Create Systems to Run your Business..Java House Africa

In 2017 the Abraaj investment group paid Java House Africa founder 1.3 billion Kenyan shillings for his stake or shareholding of only 10%. 

If you have ever visited a Java house outlet it's hard to imagine it being valued @ 13 billion Kenyan shillings, I.e if you take the physical value of all Java house outlets including all their other business arms like planet yogurt, and calculate the total physical assets they are not going to add up to not even to 1 billion Kenyan shillings.

So how did a business with assets of roughly a billion get a valuation of 13 billion Kenyan shillings? 

This is how

If you visit any Java house location you are assured of getting the same service, similar decor, and most importantly same food and drinks the same way every time on any day. That's a business system. 

Ever visited a hotel and have a different experience every now and then. If you are in Kenya I definitely think you have, and this is very frustrating.

What the management of Java did so differently is building a business based on a specific system, not people or locations and this makes it easier to scale and manage. With a system-based business, it's the system that determines your growth and worth. As Java sold their business together with selling their physical assets i.e 56 outlets in 2017 their system was the reason why the Abraaj group paid a premium in acquiring them.

So when building a business all aspects are important but creating a system to run the business should be the most important task of the owner/ manager