It was recently announced that by the end of the year, $150 million will become available for Pakistani small businesses.
A private investment by USAID, Abraaj Group, JS Bank and Indus Basin Holdings, the focus is on helping already established small businesses in Pakistan to grow and thrive further.
Arriving as a result of the now expired Kerry-Lugar act and taking two years to come to fruition, it’s essentially made up of three separate pots of $50 million.
And although there are certain restrictions in place (SMEs must have annual revenue of at least $500,000, for example), the idea in principle is fantastic. $150 million to further enhance the success these businesses are already seeing? Yes, please.
But when you have access to that much money, it can present a whole host of problems. Similar to a child in a sweet shop, choice is great, but it also often results in headaches.
What do you buy? What do you invest in? What areas of your business do you focus on first?
And so, with that in mind, where exactly should you be spending any money you’re receiving?
Long term strategies are vital
In theory, you need to buy whatever it is your business requires. Every business is different and there are no set rules to the specific products or services you should be looking to spend money on.
And for many, a sudden injection of cash can result in the urge to go on a spending spree. New product lines. More staff. Bigger premises. Without doubt tempting, and although they’ll very likely have a positive impact, they’re all short term growth opportunities. They all have an instant impact, but where do they fall into the long term growth focus or your company?
Businesses need to make money. It’s the most basic principle. But many people think that money needs to be made instantly; it needs to be something that’s achieved in vast quantities as quickly as it can possibly be.
The reality is, most shrewd people in business would much prefer to see a strategy that works towards sustained, long term growth than one that looks great within the first year or two, but which then becomes volatile or simply has no long term focus.
As such, any part of this $150 million investment you’re able to secure – or in fact, any investment that’s made within your company – needs to be utilised to grow your business over the long term.
You will clearly have the foundations laid for success, and have seen the business deliver up until the investment point. Once the investment is made, however, those foundations need to be built upon. Not necessarily quickly or overnight, but slowly and steadily. Plans should be made. Strategies developed. Future goals laid out and a journey devised that details how said goals will be achieved.
Remember, there aren’t many businesses that are genuine overnight successes. Look at the likes of Airbnb. It seemed to burst onto the scene all of a sudden, but the reality is it started in 2007 and received its first investment in 2009.
Maintain the entrepreneurial flair
Yet as important as it is to invest in the long term, it’s necessary that to build upon the success you’ve already seen, you don’t let this hamper your entrepreneurial flair and spirit.
Playing the long game can often be seen as the safer option. You plan and prepare things more, which means you have a greater amount of time to understand where something may or may not fail or cause problems.
But when you’re doing this, it can sap away your gut feeling. As I’m sure all successful entrepreneurs and business owners will be aware, sometimes something can look like it definitely should or shouldn’t work on paper, but your heart is telling you something else. There’s something inside that’s telling you to ignore the data and go with your gut.
And no matter how much money you have invested in your business, you can’t lose this. You can’t let this instinct leave you or let that passion fade away.
Small businesses are known for being innovative. They’re known for taking a step outside of the box and although the bigger you grow, the more you can lose, this doesn’t mean you shouldn’t take (educated, calculated) risks at times. Sometimes, it just feels right to go against the grain.
Make every cent count
What’s more, with small businesses often starting with minimal funds, it’s vital you make every cent count, right? You worry whether every move you make is having the right impact on your business.
And akin to the above, no matter what you buy, this worry can’t leave you. You can’t get comfortable, just because you have a healthy bank balance.
When you worry, it ensures you don’t make rash choices or simple mistakes. You don’t just spend something for the sake of spending it and instead, you account for every cent; make everything that’s purchased count.
Therefore, to answer the question ‘what exactly should you buy with $150 million?’, my response is that there isn’t one set thing, but it should be invested in long term growth – and importantly, you have to make sure whatever you buy or invest in, it doesn’t detract away from the fantastic small business owner and entrepreneur that you are and which, importantly, has seen you reach the levels of success you already have.