I’ve now been in Zambia for two years – well it will be two years next month, boy does time fly fast! I’m still getting used to both the way of life and the way people work here.

Zambia is an interesting place. We’ve suffered no real conflict since we gained our independence in 1964. While political leaders may have overstayed their use in power, by and large all our elections have been peaceful with power handover being free from any violence or unrest. This seems to be a good thing. But perhaps it talks to the passive nature we have as a people.

Most people I have met in Zambia are very laid back, hoping that somehow the work will do itself, and we’ll get paid for doing next to nothing, and one day we’ll be rich and financial secure. Sigh, if only.

Zambia operates as a cash based society, though most companies operate with a 30-45 day payment policy. The problem being that it’s a vicious cycle, clients have to pay, so that you can pay your suppliers, so they can pay their employees, so they can pay their employees and their kids school fees and so on and so on. When any part of that chain doesn’t work, it screws someone.


If you’re an up and coming company you don’t really have the cashflow to deal with late payments. The banks don’t extend credit unless you’re giving them something in exchange – i.e. cash or property to secure an overdraft or facility (zero risk for the bank, yet you still get charged a hefty interest fee), so if your clients don’t pay you, it puts you in a tricky situation.

This was a situation we found ourselves in the last month or so, our clients just weren’t paying and we couldn’t pay all our suppliers.

The first thing that I felt was huge embarrassment. There is nothing worse than not being able to pay your bills. It makes you feel almost like a failure, how did you not manage your cashflow, why are the client’s not paying, and not to mention the sleepless nights.

Then I started to talk to more experienced business owners, who asked me one question, what can you do about it? The reality was nothing. You can’t control when the clients pay, you can hope to manage your cashflow better – which you do learn – and you have to communicate with your suppliers.

At the end of day repeat business is better and cheaper than looking for new business. So you too want to manage your client relationships. Suppliers sadly to say are easier to replace, every day there is someone vying for new business. I’d prefer to keep my suppliers happy but when they too decide that they’re not interested in you as a client and treat you that way, why would you bother sticking to doing business with them once you’ve paid them?

I’ve talked about this many times – building relationships for long term growth – but I find it’s a recurring issue when doing business in Zambia, people just don’t value that relationship. It works even with friends and family you have credit terms with. As long as you sell a product, regardless of who the person is, you have to engage them as a customer and aim for repeat business.

Sadly most people don’t realise this. Today, I decided to stop buying shoes from someone who was supplying me. I don’t for one second doubt this doesn’t bother her, yet now she’ll have to find someone else willing to spend the x amount (:0) I was paying every time she brought shoes. Again I’m not doubting she will eventually find someone, but rather than adding to her bottom line, she now has to find more clients to keep her bottom line as it is now. But again, I doubt she’ll realise this or care right now.

This is how I feel about other suppliers who no longer enjoy our business – was the disregard for the company worth the loss of business? Perhaps it was worth it for them, but I know that when I’m dealing with my clients I swallow my pride a lot because my bottom line is worth it to me. I want my company to be here not only tomorrow but in 20 odd years and then some.

And when it comes to suppliers, I take the American stance, I simply refuse to deal with terrorists! It is never the intention of good businesses to not pay people or suppliers, sometimes ish beyond your control happens. And happens to all growing businesses. What is important is your word, which is why in situations like this communication is super important. Keeping everyone abreast of the situation helps, though not everyone cares for this, they just want to get paid! But what you going to do?

Then the hard decisions also come in to play. As a business that started really small, (we’re still small, just growing), we got to where we are because of hardwork and determination yes, but also because of the faith other bigger organizations had in us, this is something we’d like to pass on to smaller companies trying to come up. But if they can’t afford to give you the 45 days credit terms we need for cashflow management, does that mean we don’t work with them, and don’t give them the opportunity to grow too?

I guess there are other businesses out there more established, who can give the small businesses coming up the cash they also need to grow. Ultimately as business leaders, we always have to put the needs of the businesses first, regardless of the sacrifice – well, depending on your end goal.