This month’s Startup Hour was great. It was my second time attending the monthly event and so far, I’ve been left looking forward to the next Startup Hour. It is a very informal setting held at Smuggler’s Inn which is organised by Startup Junction, where people get to mingle while having a choice of their favourite drinks, if they so please. It’s awesome because you are free to just be yourself. Now, some of you might be thinking this is a time waster among other things. However, wouldn’t you substitute a crazy drunken Friday night for a relaxed Wednesday evening with some amazing go-getters? Share ideas and create new ones? Well, it just depends on your vision. Where do you hope to be in the next 3 years, 5 years, and 10 years?
While reflecting on your destiny, allow me to dissect this month’s feature guest at Startup Hour, Sipho Phiri. A brief profile of the all-Zambian entrepreneur is that he left the finance world in 2006 to pursue his own business interest by founding Leopards Hill Memorial Park, and Mukamunya Estate. He is currently working on a Hydroelectricity Generation project with Western Power Company Limited where he is the Chairman. According to Sipho, who is passionate about deal structures and corporate governance, many startups in Zambia fail because they do not get their governance in order.
Naturally I couldn’t resist asking Sipho, what does corporate governance mean to him? One word he said, accountability. Governance has 3 components which have the ability to launch a startup into a successful business, namely, a Board, Shareholder Agreements, and Accounting. First, the purpose of a board is to have checks and balances. Secondly, the shareholder agreements ensure that enumeration issues are sorted out at the beginning of the deal and not only later when the money starts coming in. This is essential in outlining who gets what, when, and how much. Lastly, the accounting is necessary to keep a record of all financial transactions and for auditing purposes.
Most times people are afraid to keep a paper trail of their business dealings because it makes things too formal or appear serious. The reality is that business is formal and it is serious, that is, if you wish to succeed. Don’t get me wrong, remember to have fun and of course enjoy the process. If not, then you might be into the wrong thing. Nonetheless, even if you’re selling chickens (broilers or layers), or pigs, keep stock of how many you sell, how much the feed costs, labour, how much credit you give, and who borrows any small loans from you… even your relatives, Sipho advised. This will help you to be accountable, that is governance. A business can never be too small to grow. The opportunities to beome bigger and better abound. Carpe diem!
Images courtesy: Matthew Grollnek (Startup Junction)