Sunday 23 August 2020

HOW DOES ONE HANDLE BUSINESS SUCCESS?

HOW DOES ONE HANDLE BUSINESS SUCCESS?

Yesterday, I watched a six-part documentary on Death Row Records, the music label that nurtured the likes of Dr Dre, Snoop, Tupac, Warren G, Nate Dogg, Kurupt, Lady of Rage, Dogg Pound and a host of other gangsta rappers, whose music was my daily staple back in the day.

It is one of the best music related documentaries I have watched.

It is insightful not only for those in the music and entertainment industries but even aspiring entrepreneurs in other ventures.

Here is why:

In one of the parts, Suge Knight, its larger than life CEO, confesses that they were making an average of $300 million a year when business was so great.

He said their biggest challenge was to handle this success.

They had lots of money, fame and power and just did not know what to do with it.

When the fame and power got to their heads, they got embroiled in the West Coast/East Coast rivalry (Tupac Vs Notorious B.I.G) and before long, Tupac was dead, Knight, Snoop and Dre were facing murder charges...basically everything went up in smoke.

By the time, Death Row applied for bankruptcy in 2006, it had been on the deathbed for roughly 8 years.

People like Dre moved on to Interscope Records and has since succeeded in a number of other business ventures (Beats by Dre).

Which gets us back to the question: Why do many of us fail to handle success? Or why do some businesses fail at the point when they become successful?

Personally I am involved in a number of side hustles, besides my day job as Editor of The Nile Post.

Two of them have shown great promise and if it were not for Covid-19, one of them would be profitable by now. Even with the pandemic, its growth trajectory is encouraging.

My greatest fear however has always been how to handle business success, if it does eventually come.

It is a question many local entrepreneurs grapple with once they hit it big and smell success.

I am aware that the term success may be interpreted differently by different people.

To some people business success means being able to earn something, however little, from the business without hurting its capital base.

For this post, I am defining success to mean a situation where the business gives you more money than you can spend say in a month and still remain with something tangible to save.

For example if you have a business that makes a gross profit of Shs 20 million and your subtract your monthly expenditure say of Shs 5 million and another Shs 5 million as operational costs, you remain with Shs 10 million as net profit.

Many entrepreneurs will wonder: What do I do with this Shs 10 million profit assuming I make it consistently for 5 years?

Should I go on a self aggrandisement spree, splash money on luxuries, build a big house, buy a fancy car and basically announce my arrival on the big stage?

Should I live a frugal life like Mandela of the City Oil and Cafe Javas fame or Warren Buffet, the third richest person in the US, who lives modestly?

Should I keep on re-investing my profits into other ventures as an avenue of spreading risk?

What should come first: Self aggrandisement or business expansion?

Can the two things (self aggrandisement and investment) be done at the same time?

Some people have argued that life is meaningless if you can't enjoy your money.

Why have all that money and live in a small house or drive a small car? Life, they say, is too short.

I hear them and I understand where many are coming from.

Others derive satisfaction when their businesses impact society and create a positive legacy even at the expense of living what some may term as "miserable lives".

For instance people like the late Mukwano, the late Mulwana and Omar Mandela. These believe they have no point to prove to society by living lavishly. Their accomplishments speak for them.

Personally, I believe that our innate personalities, beliefs and the people we socialise with (social groups) determines how we handle business success.

Happy Weekend!

By | Edris Kiggundu

YOUNG TREPS
Business Management & Consulting
#youngtreps

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