how much the competition is selling. But if
you get into the business, do your initial groundwork as much as you can – but
get in there and then start gathering your own data,” said Musonda.
“I would advise against
spending a lot of money before you start, on digging up lots and lots of
information. I do say do some homework – but don’t spend thousands and
thousands of dollars on market research because… you might not get the result
that you want and instead you would have wasted quite a lot of money and time
on something which might not help in the long run.”
4. First focus on the domestic market
Before targeting
international markets, Musonda said entrepreneurs should first focus on
establishing the business in their home country.
“Let people know your
product in your home market – it has to have a home, it has to be from
somewhere – before you start spreading yourself too thin [by] exporting.
“There are all these
nuances once you get your product outside of your country that you might not be
able to control. I think build a strong successful brand, a strong successful
distribution network, build supply chains which you understand in your country
– such that when you are able to export, you are able to withstand lots of
changes, etc.”
5. The right time to start a business? The earlier,
the better
Before
starting Java Foods in 2011, Musonda had a long corporate career. She worked
with one of Africa’s richest men, Aliko Dangote, as director of legal and
corporate affairs at Dangote Group.
But she believes aspiring
entrepreneurs should take the plunge sooner rather than later. “I would have
loved to have been younger and have less commitment. At this stage to fail is a
lot more painful than if I failed at 20 or 25 or 30, for instance. I think it
is a lot harder when you’re older, you have more commitments… I think there is
never a perfect scenario for you to start a business – but I think if you are
going to take the leap, the earlier the better.”
Also read: Letter to All New Entrepreneurs, Advice for African Entrepreneurs, Challenges of Entrepreneurship, Solutions of Entrepreneurship, Starting Business from Diaspora and Is Entrepreneurship Risky?
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