Private sector growth across Africa is steadily rising with Small and Medium sized firms leading the way. We now see more and more African entrepreneurs diversifying business strategies, introducing innovative technologies and finding solutions that contributes immensely to the age old challenges of health, food security, energy and waste management, in as much as it contributes to economic growth.
The World Bank global economic prospects 2018 estimates growth in Sub-Saharan Africa at 3.7 percent by 2020 with non-resource intensive countries expanding at a solid pace. Private sector growth forecasts for Côte d’Ivoire, Senegal, Ethiopia, Tanzania, and Kenya is at 7.2, 6.9, 8.2, 6.8, and 5.5 percent respectively for 2018, as inflation eases.
From the forecast, you can see private sector growth projections is a fast paced phenomenon sweeping across africa. With the recent increase in some commodity prices on the world market , the growth trend is expected to continue in an upward manner. So it makes a lot of sense for firms in the Liberian domestic private sector, especially Liberian owned firms to begin structuring or restructuring their business strategies, policies and practices in order to become more competitive and get on board the growth train.
However it may be very difficult for your business to grow if you are still doing any of these five things:
1. Your business is not formalized
A formalized business is one that has a valid business registration license from the Liberia Business Registry (LBR), an article of incorporation, and a valid tax clearance from the Liberia Revenue Authority (LRA). If the business does not have the above mentioned documents, it is considered an informal business.
Additionally, a formalized business has a business plan that clearly states what the business idea is, how the idea will earn return on investments and what steps are needed to be taken in order to implement the plan.
I cannot overemphasize the importance of registering your business and having a standard business plan if you want to experience significant growth in your business.
For instance, the government under the Small Business Empowerment act, allows 25% local procurement for goods and services. But without a valid business registration and tax clearance, your business cannot bid for contract from the government. These requirements are similar for NGO and private institutions that subcontract services.
Also, to access finance, you need to have a written business plan, and in some cases a project proposal that states how the money will be spent and what will be the return on investment. It is difficult if not impossible to access finance for a business that does not have directions, goals or significant milestones.
If your business is not registered, click here to register it. If you have not written a business plan, here is an easy format developed by the Business Start-up Center to help you get started.
2.Your service is inconsistent
Customer service is “the degree of assistance and courtesy granted those who patronize a business” says Entrepreneur.com. So consistent service means that a customer is expected to receive the same service everytime they interact with your business. The frequency of said action leads to reliability. Reliability leads to customer satisfaction, hence loyalty.
The fastest way to turn customers away is by thinking that people buy your product because: a) you are doing the customer a favor by running such business, or b) they can’t get similar product anywhere else.
Wrong! Bad service will most definitely ruin your reputation and turn great business away.
Customers patronize your business first, because of the product and second, because of the service. More than that, a business that maintains a consistent product and service despite the fact that it doesn’t have the best product on the market has the potential to maintain its customers as compared with a business that has great products but bad customer service. Product and service consistency is very important for brand development and overall business growth. When people buy a product, they expect to receive the same quality everytime they interact with your business.
I’ve found this concept to be a serious challenge among small businesses in Liberia. Businesses are unable to maintain consistency in product and service delivery.
A typical scenario that most Liberians can relate to looks like this: A new restaurant opens, people are drawn by the food, the ambience and the service. After a month of operation, the food either starts to taste different or reduces in quantity. Overtime, customers stop visiting the business and you soon hear of the next hot spot in town. Another issue is the time factor. Your selling point for the business is the fact that you open early, say 8:00 am, but when customers show up at 8:00 am, you say “we’re just opening”. This is a huge turnoff for customers.
A business must focus on improving service and delivering it consistently. Customers expect to receive the same service at the same time and in the same way you promise to deliver. Your business will experience tremendous growth, once you master this concept.
3. Your employees are poorly compensated
In Liberia, finding great talent is a challenge. Small Businesses compete with literally everyone – the government, Large businesses and other private sector institutions – for talent.
In most cases, the employees have to be trained to perform the tasks that your business requires and this costs money. On the one end, if the employees are not trained properly, it affects the productivity and service delivery of the business. On the other end, if the employees are not compensated properly they will soon leave your business in search of better opportunities.
Employees are the backbone of your business; without them your business cannot run effectively. This concept cannot be overstated. If you don’t compensate them properly, you end up spending more on hiring and training new employees than you do improving your service. Experts say, “train your employees so that they can leave your company, but treat them well so that they won’t”.
4. You are ignoring the competition
Ignoring your competition is a quick way to get kicked out of business.
You need to know who your competitors are and you need to know what they are doing in the market. With this information, you are better informed when creating new products, setting prices and developing marketing campaigns. Knowing who your competitors are can help you strategically position yourself in the market.
Invest in market research to understand how the needs of your customers are changing and how to respond effectively. Ask customers for feedback or better yet send out survey forms to collect information about your current customers needs and preferences. More to this, spend time studying your competitors – understand their strategies and how they interact with the market. By understanding these things, you are better informed when developing new policies and strategies.
Never ignore your competitors!
5. You are overreaching
In this age of advance technology and the internet, there’s something available for everyone. Don’t be confused by this. For your business to really grow and maintain customer satisfaction, you have to be clear about your target audience.
Your business is not setup to solve every challenge for everyone. By broadening the scope of your marketing and sales campaign, you end up wasting valuable time and resources targeting audiences that may never become loyal customers. Your product needs to be carefully designed and marketed to a carefully selected segment based on key factors like location, income level, gender or age. You can’t become a household name by trying to sell to everyone who will take the time to listen. With a target market, and marketing strategies backed by research, you can gain valuable leads by focusing on the part of the market that have the need your product supplies.
Get to know your customers; understand their needs and preferences. This way you can create new products or services tailored to enhance customers with your business thereby increasing loyalty as well as attracting new customers that can become loyal brand advocates overtime.
#Tip:Information is power!
The Bottom line…
Check and make sure your business is not a perpetrator of any of these five deadly business sins.
It is time for Liberian owned businesses to take control of the Liberian economy. It is high time that Liberian owned businesses begin paying attention to international business best practices and reform accordingly. Real and sustainable growth is experienced by consistently structuring and restructuring business strategies, policies and practices in a way that increases competitive and comparative advantages over time. Entrepreneurs must pay attention to the market demands and lean to scale up or change to fit the needs of the market.
Let me know your thoughts on these 5 business sins in the comment section below.
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