Deadly mistakes micro, small and medium enterprises make

06 Nov, 2022 - 00:11 0 Views
Deadly mistakes micro, small and medium enterprises make

The Sunday Mail

Entrepreneurship Matters
Dr Kudzanai Vere

The greatest mistake in this sector is lack of entry restrictions. There is no mechanism to bar people who are not competent enough to run businesses.

Anyone who feels they want to start a business can just wake up and start one. There is no vetting for competence and character.

For many, it is predominately a trial-and-error venture. As a result, the sector is characterised by a high rate of failure.

In light of this, there are clear business mistakes that must be addressed in the event that one wants to venture into business. We all start small but how we start determines how far we will go.

Failure to plan

When it comes to business, planning must be intentional and visible. For a business plan to succeed, it should grow out of the mind and be written somewhere, where it is religiously followed.

We have a problem with people who, after reading this article about planning, go back to their businesses and write something on paper ,which they will eventually forget about.

Operating without systems

Every surviving business has a life, and like any other living thing, there must be a built-in system that sustains the life in it. A business has components that speak to each other every now and then, and such integration and constant communication need to be structured and somehow regulated by a system.

A business system is a set of defined principles, practices and procedures that are applied to specific activities to achieve a specific result. This, therefore, means you can have a number of systems for the various areas of your business.

However, these systems have a way of coordinating towards the bigger organisational objective. Business systems bring greater efficiency and consistency in the processes, which will ultimately have a bearing on business growth.

Lack of financial records

In business, every financial transaction must be recorded. This recording issue is foreign to most small and medium enterprises. You teach them today, and they do it for a month. The following month, they are back to their no-records mode. Financial records are basically documents that provide evidence of business transactions.

Our brains cannot capture everything in our business, hence the need to keep financial records. In the absence of these records, one would not know how the business is performing and, as such, chances of sinking are high as there is no dashboard to show the status of the business in financial terms.

Financial records are the ones that are used to come up with the financial statements of an organisation. Since the records are used to produce financial statements, they must be accurate and up to date to avoid misleading people.

Lack of training

The moment you stop learning in a certain area, you will eventually become a bad performer in that field. For growth and sustainability in business, learning should be constant.

Everyone within the organisation must have some plan to improve and upgrade their mental software so as to align it to the ever-changing customer demands.

Customers’ expectations and demands always change. Even tastes and preferences do change. Businesses must always be on the lookout for improvements in the way they do business, otherwise they will be overtaken by events and become irrelevant.

Spending before investing

This is the major cancer within most SMEs. The business owners lead a showy life, yet the resources would not be permitting.

A business must be left to grow. Plough back into the business as much as possible, especially in its early stages. We are quick to change lifestyles and even friends once we start a business.

The biggest challenge that causes such behaviour is failing to understand that a business once incorporated does not have relatives.

Even those that are not registered should be treated as such. We have to learn to separate personal money and company cash.  Such level of financial discipline can cure this illness.

Conclusion

Be encouraged to follow the basic business principles and desist from attitudes and behaviours that play against your growth efforts in business.

Every business has growth potential.

We are the main contributors of what our businesses are today.

The writer, Dr Kudzanai Vere is the group CEO of Kudfort Holdings which has Tengesa Online as one of its subsidiaries. This SBU has recently developed two revolutionary applications that will transform the business space in Zimbabwe and the majority of businesses have fallen in love with them, these are Zimotoka and PBNI. They are already on Playstore and Appstore.

 

Contact Dr Vere on +263719592232 or email [email protected]

 

 

Share This:

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds