I will be borrowing the words of some eminent leaders of past centuries as a framework for our discussion today.
“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, this person began to build and wasn’t able to finish.’
“Or suppose a king is about to go to war against another king. Won’t he first sit down and consider whether he is able with ten thousand men to oppose the one coming against him with twenty thousand? If he is not able, he will send a delegation while the other is still a long way off and will ask for terms of peace”. Jesus (Holy Bible)
“He who wishes to fight must first count the cost”
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win” Sun Tzu (The Art of War)
Life or Business can be similar to warfare with strategies needed to win
What does it mean to count the cost?
I asked a few entrepreneurs and this is what they came up with
“Weighing options I suppose; what it will cost in people, reputation, sweat and funds etc to do or not do anything”
“Salaries, finance, police, traffic, delayed payments”
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“It means ensuring that I have considered both the input and the impact of any decision I make to the business. It goes beyond the financial investment of a decision but also the value of other things that might affect the business both short and long term.
This makes it easier to make a correct decision or at least one that you don’t regret”
To count the cost means to plan, evaluate, prepare, estimate in advance before venturing or proceeding on a venture.
Why is it important to count the cost?
Possibly Jesus and Sun Tzu understood that humans were quick to commit to things they had no intention of following through on.
How quick are we to make commitments about personal and business decisions?
When we decide to have children or start a family, do we estimate the investment in time and resources required to feed, educate and nurture them?
When we start a relationship with a potential business partner, do we estimate the value required to keep them interested?
Key Steps to Counting The Cost
Build to finish. Start with the end in mind
Follow Blueprints. Reference principles and established pathways
You need a Plan. Create a plan that wins and you can adapt along the way (Not every plan is a good plan)
Follow Through. Develop the conviction and staying power to finish what you started
How To Count The Cost
Evaluate: Research, Feedback, Assess alternative options and obstacles
Estimate: Time, Resources, People, Relationships
Consult: Seek advise from those who have walked the path or have access to information you don’t have.
To know what resources will be required to finish you don’t need to have all in place to start but at least you know what is required.
How not counting the cost can affect a business
NOKIA– a company founded in Finland was the first to create a cellular network in the world. In the late 1990s and early 2000s, Nokia was the global leader in mobile phones.
With the arrival of the Internet, other mobile companies started understanding how data, not voice, was the future of communication. Nokia didn’t grasp the concept of software and kept focusing on hardware because the management feared to alienate current users if they changed too much.
Nokia’s mistake was the fact that they didn’t want to lead the drastic change in user experience. This caused Nokia to develop a mess of an operating system with a bad user experience that just wasn’t a fit on the market.
The company overestimated the strength of its brand and believed they could arrive late in the smartphone game and succeed. In 2007 Steve Jobs launched the iPhone, a phone without a keyboard, which was revolutionary at the time. In 2008 Nokia finally made the decision to compete with Android, but it was too late. Their products weren’t competitive enough.
Ride Hailing Business in Nigeria
Nigeria is ranked 131 among 190 economies in the ease of doing business according to the latest World Bank Annual ratings. This makes Nigeria a very difficult terrain to run a successful business compared to other markets. Planning, continuous Scenario analysis and Risk-taking using macroeconomic tools such as PESTEL(Political, Economic, Social, Technological, Environmental, Legal) is crucial to survive in this market,
The failure to count the cost of doing business for ride-hailing businesses in a sector where there is usually an interplay of government regulations disrupted the business models and investments of key players.
Counting the Cost should be a continuous process which means that at some point what may have worked may not be plausible given present circumstances which will require a separate analysis for direction.
In conclusion, do not start to draft out a business or marketing plan until you have counted the cost of what it will take to WIN continuously.
Olusayo Odunsi is a Marketing Strategist and the founder of 360degrees Concepts, a marketing agency that builds SMEs into global brands.
LinkedIn: www.linkedin.com/in/sayo-odunsi
