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Opinion - Navigating small businesses in tough economic times

2022-09-16  Josef Kefas Sheehama

Opinion - Navigating small businesses in tough economic times

In these tough economic times, it is important for small business owners to reassess what they are doing to protect their businesses from burglary, robbery, shoplifting and fraud. 

Crime can disrupt profits and destroy employee morale for larger companies, but one criminal act can be enough to devastate a small business. The potential for loss of revenue and merchandise can be overwhelming and crimes like robbery pose a serious threat to customer and employee safety. Uncertainty can be a blessing in disguise, as it offers opportunities for businesses to reimagine their strategies, business models, and operating models to gain competitive advantage and propel growth in customer share. The global disruption brought on by Covid-19 and the Russia-Ukraine conflict caused most businesses to face a level of uncertainty they had never accounted for, putting them, and particularly startups, in a unique position. On one hand, startups can be more agile than their larger and heavier corporate counterparts, yet on the other hand, they often lack the deep pockets, experience, and resources needed to make power moves, especially during tough times. 

The ailing Namibian economy, exasperated by rising government debt and the weakening Namibia Dollar, poses a unique set of challenges for small and upcoming businesses. We have also seen in the last few years the number of Namibians interested in starting a business has halved since 2014. However, trying economic conditions don’t necessarily mean a death sentence for smaller companies. The economic growth in Namibia has slowed down, and the inflation rate, interest rate, crime and unemployment figures remain ominously high. While this kind of economic climate is challenging for businesses, particularly small and medium-sized enterprises (SMEs), there are many measures that entrepreneurs can implement to survive these tough times. Small businesses should review all their processes and operations to ensure that they are achieving maximum efficiency.

 While expense management is essential for survival, entrepreneurs need to look at the situation strategically, rather than just cut expenses, ask themselves how the process by which their service or product is produced can be streamlined. 

Furthermore, even in a stable economic environment, they are prone to financial instability because the business model is not yet typically concrete, and funding could be dependent on investors and capital ventures. Having a playbook to navigate the business landscape is crucial for startups and can help them either sink or swim when uncertainty reveals itself. At the best of times, it is unwise for an SME to sell its goods on credit if it cannot afford to do so. Most smaller businesses can’t afford to finance their customers due to a lack of funding. Offering credit adds to the risk profile of the business. It loads an administrative burden that costs money and there is always the possibility of bad debts. Small business owners should seriously consider whether to offer credit and not merely offer terms to get the business. These hard-hitting times give entrepreneurs a reason to relook at their business model and find out where there is wastage. This is also the perfect time to identify newfound gaps in their areas of expertise, turning tough times into an opportunity.

Furthermore, networking during an economic downturn can be useful to understand how other businesses are coping. You may also discover new opportunities, customers, staff, suppliers, and business partners with minimal cost to your business. Focusing on your core work and core competencies can be a good idea too. 

If one of your core competencies is your customer service level, then you need to make sure that you’re doing a good job with it. That can take your business above and beyond competitors, especially at a time when everyone is struggling. The contrary is true that fear and frustration top the list as small business owners struggle to plan in the face of a lot of unknowns. Being mindful of your thoughts can be helpful in managing your emotions during times of uncertainty. Mindfulness of thoughts is letting thoughts come and go. One of the most important things to realise is that your business is unique. 

No one knows your business better than you, and there may be other ideas that work for you. It’s a bitter pill to swallow and will be for some time to come because there simply is no proverbial silver bullet. But if you are prepared to make the difficult and painful radical decisions, there may be some light at the end of this long, dark tunnel.

Therefore, my suggestion is to advise that, as an entrepreneur, your time is critical and even more so during a hard time. By freeing up your time to focus on growth strategies, you will be able to adapt quickly to market conditions. Another problem entrepreneurs have in common today is that they fail to delegate. If you find yourself holding onto tasks that can be done by someone else in your business, hand them over and do it soon. When you do delegate, make sure the person is up to the task, knows what is expected, and has the authority to complete the task. If you are going to delegate, do it in the right way avoiding the boomerang effect. If you have the right people in place who work well as a team, they will be able to help you manage and implement your strategy for winning in a tough economy. If you are having any problems with your people, focus on getting them sorted before it hinders your business any further. This means you have more time to focus on growing your business and seeking new ways to win in a competitive and tough business climate.

In conclusion, a tough economy does not always spell bad news for businesses. The strategies you need for survival during tough times are not dissimilar to business as usual, but they should be applied with a laser sharp focus.

2022-09-16  Josef Kefas Sheehama

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