As it appeared in the Daily Nation on March 13th, 2018
Small and medium sized enterprises (SMEs) play a pivotal role in driving social economic well-being. Locally, SMEs provide a livelihood to millions of Kenyans. Globally, they are a force to reckon. While some SMEs have matured into large corporates others have chosen or have been forced to remain small or medium sized. In my work over the last 9 years, I have supported a number of SMEs at different stages of growth. In addition, I have taken a keener interest in the sector as a whole. There is no doubt that many SMEs are ailing. What is ailing our SMEs and what can be done about it?
While a few ailing SMEs may know that they are unwell, many might not even know that they are ailing or what is causing their poor health. While some are ready for a full diagnosis, most consider their ailments the status quo. Others are happy to keep treating the symptoms. However, many SMEs wallow in their ailments, some surviving the different phases while others fade away. As I have interacted with SMEs, I have observed many areas where they need to up their game. Many are struggling with almost every facet of business. I have observed leadership deficiencies, imprudent financial management, lack of a clear market positioning, poor quality products/services, mismanaged customer acquisitions, poor customer relationships, nonexistence of staff development, lack of innovativeness, and mishandling growth among other vulnerabilities afflicting our SMEs.
Considerable time, effort, and resources goes into building any kind of enterprise. Most of those that have established SMEs across the sectors have done much to get them off the ground. Some SMEs are in manufacturing, others in agriculture, trading, export while others are purely in service provision. Irrespective of the sector, to keep SMEs moving forward, owners need to address the issues ailing them. While the flaws in SMEs may feel overwhelming, I believe that they can be addressed. This needs to be done systematically. A first step should be prioritizing the areas of focus that would yield the most results. The question of what do we do first must be succinctly addressed. Do we first develop leaders, nurture the people, focus on customers, sell more, streamline our processes or do we fix several areas concurrently?
To address issues afflicting them, SMEs need to be more honest with themselves. The business owners know best what limitations are holding them back. From my experience, developing the leadership ability of the owners and the managers in SMES always seems to have the greatest impact. When the leadership is improved and enlightened, it becomes easier to make a better diagnosis of the business and to mend areas that need urgent fixing and identify those that need more long-term attention.
I have no doubt that many SMEs would survive and thrive if more consideration is paid to their ailments and corrective action take. While more exploration is needed to uncover what has made some SMEs in Kenya excel and others fail, action to deal with the too obvious ailments is very pressing. What will you do this year to strengthen your SME?
Lucy Kiruthu is a Management Consultant and Trainer connect via twitter @KiruthuLucy