Five things SME’s need to be thinking about in 2018
In 2018, small-to-medium-sized enterprises (SME’s) will be looking for a glimpse of inspiration to chart a new growth path and scale their businesses. This is off the back of a tough 2017 and previous years which have inhibited the growth of local SMEs.
FNB Head of SME, Sam Ikela says “Small business’ success has become a monumental task when there’s arguably very little to no real economic growth overall. However, every challenge presents an opportunity and in Namibia, not only are we fortunate to consistently have SME development as a key objective on the national government agenda, but many corporate institutions are also willing to contribute to the growth of small businesses through means of its procurement policies.”
Furthermore, as 2018 begins in earnest, there are some important insights business owners should consider with regard to growing their businesses, Mr. Ikela shared.
· Digital economy taking centre stage/ Economic digitalization –Across the globe, consumers and businesses are rapidly migrating services to digital channels for its sheer efficiency, convenience and scalability. Thus, small businesses are encouraged to adapt to a digital style in its operations or risk being outperformed by competitors who have identified technology as sheer growth in the twenty-first century.
This may include a few basic elements such as digitising accounting processes with software; using social media as a platform to campaign to and reach customers. Additionally, when unsure where to start, start by observing your customers and listening carefully to how they expect experience with a business like yours – you can’t go wrong by putting yourself in your customers’ position and then reflect on your business through their eyes.
· Expect little to no help from the economy – The Namibian economic forecast for 2018 indicates an estimated growth of 2.5%. This is a fairly firm indicator that SME’s will have to do the hard yards to engineer any form of business growth. The focus should thus mainly be on differentiating your business, products or services compared to competitors through marketing or even innovation if possible.
· Maximise your banking relationship – Banks are investing a lot of time to understand the needs of businesses and have some of the tools to help SME’s run efficiently. The relationship should not only be limited to just banking. With the multitude of rewards and value-add services offering by most banks, with just a bit of time spent understanding the offerings, great value can be derived for you and your business. Examples of these offered by FNB include the newly launched Rewards programme, electronic banking options, if used properly – come with minimal service fees and the special SME Fund which aims at assisting SME’s on a variety of levels, not only financially.
· ‘Think Local, Act Global’ – Your business may be based in Namibia but its potential to scale shouldn’t be hampered by your location. In other words, be open to the opportunity of growing your business beyond the Namibian borders, especially if your service or product has universal appeal and relevance. With global marketplaces such as Alibaba and AirBnB, the world market has never been more accessible and easier to do business with.
· Avoid the race to the bottom – Market forces continue to show that consumers aren’t only focused on the cheapest product or service despite the tough economic conditions. These days offering great service will build trust and loyalty with customers and keep them coming back. If you combine this with good quality, accessible products and services you will generally have an edge over your competitors offering the same or similar products and services.
“Even though 2018 is unlikely to come with an SME development boom, a solid homegrown business can still grow substantially. More than ever, business owners need to arm themselves with as much information and insights as they can to grow their businesses or even reduce the risk of total business failure. With Namibia’s level of unemployment showing little to no signs of reduction, we need to sustain the spotlight on growing our SME sector and offering as much support to it as possible. SME’s represent one of the most effective ways to create employment in local communities, especially if these businesses find ways to trade with customers beyond their normal operating territories.” says Sam.