Sazi Ntuli

As an entrepreneur (or even corporate slave), your emotional intelligence (EQ) is far more important than your technical intelligence (IQ).

As per a research study done by the Carnegie Institute of Technology, 85% of one’s financial success is attributable to skills in human engineering - one’s personality and ability to communicate, negotiate, and lead; whereas contribution of technical knowledge is only 15%. (Who the hell knows how they worked this out, but they did, and I’m inclined to agree).

Your technical abilities get you in the door with investors, partners and associates; but emotional intelligence helps you manage your relationships from that point onward.

For some, a great EQ comes naturally, but not everyone is gifted in the same ways. If you feel that your EQ is lacking, it is time for immediate change. Do some research on this topic, try to monitor yourself, and identify your problem areas.

Master the complexities of this unique and often understated form of intelligence, and watch yourself improve as an entrepreneur and all-round business person. 

I believe motivation is highly subjective and that each person has a unique motivational catalyst. So this post isn’t actually written to motivate you (LOL). What this post will do, however, is give you 3 distinct suggestions on how you can generally stay motivated by yourself. These are based on observations made in my brief time working with entrepreneurs. Of course, like with anything, this is not a closed list.

1. Have Passion For What You Do:

You’ve heard this plenty of times, I know, it’s annoying to me too. But we wouldn’t hear it so often if it wasn’t so important.

Steve Jobs, when addressing a crowd at his alma mater, famously said “You've got to find what you love. And that is as true for your work as it is for your lovers.”

Do what you love, and not in an airy fairy, kumbaya kind of way. If you derive actual pleasure from what you do, you are likely to be more motivated than the average person. It follows that people who do what they love will approach their work with a guaranteed level of enthusiasm. I don’t think this needs a great deal of explanation.

2. Find A Suitable Co-Founder:

Some of the best companies in the world were started by co-founders (e.g. Apple, Microsoft, Procter & Gamble, etc.). Often, a start-up is launched and maintained through a combination of expertise, which, for complex projects, is hardly ever held by a single person. Sometimes it takes 2 or 3 people to start a project. So the importance of compatible co-founders cannot be stressed enough.

Like with every endeavour, there will be challenges that dampen the passion. The honeymoon period WILL end, and co-founders need to understand their effect on each other because this can serve as the necessary spark to push each other forward. During a slump in motivation, if you don't feel more motivated after speaking with your co-founder, he or she may not be the right person for you to work with.

Some questions you should ask about your co-founder - When you are not feeling your best will they be able to take control? Do they create a mood which is conducive to productivity? How do you feel after talking to them about a hurdle you are facing? Do they actually have the capacity to perform the tasks that are needed to drive the project forward?

To achieve the best results, be brutally honest with yourself when answering these questions. Based on your answers, you may need to make some changes.

I left the first business I started at University because I could no longer work with my co-founder. The person whom I had originally chosen as my co-founder because of his technical knowledge of the (media) industry became the reason for my loss of enthusiasm. I am not sure what the root cause was, but my co-founder started developing a habit of killing the business relationships I had worked hard to build (and other bad habits, which are best left unmentioned). In turn, our reputation as a serious business began to take a knock. But this wasn’t yet the issue. The real issue was his inability to realise his problem, and then act in accordance with such realisation. 

Needless to say, I was brutally honest with myself - I just did not believe that he had the capacity to perform necessary tasks anymore, so I cut all professional ties with him.

3. Figure Out Your Motivational Currency

I define motivational currency as: a positive response which fuels the desire to be productive.

For example, I run a consulting business. Now, as much as I love what I do, there are mornings which feel completely hopeless (because - life) and my reason for continuing has escaped me. However, my mood suddenly changes when I get up from my bed, check my mail, and find an email from an entrepreneur requesting my services. After viewing this email, I feel a new energy, a sense of purpose, which prompts me to keep going. I am motivated, and the email is my motivational currency. 

If you are an outdoor event organiser whose event receives good reviews on social media and in the local papers, such reviews are your motivational currency because they prompt you to repeat the amount of effort put into your work, in pursuit of the same or an even better response from your market. 

This type of “currency” is different for different businesses, and is usually controlled by external factors. We cannot determine when motivational currency will be forthcoming, but the more work we put in, the more motivational currency we are likely to receive. (i.e. the more good work I do for my existing clients, the more likely I am to wake up to an email requesting my services.)

Conclusion:

Staying motivated is, in my opinion, the most important thing for any entrepreneur. You can do anything you set your mind to with the right amount of motivation. Conversely, you can do very little without it. This is why it is crucial for entrepreneurs to find what motivates them, and have ready access to it whenever it’s needed.

So print this. Put it on your wall, and highlight the points which speak to you the most. Every time you feel demotivated, give it a quick read, and remind yourself of the ways in which you can regain your motivation.

“If you’re working on something important, you’ll never feel ready. A side effect of doing challenging work is that you’re pulled by excitement and pushed by confusion at the same time.” – James Clear

The Start-Up Guy is well underway. I have been working with several businesses, including a very exciting Johannesburg-based business which is launching in the next two months. I am so honoured that they used and continue to use my services.  

I’ve noticed a common trait amongst all the guys and girls I’ve been working with recently, and I thought it might be useful to share because I think many other people are experiencing the same thing.

Almost all entrepreneurs don’t know what they’re doing and it’s perfectly okay. In fact, I don’t know of a single one who, at the outset, knew exactly what they needed to do and when to do it. Before your mind does that thing where it jumps to conclusions, let me explain.

A start-up is an experiment, a matter of trial and error. No one can be fully certain about the route it will take. At best, one can have a firm idea of the intended outcome, but whether that transpires is all dependent on the market’s response to your idea (and who really knows what that’ll be? Right?).

Sir Richard Branson has one of the most interesting entrepreneurial stories, for me, because he started many of his companies largely by mistake. He dropped out of school to continue a magazine business he had no idea was going to sustain him. As a way to grow his magazine sales, he started distributing music records made by unknown artists to his readers, and so began the journey of Virgin Records. He started Virgin Airlines after he was delayed by his flight facing maintenance issues before take-off. This guy is the epitome of just getting on with it. This guy is also worth $5 Billion today!

As an entrepreneur and business owner you have to embrace the learning process and continuously learn (by doing). Learn your market, learn your business, and continuously adapt your learnings to suit your market as you go. The entrepreneurs who embrace the learning process and respond to unexpected events in real time are often the ones who do very well.

Without babbling on for too long, the moral of the story is that not knowing what to do is not a good enough reason to not start your business. Passion and a basic idea is enough. Even if you are physically incapable of carrying out certain tasks, outsourcing skills is a thing (like helluurrr, this is why people like me are here). It is no mistake that one of the single most important traits that investors look for in entrepreneurs is passion, especially in the very early stages of a start-up. Not “intelligence.” Not qualifications. Passion (synonymous with commitment/dedication in this regard). A founder who is not passionate about what they are doing will give up when they face the inevitable hurdles of starting a business. Passion is the fuel by which a project goes from start-up to a fully-fledged business.

Now don’t get me wrong, I am not saying that you can go and start the next big business with the technical skills of a toddler. I am merely saying that, within reason, you can start a business without the technical know-how, as long as you have the dedication to follow through with the necessary steps. In doing so, be realistic, tread carefully and always consult a professional when you’re thinking about making an expensive decision.

If whilst reading this article you had a certain project or idea in mind, maybe it’s time to pursue it with everything you have. Why aren’t you? That was not a rhetorical question. Like Richard Branson famously said, “screw it. Just get on and do it.” If you are really struggling with how to conceptualise or begin your business, consult me and we can find a solution together. 

Once again, thank you for reading.

“If you cannot explain it simply, you do not understand it well enough.”

  - Albert Einstein

As I was writing about the purpose of Shareholders agreements (for your consumption), old schoolmates sent me a Direct Message on Twitter, informing me that they are pitching their project to investors in a few weeks’ time. Hopefully this will go well, and I’ll be able to share their experience with you.

They were inquiring as to the information they should be aware of before the very important day which could change their lives forever. Whilst expressing my joy for the progress they had made, and at the fact that they asked me, I remembered that this is information which would be useful to my readers as well. So I put my piece on Shareholders Agreements on hold until another day and opted to provide the information herein.

Now I’m not proposing that you go before investors and start to blurt out terms which you have rote learned. That would only be the correct approach if you were presenting a grade 10 Afrikaans oral. All I advise is that, within the confines of your pitch, you cover the below topics. Style and additional content is unique to each founder, and should never be prescribed, in my opinion. Some of you who studied finance at school will be familiar with some of the terms.

In an effort to not bog down this post with extraneous information, and to make for easier reading, I have kept the definitions very brief. Detailed definitions can be found anywhere on the internet or any decent finance book. I have also provided a reference list for your perusal if you are interested in studying the content.

Gross Margins  

The gross margin represents the percentage of total sales revenue that the company retains less the incurred direct costs associated with producing the goods and services sold. [1]

 Net Margins

“The percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company's total revenue.” [2]

 NOPLAT (Net Operating Profit Less Adjusted Taxes)

“A measure of profit that includes the costs and tax benefits of debt financing.” Very basically, NOPLAT is earnings minus taxes (but taxes excluding the effect of interest) [3]

 WACC (Weighted Average Cost of Capital)

“WACC is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital.” [4]

 WCR (Working Capital Requirements)  

“The required value of funds that a company is required to keep on hand in order to be able to pay its debt obligations and other business related expenses.” Several factors go into the determination of this requirement. [5]

Naturally, this is not a closed list. I have assumed that every other relevant aspect of your business, as the founder, comes naturally to you, consciously or otherwise.

Of course, there are extra terms one should know (such as HEPS & EPS) as the business becomes larger and is moving toward publicly trading its shares (if that is the intended path), but this is not relevant for now, seeing as my targeted readers are founding entrepreneurs, small business owners, and anyone interested in that space.

I remember watching a talk given by Lebo Gunguluza (Media Mogul and Investor) in late 2016. During the talk he mentioned that investors know before you even finish pitching whether you have an investment-worthy business or not. According to Lebo, a good pitch tells a good story. So what is a good story?

Have you expressed the problem your business is solving or intending to solve? This includes the motivation to provide a solution to the problem; the cost of configuring the solution; the need for capital (or otherwise) investment; how the capital investment will be utilised; the market’s response to your solution, etc. These are all ingredients needed for a good story.

In closing, the best reason to pitch to investors, in my opinion, is needing capital to fund inventory. I do not recommend approaching investors so they can do the all the work for you on an idea you have, while making you rich in the process. That’s not how it works, everyone has ideas. You need to find a way to separate yourself from others by showing commitment towards yours. Remember that legitimate investors invest in the entrepreneur, not necessarily the business.

If you want an in-depth explanation of the above terms, or even discussion on the topic of pitching to investors, you know where to find me. I am also happy to link anyone to my network of experts who are well-versed in investments and venture capital funding.

Good luck!

Special thanks to Dave Guqaza and Njongo Samente, my go to friends for accounting and financial expertise.

Reference List

[1] http://www.inc.com/guides/2010/10/tips-for-calculating-your-gross-margin.html

[2] http://www.accountingtools.com/questions-and-answers/what-is-net-profit-margin.html

[3] https://www.readyratios.com/reference/profitability/noplat.html

[4] http://www.valuebasedmanagement.net/methods_wacc.html

“Ideas are easy. Implementation is hard.” – Guy Kawasaki 

In a short space of time I have been approached countless times by young business owners (either people I know, or those referred to me) for advices (yes, that’s an actual word) on various issues relating to their businesses/ideas. The advices I provided ranged from explaining the taxes which small businesses are liable to pay, all the way to whether a business’s particular branding conflicts with the law or not. True to my nature, I have found this quite enjoyable.

So, I have been seeking a platform to share general information which is useful to business-owners and business enthusiasts (NOT OTHER LAWYERS). Someone close to me suggested LinkedIn, and I have taken that advice to heart. But I also thought it might be useful to provide information via blogposts and then share same through LinkedIn and my other social media pages.

Before we begin, I hate creative writing (because I suck at it). Public speaking is more my niche. So on this page you won’t encounter any Warsan Shire-like pieces. Conversely, it won’t feel like you’re reading the terms and conditions of a win-a-car competition (which you should read, by the way). Expect something which falls in the middle. The goal I seek to achieve, ultimately, is to disseminate information which I believe will be useful to small business owners and those hoping to be in the future.

So why this theme specifically? Well, anyone who knows me, knows that I am obsessed with enterprising, especially if the enterprise is an innovative one. When I envision a 50 year old self, I will have long-retired from the legal industry, and the majority of my time will be consumed by, amongst other things, assisting small businesses and innovative concepts in escalating to a healthy level of profitability, or at the least, renowned market status.

The beautiful thing about the law degree (LL.B) is that it not only affords one expertise on the law, but also basic proficiency in the fields of finance and commerce, which results in a well-rounded understanding of business. So fortunately for me, and you, I know what I am talking (or rather, writing) about.

In a way, this page also serves a secondary purpose, in that it allows me to record my own journey while I work on the side-projects that I intend to work on in the near future.

If you are a business owner, or you think you have a great idea for a project, contact me and let’s talk about any issue you may have. If you don’t think you have issues, contact me anyway, because you most likely do, or will in the near future. If I can’t help you, I can point you in the direction of someone who can (I have a healthy network of capable people). If you are in my area code, buy me a cuppa and we can talk in person. I can provide you with simple advice such as what to do when registering your company; what to do when you’ve thought of a great idea that you seek to protect; or even how to profile your company online so that you can attract the right customers and investors - the list goes on. 

My first bit of advice to young business owners, in short, is to work preemptively. The most successful business owners do this habitually. Work to avoid foreseeable problems and work to prepare for eventual opportunities. The best way to do this is to have an advisor/consultant throughout each stage of your project’s development, hopefully one that won’t drain your funds which could be better used on inventory and so forth.

I will provide these services (which lawyers/consultants charge thousands for) for free in the beginning. As time goes, I will start to charge laughably low rates. In due time, I shall post a list of all the services I am willing to extend, so be on the lookout.

More content coming your way in due course...