It is frequently said that new businesses and Small and medium-sized enterprises (SMEs) are the backbone of every economy especially in developing countries. This assertion is true. SMEs have over the years powered economic growth, innovation and more significantly job creation. According towww.statsghana.gov.gh -SMEs lead job creation, with a 71% share of workforce. This is encouraging development but there is an alarming issue that needs to be rectified to ensure new businesses and SMEs are sustained for greater good of the Ghanaian economy.
U.S Small Business Administration (SBA) reports that, 50% of new businesses collapse during the first five years and 66% during the first 10. The SBA goes on to state that only 25% make it to 15 years or more. In Ghana, according to the Minister for Business Development, Ibrahim Awal Mohammed, 75% of businesses in Ghana fail within first three years and those businesses that are able to exceed three years do not go beyond 10 years.
These businesses that fail, hitherto, were great and promising but what caused the sudden change in the story?
There are lot of factors that account for this trend and phenomenon but I think the major cause is founders and/or CEOs trying to do all by themselves when these businesses are created. There is no doubt about the intelligence and expertise of people who invent or create something different from the status quo but no one in this world can do it all alone.
Founders and CEOs have to focus on what they do best and leave other aspects of the business’ efficiency to technical and competent agencies or individuals to handle them. There are great bodies and organisationsthat have expertise in providing business improvement services for businesses across Africa. Founders and CEOs should start looking at investing, prudently, grants/awards won, loans and internally generated funds in their businesses by engaging the services of some of these organisations to help steer their businesses to the promise land.
Business Diagnostics, Hiring Solution, Market research, Market Entry and Scoping, and Leadership and Management Training are examples of services businesses should invest in for their growth and sustainability. Business Diagnostics help to identify flaws and strengths of a business and opportunities that could be pursued, Hiring solution assists in identifying talented and technically sound persons to occupy vacant positions in businesses, Market research gives information on trends and dynamics in target market of businesses and market entry and scoping provide all the information and strategies a business will need before entering a new market.
As we call on all and sundry to contribute to creating a favourable system and terrain for businesses in Ghana and Africa to prosper, business owners can help rewrite the story by investing the funds they have in their businesses. This is the only way we can break the deadlock.