Identifying and Satisfying a Paying Customer, Understanding The Art of Collaboration, As Well As, Mastering The Concept of Effective Sales and Marketing – Chad Mhako

Brian Kazungu, 24/02/2021

Entrepreneurship is being globally accepted and embraced as an effective solution to solving many societal problems including unemployment and poverty but unfortunately, without proper knowledge, most businesses especially SMEs fail even in their first years after inception.

In a book titled The SME Handbook, according to Nico Jacobs, head of Absa Small Business, Small business failure rates are as high as 63% in the first two years of trading, of which some of the reasons for such a failure rate includes lack of skills, lack of funds and poor management.

As such, in its effort to promote entrepreneurship, EAI Virtual Hub (Entrepreneurship, Arts, Innovation), organises virtual meetings with experts from different economic sectors in order to address various challenges faced by entrepreneurs on a daily basis.

EAI Virtual Hub is a platform that seeks to empower young people in Zimbabwe to become financially independent.

Recently, it organised a virtual presentation under the theme Youth In Entrepreneurship, where business consultant, Chad Mhako, shared valuable business tips in response to questions by various entrepreneurs.

Chad is a seasoned consultant who works with startups and established businesses in helping them to develop concrete, actionable strategies which gives them better access to markets and finance through customer driven entrepreneurship approaches.

Below is a question and answer presentation adapted from Chad’s presentation on the EAI Virtual Hub.

Question: Quite often, there are many concerns on a wide range of issues around entrepreneurship, with some people professing their confusion on what business they should engage in. As such, what is your advice to such people who really believe that entrepreneurship is the way to go and yet they are not sure of the exact kind of business they must pursue?

Chad Mhako: In my experience as an entrepreneur and consultant. My response is always the same. Any business where you can secure a paying customer.

My philosophy is that your business starts the day someone is willing to pay you for what you have to offer.

Now, if you can repeat this profitably to scale, then you have a business. Once your business model is profitable, repeatable and scalable, then you are in business.

This is because paying customers are quite often the difference between a successful entrepreneur and the not so successful entrepreneur. When we start our businesses, we are usually trying to answer basic questions, no matter the jargon you choose to use.

Every business tries to answer the following questions: Who are my customers? Where are they? How do I get to them? Why should they buy from me?

I like to start with the customer in mind. Like I said, you don’t have a business if you don’t have paying customer. So whether you are farming potatoes from a sack, rearing chickens or doing the freshest deal in town. Everything boils down to the customer who pays.

This is why some people make mediocre products that still sell. The reason is that they know their customer, who they are, where they are. Basically, everything there is to know about the customer. They know their customer archetype.

People will ask, what’s selling these days or what’s fresh? These are me too kind of businesses. You can also do a-me-too business as long as you have a customer who will buy.

So, what does it take to know who will buy? The answer is – Customer Discovery!!

The basic building blocks to building a business are: 1) Discovering who your customers will be 2) Validating the existence of those customers 3) Then making sure your value proposition speaks to their needs 4) Then you build your enterprise.

Some people say that we will build it then customers will come. Others say, we will farm and then they will buy. We will manufacture first then customers will buy. Sometimes it works, but most of the times, it doesn’t. Don’t let the clichés fool you.

Question – What is your advice to aspiring entrepreneurs who have the passion for business and yet they do not know where to start?

Chad Mhako: I say start with a familiar problem, but make sure there is a large enough demand for the solution to that problem. Some problems are not worth fixing in terms of viability and profitability.

Question: From your experience, what have you identified as an effective approach of attracting paying customers or converting people in any community into customers who pay for what you have? Is it always about good marketing or it’s about your circle of interaction?

Chad Mhako: Knowing who you are your customers and where they are is a great starting point. My customers may be active on Facebook whilst yours are active in a market with little or no interest in social media. As such, if I recommend you to do a social media campaign which works for me, what you will get are vanity metrics, mere numbers which look wonderful on paper but mean zero to your bottom line,. So customer discovery is key

Question – From your experience in consulting for startups, which mistakes do you think we tend to do as young entrepreneurs and how can we avoid them?

Chad Mhako: The following are some of the mistakes that entrepreneurs make: 1) Hype over substance 2) Copying and pasting without context 3) Listening to clichés 4) Putting the cart before the horse, that is, wanting a quick buck and not being willing to build.

Question – How can one grow their startup with a minimum viable product, how can they attract more funding for growth?

Chad Mhako: Your Maximum Viable Product (MVP) allows you to harness market feedback. It’s not the end product, it’s part of the building process. Businesses are undervalued at inception and the further you are from ideation, the higher the valuation

Question: What’s the role and advantage of collaboration in business?

Chad Mhako: Collaboration is the new competition. However, it must never be collaboration just for the sake of it. If not well thought through, collaboration can lead to business collapse.

As such, all parties must know what are their rights and obligations under the arrangement.

You should never leave anything to interpretation. Collaboration can take many forms and one must know what works for them.

Chad Mhako is an Entrepreneur and Business Development Consultant who helps startups and established business develop concrete actionable strategies that improve their bottom lines. He is a Managing Consultant at Abiyedu Kin and a Country Manager at Energyneering EPCM.

[email protected] / [email protected] / @ChadMhako on twitter