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ADVANTAGES OF SMALL COMPANY
Most people see things the way they are; only few see things the way they could. Put in another way they say, “Eyes that look are common but eyes that see are few.” When you have foresight or vision, it affects your behaviour today, making adjustments because of what you see coming. There is nothing that can be done to stop time. Five years, ten years will come; nobody has control over that. This is 2005, it will soon be 2050 and God is not in a hurry. Your clock is ticking as you are reading this and if you say that it is a long time. It is not because it is already seconds shorter than when I first said it. From the moment you think about any point in the future, it is already coming. But the good thing about the people reading this column is that the future would not take us by surprise. What would look like serious problems to some people would be opportunities for us because success happens when opportunity meets with preparation. Most people fail because they are not prepared. You see what you are prepared to see and take advantage of the opportunities you have seen ahead.
We are addressing this week what I call the Small Company Advantage. This subject is important because when you are starting out, you may feel overwhelmed by your competition and I mean large companies. When you want to show up in areas where there had been other companies before and they have actually accomplished some remarkable things and have become large. You can feel overwhelmed.
I think, generally, this is the thought that influences our thinking as a nation today. As a nation we are not attempting to do so many things because other countries have gone way ahead in those areas and as such we are not trying anything. Even to start small. We are not trying to invent products to solve the problems in our immediate environment produce. We are not even trying to produce a car, however rickety it may be. We are not trying to produce several things and we should try. We should start from somewhere. Of course we need serous re-orientation because the average person here is so much in love with finished products from somewhere else, not realizing that is why the exchange rate is crashing and then when you look at the product you say it is ‘okirika’ made. The big question is: why should it not be made in ‘okirika? The one made in America did not start from where it is now. We need to start from somewhere. I learned there was a time Henry Ford produced a car, the Ford Model T, and it was only black colour. All the cars they produced were black in colour. Can you imagine almost all the cars in town to be black? They were there once. So, we may not be able to produce their kind of Jaguar now but we can do our own. The Jaguar is not a beautiful animal in the first place, so whatever our own cars look like will still fit the name.
If you manage a small business or you are about to start a small business, you have the tendency to be overwhelmed by the large companies but you should not be. Of course, the large companies have some obvious advantages but you must understand small companies have their own advantages and you find those advantages and maximize them.
The big trailer lorries have their own advantages but the small cars too have theirs. The small car may not be able to carry as much load but it can go faster. This reminds me of a joke about a Fulani boy who was riding in a trailer with his dad, and on seeing a small car zoom pass, he said, “Father, see how that small car is running, when it grows up it will be flying.”
Some of the advantages enjoyed by the big companies include, firstly, availability of funds. Large companies usually a lot of money that the small ones do not have. That is an advantage because when your company is small you have many ideas but not as much money to turn those ideas into money. For the big companies, they can afford to develop new product lines, do research, experiment and lose a little bit of money before they perfect their products and services. They can afford to market big time. They can come into the market and take it by force but for the small company there is need to take it bit by bit. There are some of those ideas that you will even put into writing trusting God for when there will be some supply.
Secondly, the large companies have a wide range of products or services to offer. Usually the small company has to start, and focus on one thing per time to get it going but a large one can afford to offer several products and services simultaneously. I was listening on TV sometimes ago to the Chairman and CEO of Thomas Nelson Publishing, a publishing house in the United States. They happen to be the largest Christian publishing company and he said that they churn out two new titles everyday and they print copies in their hundreds of thousands. For example, when they packaged ‘Good Morning Holy Spirit’, a book by Benny Hinn, a pastor in the United States, he was paid $1 million dollars up front as royalties even before a single copy of the book was printed. There are books that they print half a million; some 1 million for a start. If you are just starting in the publishing industry, you cannot do that. So you have a few products to offer. If you want to go into the soft drinks business now, you have to think very well, because by the time you consider Coca-Cola which has bought over Schweppes, Krest and so on, having bottled water too, you will realize you cannot as small company, take up such wide range of products.
The large companies can also, bring out products at a cheaper rate because they can produce in very large volumes. You know that the bigger the volume you produce the lower the unit cost. In printing, for example, we discovered that the difference between the unit cost of 1,500 and 2,000 might not be much. Because in printing you are charge per thousand run, so if you print 1,500 or print 2,000, you will be charged the same amount for the runs. Therefore when the big companies want to come out with their products they do it in large quantities. When they print the cover of their soap, may be Lux or Joy, the printer prints 5 million copies at the same time; makes it real cheap. But a small company just starting out producing “Dudu Oshin” or “Pupa Osin”; you cannot afford 1 million at the same time, so you tell the printer to do 10,000 then may be something more next time.
Fourthly, usually, the large companies have built up momentum over time. They have been advertising, supplying and have built up customer loyalty for some time so that gives them momentum. Even when something goes wrong sometimes, they can ride through the rough time without it becoming obvious. They can absorb some shock because they have gathered momentum for quite a while. For the small company, any small mistake or setback can be very obvious.
Fifthly, they have a system that is built already. In other words there is a structure in place and there people who have already been trained to run it. They have taken all kinds of courses, done all manners of seminars and workshops hence there a system that has been running. You found out, most times, may be the CEO is not around or something happens and one important manager is not around, you will notice the system keeps running because for every position there are one or two people waiting in line who have gained experience and can take over. For a small company, it may not be exactly like that most especially if it is a sole proprietorship, you are the only one. You know you can run a company all by yourself. You are the CEO, office assistant, Secretary and driver of the business and if anything happens to you, all those offices are closed for the day.
Large companies have credibility or reputation going for them. They already have a name. When you are starting out it may be hard for you to sell your products just because people have not heard about you before. But for the large company, usually they have a name; they have credibility and are dependable and sometimes people do not even think before picking up their products. They have that going for them.
Anyway, so much for the big company and you do not have to be overwhelmed by that.
[/b]
We are addressing this week what I call the Small Company Advantage. This subject is important because when you are starting out, you may feel overwhelmed by your competition and I mean large companies. When you want to show up in areas where there had been other companies before and they have actually accomplished some remarkable things and have become large. You can feel overwhelmed.
I think, generally, this is the thought that influences our thinking as a nation today. As a nation we are not attempting to do so many things because other countries have gone way ahead in those areas and as such we are not trying anything. Even to start small. We are not trying to invent products to solve the problems in our immediate environment produce. We are not even trying to produce a car, however rickety it may be. We are not trying to produce several things and we should try. We should start from somewhere. Of course we need serous re-orientation because the average person here is so much in love with finished products from somewhere else, not realizing that is why the exchange rate is crashing and then when you look at the product you say it is ‘okirika’ made. The big question is: why should it not be made in ‘okirika? The one made in America did not start from where it is now. We need to start from somewhere. I learned there was a time Henry Ford produced a car, the Ford Model T, and it was only black colour. All the cars they produced were black in colour. Can you imagine almost all the cars in town to be black? They were there once. So, we may not be able to produce their kind of Jaguar now but we can do our own. The Jaguar is not a beautiful animal in the first place, so whatever our own cars look like will still fit the name.
If you manage a small business or you are about to start a small business, you have the tendency to be overwhelmed by the large companies but you should not be. Of course, the large companies have some obvious advantages but you must understand small companies have their own advantages and you find those advantages and maximize them.
The big trailer lorries have their own advantages but the small cars too have theirs. The small car may not be able to carry as much load but it can go faster. This reminds me of a joke about a Fulani boy who was riding in a trailer with his dad, and on seeing a small car zoom pass, he said, “Father, see how that small car is running, when it grows up it will be flying.”
Some of the advantages enjoyed by the big companies include, firstly, availability of funds. Large companies usually a lot of money that the small ones do not have. That is an advantage because when your company is small you have many ideas but not as much money to turn those ideas into money. For the big companies, they can afford to develop new product lines, do research, experiment and lose a little bit of money before they perfect their products and services. They can afford to market big time. They can come into the market and take it by force but for the small company there is need to take it bit by bit. There are some of those ideas that you will even put into writing trusting God for when there will be some supply.
Secondly, the large companies have a wide range of products or services to offer. Usually the small company has to start, and focus on one thing per time to get it going but a large one can afford to offer several products and services simultaneously. I was listening on TV sometimes ago to the Chairman and CEO of Thomas Nelson Publishing, a publishing house in the United States. They happen to be the largest Christian publishing company and he said that they churn out two new titles everyday and they print copies in their hundreds of thousands. For example, when they packaged ‘Good Morning Holy Spirit’, a book by Benny Hinn, a pastor in the United States, he was paid $1 million dollars up front as royalties even before a single copy of the book was printed. There are books that they print half a million; some 1 million for a start. If you are just starting in the publishing industry, you cannot do that. So you have a few products to offer. If you want to go into the soft drinks business now, you have to think very well, because by the time you consider Coca-Cola which has bought over Schweppes, Krest and so on, having bottled water too, you will realize you cannot as small company, take up such wide range of products.
The large companies can also, bring out products at a cheaper rate because they can produce in very large volumes. You know that the bigger the volume you produce the lower the unit cost. In printing, for example, we discovered that the difference between the unit cost of 1,500 and 2,000 might not be much. Because in printing you are charge per thousand run, so if you print 1,500 or print 2,000, you will be charged the same amount for the runs. Therefore when the big companies want to come out with their products they do it in large quantities. When they print the cover of their soap, may be Lux or Joy, the printer prints 5 million copies at the same time; makes it real cheap. But a small company just starting out producing “Dudu Oshin” or “Pupa Osin”; you cannot afford 1 million at the same time, so you tell the printer to do 10,000 then may be something more next time.
Fourthly, usually, the large companies have built up momentum over time. They have been advertising, supplying and have built up customer loyalty for some time so that gives them momentum. Even when something goes wrong sometimes, they can ride through the rough time without it becoming obvious. They can absorb some shock because they have gathered momentum for quite a while. For the small company, any small mistake or setback can be very obvious.
Fifthly, they have a system that is built already. In other words there is a structure in place and there people who have already been trained to run it. They have taken all kinds of courses, done all manners of seminars and workshops hence there a system that has been running. You found out, most times, may be the CEO is not around or something happens and one important manager is not around, you will notice the system keeps running because for every position there are one or two people waiting in line who have gained experience and can take over. For a small company, it may not be exactly like that most especially if it is a sole proprietorship, you are the only one. You know you can run a company all by yourself. You are the CEO, office assistant, Secretary and driver of the business and if anything happens to you, all those offices are closed for the day.
Large companies have credibility or reputation going for them. They already have a name. When you are starting out it may be hard for you to sell your products just because people have not heard about you before. But for the large company, usually they have a name; they have credibility and are dependable and sometimes people do not even think before picking up their products. They have that going for them.
Anyway, so much for the big company and you do not have to be overwhelmed by that.
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