Posted: September 15, 2010 in Palaver

“Good morning class, take out your writing books and calculators, LUV 101 is in session.”

This business of courtship is a tricky business. It is a business that requires a great deal of keenness to understand. I have tried engaging in it severally with varying results. Some have been good, most have been bad. But it is a business that all of us in one way or another are obliged to undertake. Which is why I feel duty-bound to share with you a few pointers on how to approach it.

Just like any business, this business of courtship is a competitive one. After all we do live in a Capitalistic world, don’t we? It’s called a free open market. Everyone is free to engage in any business they desire and the market is always open to new investors. It works a lot like tendering. When a business opportunity is available, the tendering committee announces to potential investors who then present their bids in the most enticing manner possible. Whoever proves to be the most alluring lands the deal.

Like most lucrative businesses, this business of courtship can be quite demanding. It requires a large capital investment to initiate. I will explain.

Capital is a crucial necessity for anyone intending to start a business. There are various types of capital. These include finance, labour and what-have-you.

Financial capital is the primary factor that an investor considers before venturing into any business enterprise. You must ask yourself; How much money is needed to start this business? Do I have such an amount of money? If yes, you are good to go. If not, then its best to withdraw before your goose gets cooked! Similarly, before deciding whether or not to initiate advances on a potential mate (I like the word ‘mate’ in this context; It basically summarizes everything relationships are about in two syllables, if you know what I mean.) one must evaluate how much financial investment such a venture would require.

To do this, examine the potential mate (alternatively referred to as ‘business’). If he/she/it adorns garments and you merely wear clothes, then you are incapable of running such a business. If the business is of large scale proportions and you can only be able to manage a small scale one, I advise that you reconsider your options. If the business is located in Upper Hill and you are clearly a River Road kind of person, don’t even bother about it. Because if you do, you will learn, much to your heartbreak why they say ‘mtu hujikuna afikapo’!

Then there is labour. Again, one needs to analyze a few factors here. How much labour is required? How much labour can you provide? To put it perspective, you must be able to meet the labour needs of your undertaking. If you are attempting to till a five hundred acre shamba with one jembe and panga don’t be surprised to find your neighbor having ploughed, planted and harvested in one corner of the shamba while you were busy working on the other. If you are understaffed, don’t be amazed if your customers knock on your doorstep every now and then to complain about the slowness of your services.

In this business of courtship, there are two categories of investors. There are direct investors and there are indirect investors. Direct investors are those who dig deep into their pockets to raise the capital to start the business. They take a lot of risk in such ventures and as such are keen to ensure that they get commensurate returns. However, in the event that the business should collapse or backfire, they stand to lose the most.

On the other hand, indirect investors operate on minimum risk. They only invest in those businesses which they feel will guarantee returns and even then, their involvement is highly precautious. Indirect investors prefer to wait until the business has been fully established (by the direct investors) before coming on board. If the business proves to be rewarding, they consistently buy small amounts of shares until eventually they end up buying out the original owners.

But like any other business, this business of courtship is ultimately about returns. Think profits and losses. If a business is creating losses, it is a bad business and only a fool would continue running it. Conversely, if it is raking in profits, it is a good business and only a bigger fool would want to shut it down. To ascertain whether a business is making losses or profits, a good investor must always keep a Profit and Loss account of the business. This will guide the investor to discern how practical the business is.

There are several indicators that measure the productivity of a business. If the business is consuming more than it is returning, it is making a loss and must be terminated. But if the rate of return of the business multiplied by the value of returns is equivalent to the total capital input, then the business is making a profit and should be registered as a sole proprietorship to keep away any lurking opportunistic indirect investors.

Class dismissed.


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