INTRODUCTION: SMALL BUSINESS GROWTH
An unstable economy is unfavorable for small business growth; a situation that compels them to search for better alternatives to boost profit. Owners of small businesses sustain themselves with the income generated from their business despite the modest capital and low turnover. This income stability is disrupted when there is trouble in the Nation’s economy.
Small businesses are hard hit because they have to compete alongside already established bigger ones. As a result they need to study and understand the economy so as to apply solutions that will support their drive for business growth.
UNSTABLE ECONOMY: SIGNS OF TROUBLE
An unstable economy spells doom and affects our finances negatively either directly or indirectly if left unchecked. Some regard this impact as natural, supernatural, spiritual, diabolic, internal or external but whatever it is; we have to confront it.
Depletion of foreign reserve and crash in price of oil are indicators of a challenging business climate. The impact is endless especially if the situation persist for long without solution.
UNSTABLE ECONOMY: RIPPLE EFFECTGovernment spendingReduction in spending for provision of basic infrastructures and amenities. Suspension of new contracts and inability to pay for executed ones and non maintenance of existing structures. Budget DeficitGovernment spending exceeds the dwindling revenue as a result of much reliance on proceeds from a single product. SubsidiesAs trouble persists Government removes subsidies and support to key sectors of the economy. Citizens are yet to recover from the disruption created by the removal of fuel subsidy. Scarcity of Money The reduction in Government spending reduces the amount of money in circulation. People are forced to adjust their spending and businesses begin to sense trouble. Jobs and SalaryIn a troubled economy there are usually reductions, delays or non payment of salaries. A lot of job cut, unemployment, and mass redundancy as companies struggle to stay afloat. Over production/under production Businesses are unable to sell what they produce leading to over production and under production due to lack of raw materials. Currency devaluationThe Naira adjusted itself due to the unprecedented depreciation even before Government pronouncement of devaluation. We all know there is problem for we see Dollar being sold as high as N400 plus. This has greatly affected prices since we depend on imports for our raw materials. Uncontrollable InflationNigerian economy is a peculiar one. In a normal economy inflation arises when you have excess money and fewer products. However ours is a case of abundant products which people cannot afford due to limited resources. Reduction in standard of living The devalued currency has greatly affected the purchasing power of the public hence decrease in standard of living.
SMALL BUSINESS GROWTH: CONDITIONS FOR SURVIVAL
- Commitment- Business growth demands harder work.
Ecclesiastes 11:6 Go to work in the morning and stick to it until evening without watching the clock. You never know from moment to moment how your work will turn out in the end. (MSG)
- Vision- foresight and goals should be in place.
- Determination- unwavering in achieving your goal.
- Focused- don’t allow or listen to distraction.
- Resilient – not deterred by past setbacks. Ready to try again
WAY FORWARD FOR SMALL BUSINESS OWNERS
Reassess your original business plan
Evaluate your priorities and review budgets, marketing and sales plan to fit to the current business climate.
Every penny you save will improve your chances of survival therefore it is wise to review your costs. Eliminate the non essentials and negotiate the essentials to reduce some costs.
Some recurrent expenses adds no value to business turnover but could improve profit if eliminated. Costs like DSTV subscription is not a must for every business, it is an expense that can be dispensed with.
Review utility costs, rents and negotiate for reduction in price from your suppliers. If your line of business is not 100% dependent on power like hairdressing salon then use fuel only when it is very crucial. Use the cheapest mode of transportation to save cost and also monitor official trips by employees.
Explore new products
When there is recession people will seek for best alternatives that are cheaper and still meet their needs. Introduce good and cheaper costume jewellery if you are into expensive jewellery so as to retain your customers.
Take advantage of what you already have by adding new line that goes with what you are doing presently without the need for new structures.
Provide Quality products/service
Let people get value to justify their expenditure with you. I shop for foil papers of recent but purchased some cheaper brands so I could save some cost. During usage I discovered they were of bad quality and unusable hence not worth the price. It is pointless buying from such companies rather it is better to stick to a reliable expensive brand that gives value.
Some small businesses suffer low patronage not because of the recession but for offering low quality products. Maintain a standard for good quality and customers will buy if you are consistent and credible.
Increase your brand
It is not easy to survive on just a product line in an unstable economy. Increase the brand you are known for by introducing complementary products. In that way you will get customers to spend more when they visit and this will boost your small business growth.
Advertise and Increase your marketing
Small business need to seek for new customers outside their present location to sustain growth. This is achievable through advertising and marketing at minimal cost. The internet has made more opportunities available for small business growth. Utilise these various platforms like facebook, whatsapp and online store to increase sales. Contact me for more information on this.
Effective Money Management
Maximise the use of liquid funds and learn to save and plough back. Well managed savings ploughed back into the business will pave way for growth.
Avoid new credits and stop the use of borrowings that are not extremely important including hire purchase or buying now to pay later.
Commit your plans to God
You can experience God’s gracious hand when you are in tune with Him and you totally surrender the situation to Him. At a time like this when people are saying there is a casting down you can experience a lifting. He is the one that can order your steps and thoughts to the place of abundance.
The people that know their God are still making it big despite the tough economy. Principles will work very well when God’s blessing is upon it. There was famine in the land but Isaac sowed and reaped great profit.
Economic downturn is not static for after some time it will be over; therefore be prepared to confront and overcome the challenges and threats it poses.
Don’t allow some of the setbacks to your business discourage you from making new attempts.Isaiah 43:18-19 The Lord says, “Forget what happened before, and do not think about the past. Look at the new thing I am going to do. It is already happening. Don’t you see it? I will make a road in the desert and rivers in the dry land. (NCV)
Aside this present recession small business growth may be hindered by a period of dryness that occurs in an economy. It is always good to prepare for the future spiritually, emotionally, mentally; financially and physically.
Don’t depend on just one source of income for small business growth as the more you have on hand the more you can request for God’s blessings.
Ecclesiastes 11:1-2 Invest what you have, because after a while you will get a return. Invest what you have in several different businesses, because you don’t know what disasters might happen. (NCV)
A prepared person will not fall victim twice.
There is more to what a business requires for growth. I challenge you to evaluate your business and sift out ares that have not be adding to your bottom line.
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