Young businesses begin with meagre resources and always on tight budgets. Sounds all too familiar? What problems do you know startups face? Well, one of the challenges they battle with is inadequate human resources for accelerated growth.
The dilemma here is, should you spend funds to attract qualified persons to take your business to the next level or compromise by bringing on-board family members and close friends to cut down cost irrespective of abilities?
In this piece, you are exposed to the down side of such a move from the contributions of membership of The Spirited Hub Facebook Community.
1. Can you imagine losing control of your small business?
Starting a business gives you a sense of ownership of a growing entity that you must nurture carefully like a mother to her new born, in order to see it develop as you ideally have envisioned it. Relatives, may force you to make unwise compromises, affecting the smooth running of the venture. They may assume the company a family venture where you should not appear to have full control. If limits are not defined from the onset, you can be sure your grip on the business and where you want it to be will collapse.
In the wisdom of @Asamoah Desmond, “I totally disagree. We don’t do business with family and friends. In rare cases we get friends and family members who discern deep into the mission and vision of the company. For control purposes it is not advisable.”
2. Employ only people who share your dream with expertise.
A new company is like building a new house. You need carpenters, masons, electricians, plumbers, etc. who are knowledgeable in whatever duty they are supposed to perform to complete the project. Every single person you bring into the business should be offering a service that they are good in thereby sharing in your dream even if they are relatives and cost cutting to introduce relatives can lead to duplication of strengths and leaving weaknesses unattended to.
“It is very dangerous engaging the services of family members to beat down cost. If you really want to build your business, then you need to employ people with that expertise or those who share in your dream. If a family member shares in that dream, you can employ him as well but not for the purpose of cutting cost.” – @Asamoah Desmond
3. Spend time learning to Do It Yourself (DIY).
“Beating down costs is totally understandable but you should also keep in mind that something that may be expensive today will save you a lot of stress in the future and hiring someone who may not be an expert just to beat costs now may cost you more down the line. You should also bear in mind that relatives don’t always work well and may slow you down to get things done. The best thing to do is this: whatever your business needs, learn to do it yourself in the beginning. As you grow, you can delegate to someone who is an expert. It’s really difficult but in the end you will know much more about every aspect of your business and make better decisions about where to improve. You will also earn the respect of those who work with you because they know that they can’t tell you stories and if they don’t do it you will just do it yourself and get rid of them.” – @Edem Kumordzi
4. Ultimately, you will spend more remedying the mess.
“No! My principle: Don’t Employ Family Ever! You have already failed if you start thinking that you can hire people regardless of their competencies.” Follow a little analysis.
“$20 diesel is more than $50 petrol. So I buy $20 diesel for my petrol consuming generator. I have been trying to spark it for an hour now. I call in an expert to help me spark my new generator and it so happens that the diesel has made the generator faulty somehow and now, I have to spend the following to get it fixed:
- TNT to and fro the repair shop = $20
- Workmanship for fixing = $25
- Petrol = $50
Total = $95 plus the $20 I already spent on the diesel = $115
So I end up spending $65 more because I employed the services of diesel regardless of its competence to beat down cost as against spending a $30 more to buy petrol because that is what my generator needed in the first place.” – @Nora Delali Kumahor
With these said, if you are considering employing a relative to help you start and run your business do a proper analysis of how beneficial this move will be in your best interest. Good luck!
Are you convinced and what is your take? Leave your comment.
Source Beauty is pushing the boundaries of Egyptian e-commerce
Egyptian e-commerce: the county’s digital drive has not yet gotten to the growth typically seen in European countries and North America. However, as businesses have started shifting online, customers are now following suit, resulting in the gradual development of the digital eco-system.
Innovation, such as digital marketing, is reinventing the consumers’ path to purchase. The Egyptian e-commerce market is expected to grow at a rate of 33% annually to approximately $3bn by 2022, according to Oxford Business Group.
Source Beauty and disruption
The increase in e-commerce comes from rising internet penetration rates, driven by connected and digitally savvy millennials. Several platforms, both locally and internationally, such as the direct-to-consumer beauty platform Source Beauty, have disrupted the beauty industry in the region to drive their growth by truly connecting with their customers.
By being aware of the changing consumer behaviour trends in the e-commerce landscape, service providers like Source Beauty are continually fostering customer engagement with a community they have created. The customer service team, along with the editorial and marketing teams, respond to each comment and direct message, making customers feel listened to.
Lydia Schoonderbeek, the founder and CEO of Source Beauty, said:
“Egypt has traditionally been a price-driven market. After devaluation and high inflation rates, people have become much more price sensitive. People are consuming less and are shifting away from imported products due to price, accessibility and inconsistency in supply. As a result, they’re looking for local alternatives.”
In line with its digital transformation and financial inclusion agenda, the Egyptian government has set in place directives to raise the limit for electronic payments for individuals via mobile phones to EGP30,000 (USD1,905) per day, and EGP100,000 (USD6,350) per month, since March 2020. Traditionally, 70% of online purchases were cash on delivery, which has proven to be a major challenge to e-commerce growth throughout the region. This preference has changed to credit card payments, increasing to 30% from 16% due to the spread of Covid-19, but it remains to be seen whether purchasing behaviors will be affected in the long term.
The CEO of Source Beauty further added that, the company had seen substantial growth thanks to the COVID-19 global pandemic, with existing and new customers wanting to limit in-person beauty services and adhering to social distancing and mask-wearing requirements. Beauty customers, she says were changing spending habits, moving towards products that allow them to recreate the salon experience in their homes and protect them from the potential impact of an increasingly digital lifestyle. Finally, she believes they have seen customers prioritising skincare and haircare purchases over makeup.
The question is, ‘Is anyone in Egypt going to buy beauty products online?’. Who thought people would buy books on the internet from a website called Amazon! Well, the answer seems to be YES. Consumer spending in Egypt on non-essential goods has reached EGP 3.90bn in 2020 and is set to reach 8.81bn in 2021, according to FitchSolution’s 2021 Report.
According to the Egyptian e-commerce beauty company, Source Beauty, it believes that the world is in an era where consumers are looking to associate with brands and not products, to make their beauty purchasing decisions and this is where homegrown brands like theirs will doubtlessly lead to economic growth in Egypt.
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