From Competition to Collaboration: The evolution of African women owned businesses

jennifer riria & suzanne f stevens

By Suzanne F Stevens | January 11, 2017

jennifer ririaDuring my interview with Dr. Jennifer Riria, Group CEO, Kenya Women Holding, on Wisdom Exchange TV, she spoke of a mentorship program she implemented in Kenya that was unsuccessful. The concept was for a well-established African business to mentor women in grassroots businesses while these women contributed to the product development for a more established business. When asked why it didn’t work, Dr. Riria simply replied, “The established businesses felt they were creating their competition.”

Ignite Excellence Inc., of which I am the president and founder, would never have existed if my investor had felt that supporting me would mean that he would be taking money from his own pocket. My business partner and I are both in the communications business, although we provided different services. He is in public relations, and I work in leadership, and sales training and development. Although most organizations pay for these services from two different budgets, there was a small area of overlap.  Ultimately our services complimented each other, and we leveraged the good client relationships that we both established. My partner provided me with the insight to start a business, and I provided him with another income generating stream, a great example of a business collaboration that benefited us both.

My business partner, however, also invested in creating ‘competitors’ in his own field of public relations. It is common practice that when a public relations firm represents one brand, it cannot represent a competing brand. My then-partner recognized that investing in another business did not create competition, but collaboration, and this practice ultimately expanded his business prospects and revenue.

Collaboration is the action of working with someone to produce or create something. After interviewing twenty African women business leaders for Wisdom Exchange TV, I can’t help but see that the opportunity to collaborate is not being capitalized on. I believe Dr. Jennifer Riria is right: a mentor program that assists with investing in women at grassroots can work. How?

There are many challenges in running a business:

    • Finding motivated staff
    • Having enough income generated in the business to pay that staff
    • Continuing to grow the business through new opportunities
    • Ensuring not only that your business is breaking even, but also is profitable
    • The list is endless…

 

Investment in grassroots women is increasing in many African countries. This is evident through the increase in microfinance schemes. Yet there seems to be little investment in taking an already established business and investing in its growth. The result of increased growth is hiring more employees, and more income going back to their families.

Since many women entrepreneurs are in the agriculture and textile/craft industries, their employees are often the same grassroots women that microfinance tries to assist. A great example of a women entrepreneurial business that is expanding by increasing their exports to Europe and United Stats is Sara Abera’s business, Muya Ethiopia. Sara is in the process of expanding her textile business from 100 to 600 weavers. Since weaving is an occupation that is done in rural communities, there is no doubt that Sara’s success has had a positive impact on several families and communities.

While investment in grassroots businesses is a good initiative, far fewer people are working to grow businesses that are already making a good income. Many of these businesses that are operated by women fall into the entrepreneurial trap. They continue to be hands-on in every element of the business while trying to grow and expand opportunities. This level of involvement leads to overwork and overextending oneself and in some cases, burnout, which eventually poisons the business as a whole.

In order for these mid-size businesses to get to the next level, they need to remove themselves from the everyday operations and seek new channels to distribute their products. They need new more efficient manufacturing processes, more financing solutions, and more education for their employees. There are a number of areas where a growing business can spend time to expand its prospects.

Now how can a mid-size business owner alleviate the constant demands while continuing to expand their business?

In short – mentorship. If a mid-size business hires an apprentice or two, they are preparing their business for growth. Selecting this person(s) may be a process, however, once selected there are some strategies an entrepreneur will want to implement in order to optimize the relationship. Of course you would only select an apprentice that has demonstrated commitment, trust, perseverance and initiative. These characteristics you will be demonstrated either by working for you or by providing a service to you. When hiring an apprentice it is prudent to ensure there are clear objectives and expectations. You may offer them an opportunity to learn various elements of starting and growing a business, the skills, the business acumen, and the management of people.

The other mentorship option is to hire independent producers and mentor them on how to run a successful business. You are paying them for their production, but as they grow their business, you receive a percentage of their success. I appreciate that these business models need a good accounting system and a degree of trust. That being said, *social collateral is used in micro financing very successfully, and should not be ignored here.

As the business owner, what benefits do you receive?

In the short-term you receive a motivated employee. In the long-term you may achieve one of two options:

1) They manage your business while you focus on the bigger initiatives to take your business to the next level.

2) They start their own business, and you provide them with the seed money to do so in exchange for a percentage of their business profits.

When establishing the mentorship relationship, discussing the possibility of investing in your apprentice’s business will be a huge motivator for the right candidate. As a result of this investment you agree to a certain percentage of ownership of their success. This could be 15%, 25%, or up to 49% of their business. The percentage would depend on many variables: how much money or time you will invest (just a side note: never take more then 49% of the business as you always want the person running the business to be the most motivated and feel they are in control of their own circumstance).

Of course this agreement would have to be formalized. By implementing such an agreement you’re assisting is establishing someone. You are providing the business acumen necessary for them to succeed. In return you are investing your energy into establishing a new business that in the future will pay you profits based on your earlier investment.

No longer is this person that you invested your time and energy in competition, but someone with whom you can collaborate and an emergency back-up when you receive orders too big for your organization to fulfill.

I would be bold enough to say that investing in your competition can be the evolution of the increased micro-finance initiatives.

Does this symbiotic business always work? No. I have hired a consultant to train my sales and leadership training, and he started his own initiative utilizing many of the philosophies he learned at my organization. These things happen some times. People learn with every experience. As I recommended, set up your expectations prior to entering into an apprentice arrangement. In this case I had just hired an employee, not someone to take the reins in the future. However, I did hire another individual who grew with me. When I decided to travel to Africa to fulfill a dream, he was ready to enter into a collaborative business relationship. Without investing in him, I would not have had the confidence to refer my clients to him, nor to travel for a couple years investing in a dream.

If you want to grow your business, you need to look around you at the people that do what you do, not as competition, but as potential collaborators. These people may help you grow your business, or they may become a major income stream, allowing you to explore other initiatives that you just never had the time to do.

Action: Look at your employees and see who is demonstrating the potential to be someone you can mentor. To further motivate them, offer them an opportunity to run their own business. Remember: it is not competition, but collaboration that will grow a small business to mid-size, and mid-size businesses to large organizations.

* Social Collateral refers to people keeping each other accountable without the exchange of money or other material wealth.

 


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About the Conscious Contributor

Suzanne F. Stevens, CSP, Conscious Contributor™ Cultivator
Social entrepreneur |International Speaker | Pioneer | Host |Philanthropist | Author

Lead tomorrow’s legacy today.

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2017 President Elect: Canadian Association of Professional Speakers (CAPS)
Awards: TIAW World of Difference Recipient for women economic empowering
*Accreditation: Suzanne is one of 61 Certified Speaking Professionals (CSP) in Canada and is in the exclusive 15% of speakers who have this designation internationally.

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