Sustaining and growing your small business; the power of positive thinking

The law of positive thinking and attraction advocates the use of positive thoughts, intuition and self belief to attract one’s desired circumstances. It follows then that small business owners must de-emphasize challenges and limitations and begin to conceptualize the big businesses of their dreams and the process(es) of bringing these concepts to fruition. Challenges abound in running a successful business venture, but challenging situations have been known, over time, to carry with them several pockets of growth opportunities; opportunities that are most often found in positivity.

Some of the challenges which usually limit the growth of small business owners, especially in Nigeria, bother around start-up, funding, lack of innovative business ideas, lack of adequate managerial skills resulting majorly to staffing and employee retention issues and poorly structured business processes. These are all surmountable challenges and must not be perceived as impediments to the growth of any small business.

Start-up issues

Before starting a new business, it is important to have the right motive in place. Getting into business for the wrong reasons may be the beginning of a long term limitation. A prospective business owner should be self aware of his own strengths, be passionate about the business he/she is venturing into, have very good transferable skills, conceive a long term vision and mission for his/her business venture and have his/her ideas documented in a solid business plan. Issues that must be considered within the business plan include business registration or incorporation status i.e. sole proprietorship, partnership, limited liability company etc. (the vision for the business should drive the choice of the business vehicle), the business activity, cash flow projections, funding, branding strategies, business culture, ethics, corporate governance, applicable taxes, strategies for proper insititution of internal business processes such as information technology supports, marketing/sales, human resource, finance, procurement, logistics, productions etc.  The Good Book says that a house built on a solid foundation does not fall.

Funding 

Every business requires funding to survive. In fact, without funds (no matter how little) a business venture cannot kick off. Even the business of consulting where human capital is the initial investment requires some level of funding to kick off. Before venturing into business therefore, the prospective business owner should have the funds in place at least for a lean start up. 

Funds for the continuity of any existing business can be raised internally or externally. If the right business structure is in place to drive revenue growth, soon enough, capital invested can be turned around as profits to provide internal funding for the business. Unfortunately, no investor would like to invest in an unprofitable venture, therefore, to also have access to external funds, a business owner(s) must be seen to be making the best of his/her own personal investments in the business. In other words, the business must be perceived to be profitably run and managed.

There are different sources of external financing for small businesses in Nigeria. The Central bank of Nigeria (CBN) has been particularly interested in providing avenues for funding small businesses. From May 2010, CBN approved N500billion debenture stock to be issued by Bank of Industry (BOI), N200billion of which was meant for providing funding for small businesses and the manufacturing sector. Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), a co-operative society for small businesses also have supportive structures for small business growth in place. Federal Mortgage Bank, Diamond Bank, Fidelity Bank and other deposit money banks have different initiatives in place to aid small business growth and to provide small business funding. One main prerequisite to assessing funds however, through any of the aforementioned avenues is the availability of a properly documented and viable business plan. 

It follows then that the lack of sources of funding is not the real problem as is generally portrayed but perhaps the lack of requisite entrepreneural capabilities. Entrepreneural and business management skills can be acquired and honed through constant participation in training programs. Many of the small business support initiatives also offer training on how to conceptualize and draw up viable business plans.

Innovative business ideas

It is a presupposition that the lack of conformity that usually drives business owners into business in the first place would guarantee their ability to create things different from the norm. But we still find some businesses seeming to ‘follow the bandwagon’ and reacting only to competition. The ability to stand out from the crowd and create a niche for oneself in one’s own unique area of strength is very important for success. Creativity is essential for staying ahead of trends in planning the business products, outlook, branding, marketing and sales materials/avenues and importantly, in managing scarce human and material resources. 

Staffing and employee retention issues

At start up, business owners are constrained to manage very lean resources. Most times they find themselves playing multiple roles – chief executive officer, marketing and sales director, sales assistant, chief operating officer, finance manager, human resource officer, IT manager, graphic designer etc. Humans are intelligent beings and can aquire/apply multiple skills but the truth is that a ‘one man’ business would always assume the size and capabilities of one person. Unless one’s vision is to remain as an independent businessman, continuing this kind of structure when the business can afford good employees to run its business processes would be detrimental to business growth. 

The ability to deal with, influence and communicate with people is very important for a business owner to attract and retain the right set of human resources necessary for business growth. A self aware business owner should understand his or her strengths and if this is not one of them, should imperatively hire someone to complement him/her in this area. It is also expected that every business owner should continuously improve himself or herself by investing in leadership training courses. Secondly, business owners must be willing to maintain a significant budget for their human capital, and hire the right set of people to run the different functions within the business. Spending petty amounts on cheap labour would only guarantee cheap returns and additional headaches for the business owner. Thirdly, the benefits of employing the services of professional advisers to provide professional opinion on this and all the other critical process areas cannot be overemphasized. These are worthwhile investments for the continued growth of any business. 

Pooly structured business processes

The quality of the internal process structure of every business directly determines its growth. Business owners must strive to put in place formidable structures around core business processes such as product development, information technology supports, marketing and sales, finance, procurement and logistics, corporate communications, talent management etc. Process documents (or policy and procedure manuals) for all the critical process areas should be put in place for uniform compliance and be updated occassionally to align with international best practices. In fact, it is important that from day one, the culture and practices of every growth aspiring business should mirror those of the big organizations since that is the desired ultimate destination of every small business . 

The finance function, specifically, usually receives little attention from small business owners. Often, a small business owner fails to draw a line between his or her personal expenses from his or her personal bank account and the business expenses from both the personal bank account and the business’ bank account. Secondly, books of accounts are neither kept nor are periodic financial reports made available to capture the assets, liabilities and financial performance of the business at a glance. The business owner(s) is often found to be figuring everything out in his or her mind. Taxes are neither planned nor remitted, and sometimes sensitive expenses such as employees’ salaries are made in cash!

Experienced employees or professional service providers should be engaged to provide book-keeping, accounting, financial reporting, treasury management, fixed assets management, account receivable and payable management, tax planning, advisory and compliance, internal controls design and financial reporting services. When these are in place, the benefits usually outweigh the costs which are most times, upon enquiries, very affordable.

Another critical business process which when properly structured, brings with it high potentials for business growth is corporate communications. This includes branding and brand perceptions, marketing, corporate social responsibility/ volunteer assignments, management communications, employee communications, etc. The business needs to define the kind of perception it wishes to engender in the minds of its stakeholders and general observers. A beautifully designed and functional website, emails and email marketing, effective marketing materials and advertorials, social media leverage, blogs and publications, effective business proposals, volunteer works etc. can help position an otherwise small business in the limelight. Corporate communications consultants can also assist the business a great deal in this regard.

Many Government agencies, regulatory agencies, banks, co-operative societies and associations, including the National Association of Small and Medium Scale Entities (NASME) and several large organisations (in perfomance of their corporate social responsibilities) have put measures in place, and run several programmes to encourage the growth of small businesses. A small business owner can always tap into any of these supportive schemes in working towards the sustenance and growth of his or her small business.