Wednesday, April 28, 2010

WHY MALAWIAN BUSINESSES RARELY SUCCEED

We Malawians, like any other nationality, have a hunger for business. When we get some money, we immediately begin to think of investing in some enterprise. However, few businesses succeed. Indians, Pakistanis, Nigerians and Chinese come here, do the same businesses we do but end up very successful. What is our problem?

Problem No. 1: We lack innovation. If my neighbour has a mini-bus and is making a lot of money with it, I, too, should buy a minibus. So does the next neighbour and the next and the next until there are too many mini-buses and too few passengers to board. Clearly we cannot succeed this way.

We need to be innovative. There are many things one gets to see in countries not so far away from here that could attract a lot of customers back home. We need to learn what the others do. Let us not be lazy and simply copy what the next person is doing. Let us come up with new ideas.

Problem No.2: Misuse of capital. The Malawian businessman, after making hardly enough, dips his hand into the capital to buy a big, expensive Mercedes Benz. He wants to shine in town. The Benz will keep consuming more and more money until the capital is dry. In the end, the business collapses.

Let us learn from the Chinese, the Lebanese, the Indians, the Pakistanis and the Nigerians. We should not be envious of them. We should copy from them and beat them at their game. Take an average Indian, for example. He comes here a poor man. He opens a shop, mostly using loans from friends and relatives. He chooses to sell nothing more complicated than paper bags. In no time, the business grows. He becomes the key supplier of paper bags in the whole city, then in the whole country. What is his secret? He separates personal expenditure from business expenditure. He will not use the capital to buy rice and chapatti for himself and his family. He can suffer in any way but the capital will remain intact. He will instead let it grow.

Problem No. 3: Dependency Syndrome. If our uncle has a shop, all our eyes will turn to the uncle. If the uncle does not assist us, he is a very cruel man. We will go about town telling everyone how bad the man is. We will even create stories that the uncle is Satanic, knowing fully well we cannot even prove it, that it is all a lie. We will not work hard to reach the level of the uncle. All brothers and sisters, nephews and nieces will line up for help. Yes, it is good to help, but there should be a limit. Make sure you tell them the capital is out of bounds. You will not use your capital to help others.

Problem No. 4: Lack of desire to learn business theory. A good entrepreneur must learn. That is what Mike Chilewe of Mike’s Trading did. He went to Harvard University for a course one summer. Naturally, he paid a lot of money, but it was an investment well made. Look around, even within the country. The Malawi Institute of Management offers a lot of short courses that might help, as do the Malawi College of Accountancy and the Staff Development Institute at Mpemba. Try to learn the basics of running a business. Intuition works, of course. There are plenty of examples of individuals who have never been to anybody’s school but are hugely successful in their businesses. But the world is changing. Those that attend these courses are not being na├»ve. They learn quite a few things that might be very helpful to their businesses.

I know the list is not exhaustive, but these are what, I think, are the major reasons businesses run by indigenous Malawians mainly fail.

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