Fear of failure? Rather the effects of failure!

In todays edition of the Nation newspaper, First Merchant Bank vice chairman Hitesh Anadkat has decried the poor risk taking culture amongst Malawians. He noted that the country has a lack of entrepreneurs who are ready to risk it all for fear of failure. He pointed out other things like the need for people to sacrifice and save and also the need for the country to encourage entrepreneurs regardless of colour.

Mr Anadkat raised important issues in the paper he delivered to an accountants meeting worth noting. However he seems to oversimplify the issues as well. Here is a situation I put myself in if I were to take this risk. I save a few thousands of kwacha's, say K300,000, and venture into a business. I have a near excellent business plan and have the technical knowhow to get things going. Two months down the line the environment has changed and the market is not responding as anticipated. I go to a bank, for arguments sake it's First Merchant Bank, to get an overdraft facility. I have been a personal account holder for a few years but my business account is just two months old. I have no business track record worth talking about. My application for an overdraft is rejected, this is despite having a near excellent business plan. The reason it's not excellent is because I just didn't factor in one or two external environmental factors that could affect my whole business plan. So with no overdraft, my business folds. I go to a string of banks with a revised business plan to get a loan but it is rejected. Why? I failed before, am bankrupt so to say, am likely to fail again. After all, I have no business track record worth writing home about. So am basically screwed. Tail between legs, I start applying for a job. No one wants to take me because am high risk. I could leave anytime to go and restart another business. Am condemned to the growing list of the unemployed!

I know of a project under Absa Bank called the Incubator Fund where the bank will provide loans to people who intend to start a business but lack one skill necessary for business. Say a bartender with many years experience would get a loan and a person to help him with the finances for an agreed period of time. The person would handle procurement, marketing and customer service as he has the experience doing that. This way the business is definitely assured of short term survival while accounts skills are transferred to the owner or a partner/family member he will run the bar with. At the end of the day Absa Bank is happy it has empowered another entrepreneur who in the medium to long term will have full control over his business and make the necessary repayments back to them.

I think putting the blame squarely on fear of failure is not right. The domino effect from failure is not a pleasant one. It's torture!