The evolution of technology has made a lot of businesses think divergently about the best approach to run their business in order to increase profitability and growth. Small businesses are not left out in this advancement, as some have embraced the new technological trends and methodology of doing business. This adoption has helped in the expansion of their business, created employment and hence contributed to the national GDP.
According to the National Bureau of Statistics, small and medium scale enterprises (SMEs) in Nigeria have contributed about 48% of the national GDP in the last five years. With a total number of about 17.4 million, they account for about 50% of industrial jobs and nearly 90% of the manufacturing sector, in terms of number of enterprises.
Furthermore, in 2010 a survey report on SMEs in Nigeria conducted by the NBS in partnership with SMEDAN shows that “The SME sector in Nigeria is strategically positioned to absorb up to 80 percent of jobs, improve per capita income, increase value addition to raw materials supply, improve export earnings, enhance capacity utilisation in key industries and unlock economic expansion and GDP growth”
If SMEs are to thrive and to make more impact to increase employment, contribute to national GDP and encourage export growth, they need to do the following:
1. Business owners need to reorient and reinstill
For SME owner to succeed in business, there is a need to learn, unlearn and relearn. This is because new trends keep emerging and the industry keeps embracing new shifts. This shift can be political, economic and legal which can have a huge impact on their businesses. This goes with the saying that change is constant. According to Woodpecker, “Change is not pleasant, but change is constant. Only when we change and grow, we will see a world we never know”.
Therefore, it is crucial to be alert all the time, and this can be possible with good knowledge of things that can influence your business positively or negatively. Learn to stay current in the happenings of the country and have a great understanding of how your industry is progressing in other countries. You need to seek answers to the following questions: What are these businesses doing right in these countries that is making them flourish? What are the challenges they are facing in their country? How were they able to scale through amidst these challenges? Aside from that, you also need to know the policies introduced by the government of your country on small and medium enterprises and what are the pros and cons of these policies for your business?
The idea is not only about starting a business and boom, millions of naira is already coming in, but it should be, strategies and measures to put in place to sustain your business, increase the RIO and equally skyrocket to a large enterprise in 5-10 years’ time. For all these to be achievable, you as a business owner need to be well informed in your industry.
Gain information that will enable the business to grow. This can be done by reading great books about your industry, staying current on what is happening in your country, and attending conferences and webinars that speak about the business you are into. Acquire more knowledge by taking more courses that align with what you are doing. When it comes to business, founders can’t stop learning no matter how knowledgeable they think they are in the field. Attend business events where you can meet industry specialists. Network and work out areas of collaboration that will aid in the growth of the business.
2. Employ tight and reskill your staff
For any business to grow, there is a need for human resources and as a small business trying to gain ground in the face of investors and potential customers there is a need to employ competent hands that will enable your business to excel. A mistake some SMEs make is employing less proficient employees and this has retarded the growth of their business. Some of them believe they do not have enough resources to pay experts. This very act has impeded the growth of some businesses, making some of them go out of business, while some remained stagnant for years.
Even when you go for the less competent staff, there is a need to upskill them as some of them are always ready to learn. As a small business that is prospecting for great things ahead, it is crucial you invest in your employees. By investing in your employees, you can improve productivity, boost performance, encourage innovation, and improve morale and job satisfaction.
In a situation where there is not enough funds to pay for these trainings, devise other means of barter engagement. That is, providing a service that will benefit some consulting firms and in turn, they train your staff or give them slots to take part in some training they offer. Make sure these trainings are beneficial to the growth of your business and equally to the growth of your staff.
3. Incorporate digital technology
For SMEs to thrive, there is a need to embrace the latest digital trends and tools as this can help SMEs lay the groundwork for progress. These tools will assist them to generate deep client insight that goes beyond their current base. So, SMEs need to build a good knowledge of that.
For your business to prosper you need to incorporate digital tools and equally make use of some digital channels. With the progression of digital and how it helps in ease of doing business, there is need for small businesses to key in, in this development as it will assist in the growth of their businesses. A lot of businesses have drifted from traditional ways of running their business to a more innovative and digital approach. This method has led to massive improvement, yielded faster results, helped in lead generation, maintain good customer relationships, customer management, insight of the website performance, time management, customer feedback, digital marketing, noticeable impact on Goggle and equally helped in the increment of RIO. Some of these digital channels/tools are search engine optimization, content marketing, CRM, hootsuite, Mailchimp, Social Media, Canva etc.
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High Staff/Employee Turnover
Although this isn’t a direct cost for businesses, it is, however, a fundamental problem. On the face of it, the high turnover may seem like a social issue where management is unable to pin down employees for long due to various reasons such as low renumeration, unwillingness to pay salaries at and when due, and an uncondusive working environment, it is a cost associated with inculcating skills and company values into the ever-changing number of employees.