Discussion #2 - Question #1

1.What specific skills are most useful in starting and growing a business in development minerals.

(a) Skills training in development minerals.

(b)Skills training Financial Management.

(c)Skills training in Marketing & Market analysis.

2.Which 3 major challenges/obstacles affect business the most at startup and scaleup expansion stages.How can these challenges be overcome?

(a)Working Capital;This challenge can be overcome by Government creating deliberate policy compeling Finacial intitutions to alow miners easy access to funds and low intrest rates.

(b)Inadequate knowledge in Enterprenuship Skills; More workshops should be conducted to make miners knowledgeable.

(c)Financial Management Skills;Equally training in this area will help over come the challenge

3.Briefly explain top 3 priority needs when starting & growing a business;

(a)Working Capital; any business require adequate working capital in order to buy tools, machinery and infrastructure required to conduct the business.

(b)Market Research;it is very important to conduct a market research about any product before you start production.

(c)Financial Management; Good book keeping skills will help you access how your business is performing and help you make you good business decisions.

 

The only program that I know currently addressing the 3 priority needs is under UNDP ACP-EU development mineral program.

 

Q1. The most useful entetprise skills when starting and growing a bussiness in the development minerals sector are:

1. Basic entrepreneurship skills which covers topics on who an entrepreneur is, planning a business and mapping the business environment and stakeholders.

2. Basic accouting which looks at accounting documents and procedures.

3. How to organize cooperatives and Association..which encourages communities to work together in a more organized and legalized environment.

These skills can be obtained from various private and government institutions of higher learning such as trade schools, business institutions and the department of agriculture and cooperatives.

Q2. The three major challenges that affect businesses at start up and scale up in the context of zambian rural communities are: 

1. Inadequate access to skills training, technology and capacity building initiatives

2. Lack of start up capital to obtain mining and processing licences and appropriate equipment

3. Lack of investment information, value addition skills and access to markets.

These challenges can be overcome through the following strategies:

2.1 Provide skills training, technology and capacity building programs to people who are working in the development minerals sector at grass root level through village structures such as the village and ward development committees.

2.2 Reduce bank lending rates, accept tradtional land certificates as collatral for borrowing from banks and decentralize the constituency development fund to ward level to help grass root businesses to benefit from the fund.

2.3 Provide investment, value addition and market opportunities by implementing local content policies in the mining sector, including the industrial policy which provides opportunities for wealth creation.

Q3. The top three priority needs when starting or growing a business are:

3.1 Mapping the business environment and identifying stakeholders as well as establishing networks

3.2 Understanding financial concepts that include financial management and discipline

3.3 Legalization of the business..which involves obtaining licences, tax certificates and all other necessary requirements to avoid corruption and business disruptions

Q4. I personally only know about the UNDP, ACP-EU Development Minerals program which is currently running in selected countries, the Zambia Development Agency ongoing program to support out grower schemes and development loans being given by lending institutions..but at a high intrest rate.

1a. What specific enterprise skills are most useful in starting and growing a business in the Development Minerals sector?

Technical & Financial Management skills are very essential to have when starting and growing a business in the Development Mineral sector. One must have a good understanding of the entire value chain and the key success factors of the mining activity you wish to embark on. 

1b. Where can they be acquired?

There are general management courses offered by training institutes. In Nigeria for example, the Enterprise Development Center (EDC) of Pan-Atlantic University provides holistic business development and support services to small and medium enterprises (SMEs) in Nigeria. In addition, technical trainings on Quarry Management, etc are occasionally offered as part of programmes sponsored by international donors (EU, World Bank,etc.)

 

2. Which three (3) major challenges/obstacles affect businesses the most at start-up and scale-up (expansion) stages? How can these challenges be overcome?

Some of the major challenges/obstacles that affect business the most at startup and scale-up are:

i) Inadequate working capital

In most cases, startups or scale-up projects succeed in accessing financing to acquire the required machinery but experience difficulty accessing financing for working capital at reasonable interest rates. While development banks may not be willing to give working capital in addition to financing for equipment purchase, commercial banks can be approached to approached for working capital financing given that a viable business case is presented.

ii) Lack of sound Technical Management

The lack of an experienced Technical partner often leads to operational challenges/obtacles during startup or scale-up due to lack of expertise needed to operate and manage the equipment. It is advised to always startup with an expartriate with experience who can train the workforce during the startup phase until the operation stabilizes.

iii) Poor cashflow management

Most businesses experience cashflow challenges when funds are not properly managed during startup. It is advised to engage the services of an experienced accountant to assist in managing the company's finances to ensure that productivity is maximized and overheads are kept at a minimum level.

 

3. Briefly explain the top three (3) priority needs when starting and/or growing a business.

i. Ensure that you conduct a detailed feasibility and business plan to have clear understanding of the market, the financing needs and the viability of the business before starting.

ii. Ensure that you have secured "adequate" financing to cover operations for at least a period of one to two years before commencing.

iii. Ensure that you have a good understanding of the market and have consulted widely with existing operators in the business to get clear understanding of the business and gain lessons learned and best practices.