Coping with Losses: Whether you are in business or employment, you are bound to encounter some financial losses along the way. Losses are inevitable. But each loss comes with its own lesson. Today, we hear from entrepreneurs and business leaders on the lessons they have learned from their losses.
Supervision is your biggest responsibility: In one of my major branding deals, I labeled a product with the wrong customer information without noticing it. Then I proceeded to make deliveries. The customer was not pleased at all. I had delivered what I had not promised nor tasked to do. I had to recall all the delivered products and rebrand them afresh. This left my business in losses. But it also taught me that the supervision of my business is my biggest responsibility. I must be the most diligent employee in the business and make a habit of checking even the smallest of details. – Lyn Gicharu, founder of Lyn Enterprises, a company that brands and customizes water for corporates.
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Documentation: In 2012, a client borrowed a huge amount of money with the promise that he would pay it back. He completely reneged on his promise. He knew that there was nothing I could do to get him to pay. As I swallowed the bitter loss, I learned the importance of having all business dealings backed up by legal contracts and agreements. – Kevin Mutiso, CEO of android micro-lending firm, Alternative Circle.
Don’t be naïve in business: Do not be naïve in the business world. I learned this sometime back when I did a job pro bono for a client who promised to pay after my findings had been presented. It was a job worth more than Sh. 1 million. I was naïve about how things worked in the business world and failed to sign a non-disclosure agreement before testing the security of their system. This gave the client a loophole and they went ahead and applied all the fixes I had presented without paying me a cent. – Dr. Bright G. Mawudor, head of Cyber Security Services at Internet Solutions Kenya.
The stop loss measure: In all my investments, I always have a stop lossmeasure. If an investment drops beyond a certain level, I will just cut my losses and sell. I have learned that this prevents an investor from being sentimental about investments and clinging on to investments with the hope that the prices will correct and improve at some point. – Kenneth Kaniu, CEO at Britam Asset Managers (BAAM).
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Don’t be too easy with your money: While it is a good thing to be philanthropic, there are limits on how far personal acts of charity should go. This is because handouts have been my biggest financial weakness. Sometimes out of compassion, and having grown up in an environment of lack and poverty, I sympathize a lot and find myself handing out money that I could have utilized in more productive ways. – Raphael Obonyo, an advisor with the United Nations and the World Bank on Coping with Losses.
The small print: Always ensure that you have read and understood all contractual and business details. Sometime back, I got into a contract that looked very lucrative. But out of excitement, I failed to notice the small print that contained the tax details. Instead of the contract being tax exclusive, it was tax inclusive. I found this a year after signing it. I couldn’t go back and was forced to sustain a huge tax debt. – Dorcas Wainaina, Executive Director at the Institute of Human Resource Management, Kenya on Coping with Losses.