WHY SMEs DON’T GROW; WHAT TO DO TO GROW YOURS
In our last edition, I shared with readers the opportunities available for growth if you operate an SME – that is small and medium enterprise or even a micro enterprise. However, the central focus was on why SMEs do not grow, especially in the South South region.
About 80% of SMEs in Akwa Ibom state lack basic fundamental principles of business management for success; ranging from having a clear understanding of their business, attitude to work, standard business practice registration of the business with CAC, book keeping, identifying the target audience and what influences the target audience to buy a particular product or service. Let me analyse few key points that SMEs need to address or understand before starting a business:
HAVE A VIABLE BUSINESS IDEA: a viable business idea means you have identified a problem in your environment and have come up with a solution for it which people are willing to pay for it. This idea is further developed by having a business plan around your idea, giving it a detailed pathway in achieving success.
REGISTER THE BUSINESS WITH CAC: Once you have identified a viable business, with potential customers who are willing to pay for your services or products, you need to legalise your business by getting it registered with Corporate Affairs Commission (CAC). Doing so gives your business a legal frame to carry on its operation as an entity and builds people’s trust in you as they see you as a serious business person who is ready to serve customers in a professional and ethical business manner.
CREATE A BUSINESS MODEL FOR YOUR BUSINESS: This is different from the business plan as it focuses on the daily activities you take in achieving the goals set on your business plan. Its helps you streamline your business tasks to the tiniest details, showing how it should be done. It helps you identify opportunities for your business faster; you know who does what in the company and the actual resources you need to achieve your set goals per time and what product or service generates revenue for your company.
FINANCIAL RECORDS, FILING WITH RELEVANT AUTHORITIES: Every entrepreneur needs to “know their numbers” in terms of having deep understanding of their income and expenditure; know your profit margins , how to record daily transactions for proper auditing, when to file taxes, the tax rebates available for you, etc. Knowing your business numbers as an entrepreneur gives you an advantage in spotting any issue with the business early before it gets out of control. Also, it tells you when the business is doing well and which area is bringing in good revenue. It helps you focus more on high profit margin aspects.
BUSINESS ATTITUDE: Wrong business attitude can kill your business potential before you even start. Procrastination is a sure killer of business ideas. Entrepreneurs are proactive in their approach in handling business matters, as a little sleep can cause you loss of fortune. In business, “If you blink, you miss!” It means entrepreneurs must always be business-ready, thinking fast on their feet, otherwise a competitor might out- smart them. You might miss opportunity of a life time just because you didn’t prepare for opportunities that might open doors of success for you.
Having the right attitude in business can be achieved when you understand the value your business brings to people, and how that value can translate into money that will change your life for the better. Being polite to customers, trustworthy and reliable can help you attract and retain customers who will refer more businesses to you.
INVEST IN PERSONAL DEVELOPMENT: Actively learning new ways to grow your business and serve your customers better will help your business survive for a long time and can become a global brand. Leaders are learners, the world is evolving, don’t be static in your knowledge.