Sunday, February 26, 2023

Who do SMEs really help?

Ever so often we need to take stock of what we do. We often hear of the benefits of SMEs being touted online, but I really need to beg an answer to this question. Who is really benefitting as a result of what has been dubbed entrepreneurship? 

At the micro level, it is a way of helping people develop gainful self-employment, which enables governments to boast about how many jobs were created. However, for those who work within the sector and are observant, it is hard to recognize that the technical assistance entities need to be more holistic in their approaches to SMEs. 

The result is that many entities open and operate as SMEs throughout their entire existence growing to a certain level and no further. The majority function as trading as/general partnerships and those who incorporate are unaware of their strategy for doing so. They also don't have an exit plan that would enable the business to survive beyond their lifetime. 

Too many entities are dependent on the most expensive way of raising capital which is through the banking system and few, if any, really look towards creating equity finance opportunities where investors can participate meaningfully. 

Still others are not up on the information required for good governance and in some cases where to turn to find it. Many entities cannot hire the talent they need on a full time basis and many are concerned that they cannot afford the fees of outsourcing. 

Trainnig should be on-going and many your entrepreneurs fine the pressure of down time being adequate for them to participate in such continuing education. Therefore they drop behind. It is for that reason that those of us who do train must keep updated with technology so as to better provide solutions. 

So does having a SME really help? The answer is really up to those who have benefitted and continue to benefit. 

We need to do better for our entrepreneurs as running a business has a lot of moving parts, and we don't learn them all in business school. 

Keep checking back for more posts or recap some of the older ones on this site. 

Have a great week ahead. 


Friday, February 24, 2023

Crisis mode

 I was recently chatting with a colleague and as we spoke some similarities in the issues we came across were common between our entities. We are finding that clients are staggering within the business environment. The pressures are quite great for many and many are finding the conditions to be overwhelming. 

Well...someone's got to handle it. We can't all run the opposite direction. 

  • Indecision
  • Lack of discipline
  • Poor budgeting 
  • Inadequate planning
  • Disorganizeed 
  • Insufficient preparation
  • Fear of failure 
  • Not enough knowledge 
  • Inexperience 
  • No team 
  • Weak systems 
  • Limited access to financial information, funding, and technical assistance 
  • Undesirable people skills
These are all reasons that businesses experience challenges and these listed are from within. They don't really include factors beyond the skills and abilities of the business that impact externally. 
Can we ever be prepared for the unforeseen? 

As we know, it is virtually unrealistic to expect one person to be on the ball with every aspect of the business. It is for this reason that business functions best when there's a team involved, but you must be selective. 

Who we have on the team is important to the success(es) that the business is likely to encounter. All of these areas can be delved into further should you decide to book a planning session should you need help in these areas. Should we not have the talent in-house, we can connect you with those in our network who have those competencies. Either way, there's always a solution. 

Check back often for updates and read/reread our articles based on your business needs. Have a phenomenal day! 

Monday, February 20, 2023

Understanding business numbers


Across the globe, many have found numbers to be intimidating. I used to think that numbers communicated quite clearly everything except emotion until I saw someone win the lottery or get a fine. 

In business, there's a requirement to have the entity's performance represented in numerical reports called financials. Despite this, the full potential of the information the numbers represent is seldom communicated in whole or understood by the reader. 

This may be one of the reasons why businesses grow to a certain performance level and then stagnate - neither growing nor declining. 

The numbers are able to describe matters pertaining to the following areas:
  • The asset base and the level of liabilities
  • The profitability of the entity
  • Cash flow 
  • The earnings per share 
  • Share value 
  • Units in production 
  • Internal cost controls 
  • Ratio analysis
  • Cost-Volume-Profit Analysis 
  • Forecasting methods
  • Operations budgeting 
  • Cash management 
  • Capital budgeting 
  • Tax planning
The bulk of these elements seldom forms a part of the discussion at yearly AGMs/management meetings if they are held. 

In short, we leave money on the table, even when professionals are paid to guide us through the process. These numbers can and should be used as a means for setting goals and then reviewing to see how close we have come to realising them. 

It is time to stop playing business and get the necessary professionals on your team to help you navigate what you don't know. No one knows everything. Some of the best use of the business' resources is to invest in the use of professionals to which you have access to enable you to make and save your business' money. Too many people are seeking to do business on the cheap, which isn't budgeting by any stretch of the imagination. 

If you don't understand some of the areas listed above, then please seek out your professionals to enable you to obtain clarity. Learn how to make the numbers of your business work for your benefit. 

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