I recently received a very poignant message. Shaahid wrote that he is:
“recovering from a business financial loss [which gives] your self-esteem a beating. The journey out of the financial hole can be long and calls for very creative thinking to reclaim your cash flow.
“This was a journey of necessity, my business educational understanding. I learnt to listen more to advice, I learnt to research more before undertaking major matters that call for financial investing. It took me a while to realize that so called failure was needed to grow. If you don’t fail can’t grow past point B. Great success is built on the skeleton of failure.”
Shaahid is a particularly courageous man. Not only is he rebuilding his life from his financial disaster but he is also restoring his damaged self-esteem. And he’s sharing his journey with other entrepreneurs so that they can learn from his mistakes.
That takes me back to my own story: why I developed the Big Bucks business simulation game in the first place. Back then, I didn’t realise how privileged I was to be mentored by my father and to be able to take over his business when he died. But advantaged I was, and still I almost lost the business – more than once.
The vast majority of South Africans don’t have the advantages that I had. Most people don’t have family to turn to for advice or support. And they can’t afford to fail because it would be too devastating for them and those closest to them. And yet there are those courageous enough to try – and to risk failure.
There are numerous reasons for small business failure and no rule book or course on how to avoid that disaster. There are useful guides like Ries’ Lean Startup approach and tools like Osterwalder’s Business Model Canvas which help us to build a successful business, but no two businesses are the same and no two entrepreneur’s circumstances are the same.
And SMMEs still fail. But, I argue that we don’t necessarily have to fail to learn how to succeed: you don’t have to drown to figure out how to swim.
There is enough research available today to give us the main reasons for startup failure. Using that knowledge, we can do what is necessary to avoid a catastrophe. One frequently cited study is CBInsights which reveals that the number one culprit is No Market Need: the company’s product doesn’t address a real market need.
The second cause of collapse is lack of money. Cash (flow) is king. In Mzansi, the problem is a bit more nuanced than that. We aren’t generating enough money. Our primary source of finance needs to be our customers. And we need to know how to manage our money. And that is where the Big Bucks business simulation game comes in.
As a mentor, trainer and advisor to SMME owners, I find that only about 1 in 20 keep any sort of financial records – because they don’t know how to. Playing the Big Bucks game, entrepreneurs have fun while they discover how to take control of their business finances.
“This is a very important aspect”, acknowledges Shaahid. “This is one of the reasons my first business failed. I was in over my head.”
Please contact me if you want to know more about the Big Bucks game.
Mentor, trainer and business advisor at DoBetter.Business
Click here if you want to discuss gamifying financial literacy for entrepreneurs