So the news on the streets is that Ndalo Media, owner of Destiny, Destiny Men and Elle magazines, is shutting down on 31 January 2019 as they have been experiencing cash flow problems.
While the irony of a company shutting down in January is not lost on me, this is indeed sad, sad, sad news. I keep re-reading articles hoping it will tell me something different, ALAS!
As an entrepreneur working for a start-up, I am no stranger to the guillotine that is cash flow issues for a business (big or small), so the impending shut down of Ndalo Media had me reflecting on my own journey and what I can learn from this.
I came to the conclusion that there are no new lessons to be learnt here, just old ones that we must not shy away from being reminded of, because they come with harsh consequences, namely:
1) Cash is king – don’t be fooled by your profit figure, Facebook shares, Youtube likes, Instagram followers or ability to acquire debt. Without cash your business is living on borrowed time!
2) Adapt quickly or die slowly – this has never been more relevant than it is now, because the rate at which your business gets left behind is faster and more severe than its ever been before and once you miss the wave its nigh impossible to catch up unless you have enough leverage to hold out for the next wave (the vast majority don’t)
3) Know how you make money! Have an in-depth understanding of your business model and the various factors that affect it – more often than not, when previously successful businesses fail it is not because of their product losing favour with buyers, but rather their business model becoming irrelevant and obsolete. The deeper your understanding of your business model and all surrounding factors, the easier and faster it is for you to pivot to a different model when necessary
Hopefully Ndalo Media can avoid the shut down like the Western Cape avoided day zero.