Business - Fie

FAIP 2021 Week 7: Startup Legal, Regulatory & Compliance Environment

October 6, 2021

by movyll with No Comment Business Entrepreneurship

Scalable and sustainable businesses are premised on streamlined operations, effective cashflows management, actionable strategic growth plans and compliance to laws and regulations within the jurisdictions where they operate. In Week 7 of the Fie_Labs Agri-Incubation Programme (FAIP), we focused on the last component and dived into the specifics therein from a Kenyan context.

The goal for FAIP Session 7 was to unpack the legal, regulatory and compliance requirements for startups; and support the participating startups to start working on their complaince. We covered a wide array of business formalization matters in this session including business structuring & registration, acquisition of requisite licenses & permits, taxation & statutory deductions as well as standard operating procedures for businesses.

Under the business structuring and registration, we explored the basic forms of businesses allowed under the Kenyan law including sole proprietorships, general partnerships, limited liability partnerships, private limited companies and public limited companies. We dived into the pros and cons for each and identified the requirements that need to be met when one registers their business under each form of business. Key take away from this segment was for founder to start with a less complex business structure to help you gain legitimacy as a startup while you build your traction. Later on you can change the business structure based on the unique requirements within your sector or the growth stage of your business.

Business permits and licenses are often overlooked by startups who operate informally, yet they are very crucial in running your day to day transactions. Acquisition of the requisite permits and licenses should be prioritized at the beginning of every year so as to be compliant with local and national regulations; as well as avoid instances where the local authorities storm your business and close it down. The fines imposed on non-compliance are in most cases exorbitant and can easily cripple your startup. In the long-run compliance is cheaper than non-compliance.

Borrowing from the foundation we had laid in Week 6 when discussing Financial Planning & Management; we further explored taxation and statutory deductions from a compliance perspective. Under this segment we dived into the various taxes and statutory deductions that a startup operating in Kenya needs to file and remit depending on the type of business they run. The emphasis here was on understanding the different types of taxes and the legal ways to minimize the tax burden for the startup without engaging in tax evasion. To help the participating startups develop their tax & statutory plans, we outlined all the relevant statutory and tax rates, their due dates for filing and the penalties for non-compliance.

Finally, we had a discussion on streamlining systems and processes within the business through the development and implementation of standard operating procedures (SOPs). Most founders know what needs to be done on a day to day basis and they are able to run with their operations without any manuals for reference. However, this limits the growth for their startups, since they lack a structured way of standardizing their operations across their businesses as they scale.

In this last segment of Session 7, we emphasized on the need to have SOPs that document the business operations for ease of reference by your employees and other stakeholders who interact with your business. The assignment for the participating startups was to start with simple guidelines in bullet points format; then add more content to them over time as their businesses grow and become more complex.

FAIP 2021 Week 6: Financial Planning & Management

September 27, 2021

by movyll with No Comment Business Entrepreneurship

Over the first 5 sessions, startups participating in FAIP 2021 have been equipped with skills on how to start and operate a sustainable business model. In week 6, we dived into the real business of figuring out the numbers in their startups; and training them on how to develop formal business financial management systems.

The goal for Week 6 was to ensure that the founders appreciate the need for formal financial systems and processes as a prerequisite for business growth; as well as support them in developing effective financial management structures within their startups.

In this session, we explored the benefits of formal financial planning and management including boosting transparency and accountability which builds trust & confidence among all stakeholders. In addition, professional financial planning and management guarantees business continuity and security, which helps your startup to meet its financial obligations and achieve its growth objectives.

We further dived into the key elements of a formal financial system in a business including budgeting, book keeping, internal controls and financial reporting. Here the founders were taken through the whole accounting cycle starting with developing budgets for their start-ups, how they record their daily business transactions and how to finally generate financial reports to evaluate their performance and for decision making.

Besides the normal accounting systems and processes, the startups were further trained on all the statutory deductions and taxes they need to be aware of and how to implement them for compliance purposes. The taxes explored during the session include Value Added Tax (VAT), Pay As You Earn (PAYE) and the Income Tax. We also covered basic statutory deductions that each startup need to remit to the relevant government agencies including National Social Security Fund (NSSF) and the National Hospital Insurance Fund (NHIF).

At the end of the session in Week 6, the startups had a clear understanding of how to streamline their financial systems and process; as well as how to structure their cashflows in an effective manner, in order to be able to meet their short-term and long-term financial obligations as and when they fall due. To help them implement the lessons learnt, the founders were given a cashflow management tool to help them in tracking their cash inflows and outflows in a structured format and on a regular basis.

We also gave the founders a financial management health check toolkit for them to assess the health of their financial management within their startups. The toolkit assesses the health of six main elements in financial management in a business including: financial planning and budgeting, basic accounting system, financial reporting, internal controls, working capital management and staffing. The outputs of the assessment are customized recommendations on areas of improvements for each startup in order to strength their financial planning and management.

Financial planning and management is a continuous process in any business; and it gets more complicated as the business grows. With this understanding in mind, we are progressively supporting startups participating in FAIP 2021 in developing effective financial systems and processes that are suited for their growth stages; but also adaptable to new functionalities as they scale their businesses.

FAIP 2021 Week 5: Business Operations Streamlining

September 1, 2021

by movyll with No Comment Business Entrepreneurship Innovation

Having explored the whole process of acquiring and retaining customers in our week 4 session at FAIP 2021; we dedicated week 5 to learning how to set up efficient business operations for growth. Our goal was to help the startups to learn how to develop a strong operational frameworks that will smoothen their day to day activities; while reducing friction and duplication of efforts.

Using a manufacturing business example, the operational framework for an organization can be divided into three major segments: the inputs, processing and outputs segments. Under the inputs segment, the business interacts with its suppliers for raw materials and other resources needed to run its day to day activities. Next, the business moves into the processing segment where the inputs are converted into final products ready for delivery to the end users. On the outputs segment, the business interacts with its customers through delivery of the finished products and other customer relationship activities.

Defined in a slightly different way from the above example, the operational framework for any business can be categorized into the supply side, internal operations and the demand side. The functions for each of this segments are aligned with the description above; but the actual activities differ based on the nature of the business.

Mapping out all the key activities that must be done by your business for each of the three segments in your operational framework is a critical exercise that is most often overlooked by many startup founders. Operating on autopilot is a recipe for your downfall; and therefore it is very important to have all your operational procedures documented for ease of reference as and when they are needed. This ensures that everyone in the organization knows what they should be doing at any given time; and how their individual tasks contribute to the overall delivery of value to your customers.

In documenting your business operations, you need to develop procedure manuals that become standard guides on the process flows for all activities involved when transforming your inputs to outputs; and finally delivering value to your customers. Initially, you want to keep these documents simple, short and easy to interpret for faster adoption and implementation by your team. You will then build on them gradually and convert them into comprehensive policies for your business operations.

While developing the operational framework for your startup, you shall also be designing your organizational structure and establishing an organizational culture that will make working at your startup fulfilling. After clearly defining the key functions in your startup and determining the tasks under each function, you will have a clear understanding of the skills needed to accomplish those tasks.

The next step is to assess your skills capacity and those of your team members to identify skills gaps you have that need to filled; and finally develop your organogram based on the roles each team member will be playing in your startup. To professionally run your startup, you need to let the experts or professionals do their work. Based on the skills assessment of your team, you should assign each of them roles that are aligned with their core strengths in order to maximize productivity from the team.

In the common situation where the team does not have all the requisite skills needed to run the business; or where some team members will be overwhelmed with multiple tasks, you can contract external parties to offer the services as and when needed. Business processes outsourcing helps in cutting down unnecessary operating costs by paying for services only when they are required.

Administrative functions such as human resource, finance, customer relationship management among others can also be streamlined by use of cloud solutions that are now more affordable that having fulltime resource in your startup.

We are living in a digital age where “software is eating up the world“. For an assignment, we commissioned the startups participating in FAIP 2021 to map out their key activities and document their operational frameworks. Finally the startups will develop digital strategies for their businesses in order to align themselves with the ongoing fourth industrial revolution; where digital technology and data are driving organizational growth and sustainability.

Taylor Life in Other Word

February 6, 2020

by movyll Business Uncategorized

When, while the lovely valley teems with vapor around me, and the meridian sun strikes the upper surface of the impenetrable foliage of my trees, and but a few stray gleams steal into the inner sanctuary, I throw myself down among the tall grass by the trickling stream; and, as I lie close to the earth, a thousand unknown plants are noticed by me: when I hear the buzz of the little world among the stalks, and grow familiar with the countless indescribable forms of the insects and flies, then I feel the presence of the Almighty, who formed us in his own image, and the breath of that universal love which bears and sustains us, as it floats around us in an eternity of bliss; and then, my friend, when darkness overspreads my eyes, and heaven and earth seem to dwell in my soul and absorb its power, like the form of a beloved mistress, then I often think with longing, Oh, would I could describe these conceptions, could impress upon paper all that is living so full and warm within me, that it might be the mirror of my soul, as my soul is the mirror of the infinite God!

O my friend — but it is too much for my strength — I sink under the weight of the splendor of these visions! A wonderful serenity has taken possession of my entire soul, like these sweet mornings of spring which I enjoy with my whole heart. I am alone, and feel the charm of existence in this spot, which was created for the bliss of souls like mine.

I am so happy, my dear friend, so absorbed in the exquisite sense of mere tranquil existence, that I neglect my talents. I should be incapable of drawing a single stroke at the present moment; and yet I feel that I never was a greater artist than now.

Model Shares Her Packing

February 6, 2020

by movyll Business Uncategorized

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