Chiedu Okonta
Chiedu Okonta, FCA, MBA (LBS), BSc accounting, a professional banker and an experienced Corporate Governance expert, is the chief executive officer of Rivergate Onyx Investment Limited, and the author of two books, Keys to Sustainable SMEs and Stamp Out Fraud From Your System. He can be reached on +234 (0) 907 9103 248; and chieduokonta1@gmail.com (texts/chats/email only)
Every great business in the world today started at some point as a small or medium establishment. There are fundamental principles required for a solid foundation of an SME, which have been the major success factors of many businesses that have transformed from SMEs to long lasting global giants, of which these key factors are as follows:
Foundation
- Distinguishing between the business and the owner/proprietor: This is a process where every business decision in respect of the entity should be based absolutely on the overall best interest of the organisation. This principle should apply to all areas of the business, including, but not limited to: choice of products/services; choice of suppliers, choice of business locations, staff recruitment, remuneration, discipline, expenditure management, management of the business resources, investment decisions, pricing decisions, among others. This is one of the most vital requirements for business sustainability.
- Documented vision, mission, & policies
- There must be a documented clear vision and mission of the business. It does not have to be sophisticated. While the vision should point everyone to the destination of the business; the mission provides the direction or ‘the how’ to get there.
- Policies: Each SME expecting to build sustainable growth ought to have its policies, which are the set of rules that must guide every action, every process and every member of the business. This is quite important to eliminate subjectivity and arbitrary handling of issues. It promotes standardisation and objectivity in arriving at decisions affecting every aspect of the business. The policy statement must cover every key aspect of the business. Broadly speaking, it should include: Human resources issues; expenditure issues, key areas of the business, operational issues’ accounting issues and corporate governance issues.
- Communication: It should not just end at having the visions, missions and policies for the organisation, there must be clear and proper communication of such information, to all concerned. There must be a deliberate attempt to enforce the implementation of the vision, missions and policies, among all the stakeholders. In particular, there should be the willingness and readiness to enforce its application at all levels, with applicable consequence management for non-compliance.
- The key product or services for the SME
- Our choice of product or service to offer to our customers, to a large extent, will determine the extent of our business patronage. The choice of the product or service to render must seek to satisfy the compelling needs of the people at your disposal. This is so important, because it is naturally irritating to anyone being forced to buy what he/she does not need. We need to bear in mind that products/services demanded at one location may differ from one location to another, and from time to time.
- The product/service should be the type required by customers
- Non-seasonal products/services are preferred for SMEs sustainable growth
- It should be a product/service people buy and pay for immediately.
- Finally, it is better to have a product that attracts more customers than you can serve!
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