Formal Business Dealings: Iga Zinunula

I know Iga Zinunula personally, he is a great guy working with UNDP'S Enterprise Uganda as Senior Business Linkage Officer (the last time i checked) Was happy to come across an article he wrote with echos many people and even my own experiences with this "thing" called business.

I think it prudent to share it with you. Better safe than sorry for sure. And by the way, its not always the other party at fault, we too could be on the wrong footing, so why not get in in writing?

Kudos IGA!

For further information please call on him 0414 251 810 or Email akamai.uganda@gmail.com who published this article

Best - Mo

------------------------------------------------------------------

Conducting a thriving business, especially among family and close friends” is often not hampered by lack of resources, lack of good ideas, lack of market or a myriad other things that can indeed go wrong with business, but rather by lack of attention to detail.

People often time that venture into something and invest large sums of money in partnerships, without ever thinking through the details of the intended
activity, let alone document them; family and “close friends” tend to be the worst offenders.

Consider the case of Muwonge who argued that Nsamba was his brother and therefore he needn’t sign an agreement with him as they were putting up a building together. Only 3 years later, Muwonge was lamenting: “Nsamba now says he put up most of the money and he wants 2 thirds of the rent money. He forgets the land was mine and land does not rot – I could have built slowly”.

With Olwe, it came in another form. Recently he said to me, “Imagine! Jack and I have been friends for 7 years; then we do this research assignment together, worth 7 million and all he gives me is 700k. Moreover I did most of the field work while he was busy at the university lecturing. That’s it; it’s over between us”.

My question to both Muwonge and Olwe was, “What did you agree?” Because I have come across this so often, I, rather detachedly, added in both cases, “Let me see the agreement or memorandum of understanding that you signed”. You have guessed it – there was none, in both cases.

There is need for formalization.

Formalization means to make something official or valid, (often) by deciding on the details and then signing a document. It is the setting out of intentions and operations in a formal and, if necessary, legal position/manner in order to give them binding and defendable recognition.

After I spoke at a Rotary Club in Kampala recently, a senior member of the club said to me (with wonderment on his face), “It is like you were talking about me!” “You see, my younger brother and I decided to survey the family land and have the title processed. I financed the whole thing but he was more directly involved; I was busy in the city, you see. I asked him to just put the title in his names, we would divide later. I trusted him completely. Oh!” He clapped his hands, in the traditional characteristic gesture of vexation.” He died suddenly, and his rascal of a son dispossessed me completely. He said all the land was his father’s for it was in his names.”

At the same meeting, a young lady argued that “You can’t formalize everything! Are you telling me that if I am giving half a million shillings to my sister to do some business, I should first make her sign an agreement? There has to be some trust!”

Yes, there has to be trust. The ideal would be that every man should be able to access a million dollars at the announcement, “My word is my guarantee”. However, Trust too has her stages. She can die in her infancy (and with her your investment) or grow to a veritable ally. Too often, she is used and abused and her death ends up hanging in the air like a bad smell. Formalisation is about putting into place mechanisms to help trust stand and grow. By necessity, it gets the parties concerned to think through, clearly state/document intentions, methods, activities, etc. Formalization goes beyond the signing of an agreement between sisters lending each other half a million shillings and does not stop at simply documenting.

Next time we will talk about five pillars that
should be attended to in order to grow a business.

_____________________________________________________________
THOUGHT YOU MIGHT LIKE THIS TOO ____________________________________________________________
START 2008 WITH A BANG! START 2008 WITH A BANG!
♦ Did you achieve all you had set out to do in 2007?
♦ How can you make 2008 even a better year?
♦ Are you able to balance your family and career?
Date: February 2, 2008 Time:7:30 am—11:00 am Venue: Hotel Protea, Kololo
(Along Acacia Avenue) Fee: Shs 30,000 per person
Booking: Akamai Global, Room 304, 3rd Floor, Diamond Trust Bld
Tel. 0414573506/0751516118/754472109 Email: akamai.uganda@gmail.com