At ZBIN we usually do our best to simplify business, we like to make sure that everyone understands business concepts in simple terms. We believe in making it simple, interesting and informative. So below is a simple analysis of what has happened to date since the introduction of the Bond Notes. We review the advice that we gave you and also update members of what we witness everyday being the people who are on the ground.

When the Bond Note was introduced your favourite business forum did one thing…we encouraged you to embrace it! We encouraged you to embrace the Bond Note and take advantage of the immense opportunities that it provided. Risky stuff from our side isn’t it? What if the prediction turned out to be false? Anyway we can refer you to the forum site archives and search for the post on Bond Notes.

Everyone had fears of the forgettable Bearer Cheque days where everyone suffered heavy losses when our currency lost value. It was therefore normal to expect the worst when the Bond Note was first introduced. Most were sceptical of the new currency despite assurances from the Reserve Bank of Zimbabwe. Most expected the new currency to lose considerable value against the US Dollar within the first few weeks of introduction but 3 months here we are and the Bond is still at par with the USD. We therefore got it right in advising our members to embrace the new currency in the short to medium term.

What gave us confidence to advise members to embrace the Bond?

The first reason is that it was not in the best interest of the Reserve bank to have more Bond in circulation as it was going lead to inflation and instant loss of value of the new currency. Print more Bond recklessly and Mangudya would be out of job. He would create more chaos than to leave the situation as it was. A rather simplistic view and I can see a lot of Economists shaking their heads, but this is the simple logic that we followed. The RBZ prints more Bonds and throw the nation into chaos. So print Bonds recklessly and drive out the USD from circulation (Gresham’s law) and create chaos for yourself and the nation at large guess who will be out of job?

Current Situation

The cash crisis is not far from over although there is marked improvement in cash availability with noticeable short queues at most commercial banks. Long queues only appear during month ends when most people receive their salaries and want to withdraw it.

1)    The Bond is still at par with USD

2)    High USD denominations such as $100 and $50 to have disappeared from circulation with only a few notes being dispenses by commercial banks such as Stanbic.

3)    Lower denomination such as $1 are fast disappearing from circulation leaving the $2 Bond as the only noticeable currency on the streets.

4)    The newly introduced $5 Bond Note is not in wide circulation

5)    Certain banks now require clients to fill out Bond withdrawal forms withdrawing Bonds

6)    Some banks not dispensing Bond Notes from Automated Teller Machines

7)    Money Transfer Agencies such as Western Union giving clients  the 3% incentive

8)    Most companies are failing to access forex approvals from RBZ for imports

9)    Some goods have started disappearing from local supermarkets

10) Price increases of certain goods in supermarkets

So what does the future look like?

Unfortunately we are not able to predict for now, it is not easy as we are going to rely on a number of financial models, research and analysis. We will need a lot of time inorder to once again come back with advice for our forum members.

Recommendation

We would like to urge the RBZ to review the 3% incentive offered to diasporans remitting funds to Zimbabwe. This money is not enough given that most of the funds being remitted range from $30-$500 at a time. Few folks are sending large amounts of money through money transfer agents. Most of the large sums are being send through formal banking systems. The problem with the banking systems is that they are not giving receivers the 3% incentive. This writer received $10,000 some time back in December 2016 on behalf or a relative who wanted to complete a housing project.  I asked my local bank manager whether I was eligible for the 3% incentive, he did not help referring me to the RBZ- i did a couple of follow up and gave up. So this could be happening to a lot of people sending money through formal banking systems.

So we will be back with a prediction of what the future looks like. For now maximise on the availability of the Bond and use the currency responsibly.

So I have this good friend of mine who is based in Durban who runs a Beauty Spa . She contacted me yesterday  telling me that she was over the moon because she had secured funding for her business. A business partner had injected a substantial amount of money(capital) in her business! As a result of the new capital injection, she had secured a bigger space compared to her old operating space. She was also busy carrying out interviews for  3 additional employees who will be starting work next week. So everything is moving at a fast pace and she needed quick business advice from a trusted friend.

Now here is a catch- this friend of mine does not have managerial skills, she had been operating her beauty spa alone and all of a sudden there is a big unexpected expansion  in her business! When I talked to her I could sense that she is happy to realise her dream of expanding however she was afraid of the responsibilities that comes with leading a team of 3 employees. ‘Hanzi handizodeerwe here? Ko vakazviziva kuti its my first time to lead this team? She has confidence issues and its understandable, many entrepreneurs go through this phase.

So with no business management experience what is a quick solution that we are offering to her? I deally i would have liked to take a lot of time in analysing the Beauty Industry in South Africa, Durban competition, trends in the industry, opportunities and risks. I would have lved to analyse her business plan but dear reader, none of this information is available. I have to come up with a quick solution because new employees will be at her premises next week ready to start work. So lets look at some of the quick solutions that we have quickly drafted for her.

1. Have fun, make the work environment an enjoyable one. Clients need to be happy and for this to happen your employees should enjoy their job.
2. Nothing much has changed, she is still the same person, doing what she knows best. She must not panic or put herself under undue pressure. Everything will be fine-she just need a positive mindset and enjoy working with additional staff members.
3. Make sure you have well developed job descriptions for the four of you. Employees should know the organogram, who reports to who. In her case I believe all the new employees will report to her
4. Employees should know their terms of engagement, how much salary each person is expected to get, operating hours, leave conditions etc
5. The vision of the company-what do you stand for? What is your long term vision? New employees should be aware of the history of the company and where you intend to be in the long run.
6. Proper Induction-The new employees will be coming next week so its important that there is a proper induction in place
7. Monthly targets- her fears of managing a new team for the first time are understandable, to help manage this she needs to set monthly targets of performance for the company and each employee. Ideally this should be coming from her business plan. Monthly targets which sets out the number of clients to be attended to, the monthly target of sales
8. Conducting weekly meetings- meetings play an important role in keeping everyone focused and knowing the big picture. They are important for information sharing, target setting and solving operational challenges. The meetings can be held on a weekly basis especially every Monday Morning, you develop a small agenda of targets to be achieved, review progress and discuss any other business.

So in the absence of a business plan, in the absence of a marketing plan-this is our crash business programme to get her going because she is an experienced beautician with a lot of clients, the only area lacking from her side are business leadership skills. We will come up with a detailed business plan for her business which will cover Finance, Human Resources, Marketing, Administration and Business Development.