Since the fall of the theocratic rule of Taliban in 2001 and the subsequent establishment of a democratic government with free market economy, Afghanistan has experienced a major boom in entrepreneurial ventures across the country.
The rise of entrepreneurship in Afghanistan is a significantly important but poorly understood phenomenon. According to Howard Stevenson, professor of entrepreneurship studies at Harvard Business School “entrepreneurship is the pursuit of opportunity beyond resources controlled.”
From Stevenson’s definition, it is clear that entrepreneurs take significant risk, lack appropriate resources and work under uncertain circumstances to build their dream start-ups. Therefore, it is important that entrepreneurs in Afghanistan follow an evidence based and step-by-step approach to become successful.
The five most vital steps that an entrepreneur must take to become successful in Afghanistan are discussed in more details below:
1. Prepare a solid plan for the business idea
As already mentioned, entrepreneurship is pursuing a risky opportunity with limited resources. As such for entrepreneurs to increase their chances of success, they must have an innovative idea that solves a major problem that the consumers are facing; and a concrete business plan to turn the idea into a reality.
Recent research data shows that lack of vision is linked with failure of many business leaders. The entrepreneur’s vision for a successful startup must be based on valid market data and deliver an appropriate solution for a problem in the industry.
Furthermore, the idea must be presented in a well-researched business plan, which outlines the startup’s goals, objectives, capital, resources and strategies for success.
A great idea captured in a thorough business plan shows an entrepreneurs seriousness, highlights the startup’s strengths and the market opportunity. It also allows the entrepreneur to raise capital from investors, form strategic partnerships and win more business.
2. Hire a star team
Sam Altman, founder of Y Combinator, one of the world’s most prestigious startup accelerators says “mediocre people at a big company cause some problems, but they don’t usually kill the company. A single mediocre hire in the first five months will kill a startup.”
Altman’s statement highlights the significance of hiring the right people in the early stages of a startup. Finding the right co-founders and employees can be one of the most important factors in ensuring the success or failure of an entrepreneur.
It extremely vital that entrepreneurs in Afghanistan hire talented team members who share their vision, bring diverse strengths and experiences to the team, are flexible, honest and committed.
The team members should be given clear job description, responsibilities and must be held accountable for their actions.
3. Keep the cash flow in check
Cash flow can be considered as the beating heart of a startup and its biggest killer if it stops. It is estimated that around 90% of the small business failures are attributed to poor cash flows. Entrepreneurs can have great businesses, huge revenues and outstanding profits, but if there is no cash, there is no business.
Successful entrepreneurs give their utmost attention to cash flows. They build up cash reserves when business is going well, and use it when times are tough.
To keep the cash flow in check, entrepreneurs in Afghanistan must prepare a detailed budgets for the money coming into their startups, monthly expenses and allocate funds for activities such as marketing wisely.
Just like a beating heart and a good supply food for a human, as long as there is a healthy cash flow, a business will thrive and ensure entrepreneurial success.
4. Collaborate strategically to grow
Strategic partnerships or collaborations can take a small startup from a dorm to centre stage of the corporate business community. The right type of collaboration can bring enormous value to small startups in terms of access to a large pool of new customers, investors for fundraising, technology, skills and spark innovation in new products development.
Entrepreneurs in Afghanistan should look for partners as early as possible for their startups who can help them market their products better to consumers, share their technology and know-how, and get feedback to improve their products and services. This can save costs, increase revenues and allow the startup to innovate a lot faster to keep up with the trends in the market.
Strategic collaborations can of great benefit but also pose challenges. Entrepreneurs must research extensively before committing to new partnerships.
5. Be patient, don’t give up
The words of the famous Chinese philosopher Confucius can be considered as a verse from the bible of entrepreneurship when he said ‘Our greatest glory is not in never falling, but in rising every time we fall.’
Latest research data on entrepreneurship indicates that resilience is one of the most important factors in ensuring entrepreneurial success. The journey of an entrepreneur is full of uncertainties and learning experiences. Based on the modern lean startup approach, entrepreneurs need to build products, get customer feedback quickly and improve on the go. This can be a daunting and tiring experience but perseverance can deliver a startup that is best suited to customer needs and destined for success.