Focus on growing your business
Dis n Dat founder Pendo Galukande displays a cover of a gift box she has made at UMA Show Grounds, Nakawa recently. For a growing enterprise, the business of your business could be finding financing or penetrating new markets. PHOTO BY DOMINIC BUKENYA
What you need to know:
- While some people dream of success, others wake up and work hard at it. James Abola expounds on an economist’s principle about how individuals, businesses or governments can succeed.
- The South Korean company, Samsung was forced to recall its key product for 2016 known as Galaxy Note 7. The recall is estimated to cost about $3 billion (Shs1o trillion).
Towards the end of the 19th Century, economist Vilfredo Pareto wrote a paper which made the observation that 80 per cent of the land in Italy was owned by 20 per cent of the people. Later, management thinkers realised that the 80:20 rule or Pareto is true about success by individuals or businesses or even governments.
The 80:20 rule says that 80 per cent of the result or outcome is produced by 20 per cent of the effort. The main thing about the rule is not that it is mathematically accurate but rather it communicates the principle that a few vital inputs or effort produce the majority of the desired result.
In Uganda, 18 per cent of the labour force produces 70 per cent of the Gross Domestic Product (GDP). When it comes to agriculture, Uganda provides an example where the reverse of the 80:20 applies, and we see 20 per cent of the result being produced by 80 per cent of the effort. Agriculture contributes to only 23 per cent of GDP but it employs 82 per cent of the labour force.
What to focus on
Both the entrepreneur and the business enterprise must focus on the 20 per cent of the effort that produces 80 per cent of the result. That is what it means to do the business of your business. The business of your business is the activity or few activities which are most important for achieving success. For a growing enterprise, the business of your business could be finding financing or penetrating new markets.
If you go into say crop farming, the business of your business is not growing maize or whatever crop you choose but rather it is finding ways of reducing farm loss, especially reduction of post-harvest loss. The other possibility for the business of a farming business is value addition whether through elimination of middle men or converting the farm output into higher value products that can be bought by wholesalers or big processors.
The South Korean company, Samsung was forced to recall its key product for 2016 known as Galaxy Note 7. The recall is estimated to cost about $3 billion (Shs1o trillion). Samsung is not only facing loss of sales but it must find a way of reassuring buyers of its products that the company has what it takes to come up with good and safe innovations. In order to improve the effectiveness and safety of its innovations we are likely to see change of key personnel in charge of innovation.
As an entrepreneur, you must focus on doing the activity that produces the best result for your business and hire other people to handle the things you either do poorly or the things that take a lot of your effort yet produce very little or poor results.
Do the right thing: the thing that you are best at and the thing that is most necessary for your business to succeed.
James Abola is a business and finance consultant and coach. Email: [email protected].
Tips on succeeding
How to achieve this
• A few vital inputs produce the majority of the desired result.
• Know what the business of your business is
• As an entrepreneur focus on the activity that produces the best result for your business
