A LETTER TO THE "GREEN HORN" ENTREPRENEUR!!

 A LETTER TO THE "GREEN HORN" ENTREPRENEUR!!

  Cynthia, prior to and in the early days of our birth as an independent and later as a republic state, the stakes of hope of genuine growth of our economy was  high among citizens but due to needless interferences in the administration of democracy in the country by ambitious military personalities, the nation Ghana rolled back several decades of development. So today it is no surprise to some why unemployment seems to swallow the economy up. We produce more graduates but no jobs or industries to absorb them. Some have even tag the economy of Ghana as a “voodoo economy” where populace survive like magicians. Hence, I am very glad you poached me, to give you some advice concerning your desire to establish a preparatory school at Aplaku.

For many years Ghanaians have accorded the white coloured job, salary earner or public servant with much more respect than the self-employed. This has contributed to the clamor for paid job as against self-earn jobs. The situation is however changing as the realization that there is nothing better than self-employment is gaining grounds. This has been facilitated by a number of highly qualified professional joining the private sector like you Cynthia.

To begin with, an entrepreneur is one who assumes the responsibility and the risk for a business operation with the expectation of making a profit. The entrepreneur generally decides on the product, acquires the facilities, and brings together the labor force, capital, and production materials. If the business succeeds, the entrepreneur reaps the reward of profits; if it fails, he or she takes the loss.

In his writings, the Austrian-American economist Joseph A. Schumpeter stressed the role of the entrepreneur as an innovator, the person who develops a new product, a new market, or a new means of production. One important example was Henry Ford. In the industrialized economies of the late 20th century, giant corporations and conglomerates have largely replaced the individual owner-operator. There is a place for the entrepreneurship though, and Ghana is no exception.

Cynthia, entrepreneurship is more than identifying profitable opportunities. Even in profitable opportunities, the entrepreneur needs to fuse information from different sources. Thus the Schumpeterian innovator may need to synthesize technical information on an invention with information on the customer needs and the availability and suitability of raw material before he can proceed. A good education combined with practical experience is therefore required in many instances to help you interpret and deal with complex situations. For your case, certain factors need to be carefully analyze which include; socio-cultural factors of the Aplaku village example, do they appreciate entrepreneurship endeavors? What is education to the community? What is the population of the village and how many school going age children are there? What or who will be your competitors in the education sector? What is government policy on education at the basic level among other’s needs, to be carefully studied and analyze.

Therefore, high level entrepreneurship must be distinguished from low level entrepreneurship, as the low level entrepreneur may not require the breadth of experience and education to deal with the kind of issues associated with the high level entrepreneur. Good social network within the community are important requirement.

Cynthia, there is a well recognize saying in the world of science and theology which says that everything that manifests itself physically emanate from the mind. Hence every creation of man basically comes from an idea which is generated in the mind. My point is your idea of opening a preparatory school is laudable and hence need to be developed and shaped in to a profitable idea.

To begin, an idea is not necessarily a business opportunity. It becomes a business opportunity when it attractive to customers or targets, it will work in the business environment and can actually be executed to the market early before competitors beat you. Therefore, sources of ideas need to be generated in a systematic manner rather than haphazard. Such ideas may be entirely new and unconnected to past experiences or may just be an on –going development from an existing sector. To obtain a flow of new business ideas you need to tap into various sources both internal and external sources. Some of the sources of internal idea generation in your case Cynthia will include; brainstorming sessions, focus group discussions, research development centers visits, doing problem inventory analysis on possible competitor’s business model among others. You should however, be alert to write ideas down, review and classify them as promising, marginal and rejects, this process is also termed idea screening.

The next thing I will talk about is the need to identify and evaluate opportunities. Cynthia, ideas are no doubt good to have but they need to meet the window of opportunity which I hinted earlier. Opportunity identification and evaluation is a very difficult task. Most good business opportunities do not suddenly appear, but rather result from an entrepreneur’s alertness to possibilities, or in some case, the establishment of mechanisms that identify potential opportunities, this I believe you have seen, hence your desire to open a preparatory school. However, opportunity needs to be evaluated in terms of its risks and rewards especially when preparatory school would basically be rendering a service. It also needs to meet personal skills and goals.

Therefore, there is a need to answer the following questions; what market need does it fill? What personal observations have you experienced or recorded with regard to that market need? What social condition underlies this market need? What market research data can be marshaled to describe this market need? What patents might be available to fulfill this need?  What competition exists in this market? How would you describe the behavior of this competition?

The next thing I will like to highlight for you is the development of a business plan. Do you know what the business plan is? The business plan refers, to a written document describing all relevant internal and external elements and strategies for starting a new venture. It integrate the functional plans i.e. marketing and HR in your case the function of the administrator or headteacher and some of the function of the various department to be establish that may include staff common room, treasury, public relation officer among others. The business plan evokes integration and coordination of effective business objectives and strategies. Any business plan must answer some of the following; where am i? Where am I going? And how will I get there? So in simple terms it’s a laid plan for the business unforeseen years. The structure of  a well written business plan should include; the title page, table of contents, executive summary, business and industry description, financial, marketing, technology and operational plan, summary and appendix.

Moving on, there is the need for you to analyze your resources. The resources needed for addressing the opportunity must also be determined Cynthia. This process starts with an appraisal of you the “entrepreneur’s” present resources. Any resources that are critical need to be differentiated from those that are just helpful. Care must be taken not to underestimate the amount of variety of resources needed. The downside risks associated with insufficient or inappropriate resources should also be assessed. An entrepreneur should strive to maintain as large an ownership position as possible, particularly in the start-up stage. As the business develops, more funds will probably be needed to finance the growth of the venture, requiring more ownership to be relinquished. When funds become an issue you may present your business plan to an investor for assistance. These investors may include the banks, friends among others.

To continue, the next thing I will stress at this stage is the management of the enterprise. After resources are acquired, the entrepreneur must use them to implement the business plan. The operational problems of the growing enterprise must also be examined. 

This involves implementing a management style and structure, as well as determining the key variables for success. A control system must be established, so that any problem areas can be quickly identified and resolved. Some entrepreneurs have difficulty managing and growing the venture they created which should not be so. Hence I will add that you develop a management structure. It need not be laborious but just have the needed knowledge in the sector and research adequately into the market.

Cynthia, I will like to stress that this phases of advice proceed progressively but none is dealt with in isolation or completely dealt with before the other phases. These should be a boost for you as you develop your idea in to a viable entity. I will encourage and urge you to take up the challenge of opening the preparatory school.