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Shocking: Only 4% Of Businesses Celebrate Their 10th Birthday!!

According to research, says Godfrey Gichuki, Executive Director, Africa Academy for Education & Research Ltd, 40% of the  businesses started fail in the first year. 80% of all business fail after 5 years. 80% of the remaining 20% die in the next five years.

This leaves us with only 4% of the total business making it to their 10th Birthday. Literally speaking, only 4 of the possible 100 businesses started today shall exist 10 years down the line.


That’s both sad and shocking.

Godffrey revealed that this massive and merciless fall is brought by one major truth: Most businesses are started and ran by technicians who lack entrepreneurial and management skills.

A medical practitioner will obviously open a clinic or chemist because he is a medic. Most garages are owned by motor mechanic who feel it’s time to sour to other financial levels. A video producer expert like I will definitely go for a production firm/ photo studio. Isn’t this the true scenario? Were most businesses around you not opened because the owners had skills in the services and products they provide?

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As you may have known by now, there are 3 main skills needed to run a business. To understand why it’s suicidal to start a business just because you have technical skills, let’s understand the role of each of the 3 skill.

1. Technical skills – practical knowledge and ability needed to accomplish a specific task. In absence of a technician, the work will stall.

2. Management skills – ability to make decisions on behalf of the company and lead other subordinate groups. A good manager requires two main skills: person skills (ability to effectively relate and motivate others to perform) and conceptual skills (ability to easily understand concepts, create and implement ideas. It’s important that a manager posses technical skills surrounding his area of operation.   

3. Entrepreneurial skills – the skills needed to spot an idea or opportunity and, with right decisions, take the idea to the market and eventually make profit. Entrepreneurs do know where the money is hiding, what to do and when, and who to involve to get it. Technical skills are not [really] necessary here.

Fortunately, we all posses the 3 skills.

 

The Problem

Mr. Godfrey Gichuki
Though every individual has some bit of technical, managerial and entrepreneurial skills, the tragedy is they are usually not in the right proportions, argues Mr.Godfrey. The people who start failing businesses are 70% Technicians, 20% Managers and 10% Entrepreneurs.

We all know the major aim of a business is to generate profit. Entrepreneurs will make sustained gains, Technicians won’t, and neither will Managers.

 

The Best Balance

For your business to hit the 10th Birthday successfully, you need to have 70% Entrepreneurial skills, 20% Managerial, and 10% technical.

Now you’re like boy! How do I do this?

The good news is you can always decide what you want to be. This article is not meant to discourage you. Neither do I cherish any though of bringing you down. The aim of this piece is to act like an eye opener to help change your course earlier in case you’re headed for dead log.
               
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The only known way to transform from a falling entrepreneur to a making one is by sharpening your skills to the right proportion. READ. LERN. GATHER INFORMATION. Whether you’ll take a book, search online, get a mentor or attend seminars, just get informed. But this if you want to be an entrepreneur and get a better reward of your life.

 

Conclusion 

Let me sum up with a citation from one of my favorite books, Think And Grow Rich by Napoleon Hill:

"Broadly speaking, there are two types of people in the world. One type is known as LEADERS, and the other as FOLLOWERS. Decide at the onset whether you intend to become a leader in your chosen calling, or remain a follower. The difference in compensation is vast. The follower cannot reasonably expect the compensation to which a leader is entitled, although many followers make the mistake of expecting such pay."

If you ain't a leader, be a good follower, for only good followers make great leaders for they create conducive environment to learn from their seniors.

 KEEP IN TOUCH: To crown this, I'll do a top-up article to show you the 3 major stages Godfrey discloses every business undergoes and why many business are stack in stage 1 & 2.

Godfrey Gichuki is a mentor and motivational speaker in building both emerging and existing entrepreneurs. You can reach him through the e-mail: kibuchigg@gmail.com