No free lunch in business

This week we shall continue our discussion on how some employers may contribute to high levels of unemployment in Botswana. One reason why some small businesses may not last long is the types and variety of products that they sell.

For example, most vegetable farmers in Botswana grow much the same veggies – onion, beetroot, carrot, tomato, rape, spinach ( Swiss chard)… As a result, the market becomes flooded with large quantities of these veggies leading to an inevitable fall in prices. This, in turn, might result in reduced incomes, and possibly losses, since now income received may be less than the costs of production. The farmer may then decide to quit farming; not only will he now be unemployed, but also his workers will be jobless. At present, there are many vegetable farmers in the Tonota – Ditladi area many of whom farm along the Shashe river. And some of them are now complaining that the local market for their veggies is now saturated. No wonder then that some farmers here are now struggling to make ends meet and have decided to quit. Such farmers should do some research to find a gap in the market which they can fill by growing something different and for which there is a strong demand. For example, many hotels may wish to buy herbs, garlic and lettuce which very few farmers here grow. This means that the supply of these crops is not enough to satisfy the demand for these crops and so farmers can obtain top prices for them.

Since Independence, we have seen the number of China shops mushrooming in Botswana. Such shops are run by Chinese businessmen and their families and so provide jobs for thousands of Chinese. But why can’t such shops be owned and run by Batswana? Is it really so difficult to manage a shop – do you need a degree or a knowledge of rocket science to do this? No, it’s to do with the work ethic. Every time I go into such shops, the Chinaman is always there! And he is there from morning to night seven days a week! And even on Sundays and public holidays. Now how many Batswana are willing to work such long hours in their businesses? There is no such thing as a free lunch in business; you cannot run a successful business by relaxing and doing nothing! Running a business requires hard work and a stubborn determination to succeed! Sorry, there are no short cuts to success! Patience, perseverance and persistence are the name of the game.

I grew up in Malaysia where my father was a rubber planter. And every few months he would go into town to one of the Chinese shops. Although the front of the shop would appear very quiet, it was all action over a few Tiger beers in a back room. Here my father would negotiate with Chinaman over the price of his rubber. Once the deal was concluded, the rubber would then be transported to Singapore for shipment overseas. My parents once told me that the only time that you would find an idle Chinaman is when he is in his coffin! And I think that they were right! And recently I have seen posters in some government offices saying ‘ A poor work ethic is a breeding ground for corruption.’ If we are dedicated to our work as employers, we will not have the time to think of ways in which to be corrupt, cheat, swindle, or shortchange our employees or customers in order to raise income.

Businesses, especially Small Medium Enterprises ( SMEs) may face problems, or fold up, for a number of other reasons. Running a business is more demanding and complex than running your household! And to do this successfully, a small business owner needs a variety of skills. For example, a farmer manages, or cares for, crops and livestock until they are ready to be sold. That means that he has to manage the production side of the farm – the actual growing of crops and the raising of livestock – to know what types of fertiliser he should add to the soil and when, the types of supplementary feeds and medication to be given to livestock… And also, he has to manage his workforce effectively and fairly. But that’s not all – he also needs to handle the farm’s finances – arranging loans, buying inputs like seeds and fertilisers at the lowest possible cost, and selling produce at the highest price possible. And businesses also have to keep good records. Many times I have bought items from small companies ( and even large well- known three- star hotels!) but have not been given a receipt. And also records showing expenses and income are a must. Now I wonder how can businesses who fail to keep such records know how much money they are making and if they are making a profit or loss? Surely, it is not too difficult to at least keep a receipt book to record all the income coming into the business. After all, a receipt book will only set one back a few Pula! Not carrying out such duties may be a recipe for disaster! A business owner may, therefore, only find out that he is losing money and on the way to bankruptcy when it is too late at which time he may be forced to close down his business thus throwing his workers out of work. Business owners need to be more financially literate!