Growth mindset the key to prosperity of SMEs

Making a business pitch. file photo | nmg
Making a business pitch. file photo | nmg 

Small and Medium Entreprises (SMEs) constitute 40-50 per cent of the GDP, not only in Kenya but many African countries. Additionally, 80 per cent of Kenya’s workforce comes from SMEs. These numbers look good on paper and stress the importance of SMEs to the economy.

However, a scratch below the surface reveals that more than 80 per cent of these SMEs do not make it past their second birthday. A collection of factors that work against them ensure that most of them die before they can realise their potential.

A study dubbed ‘‘Doing business with SMEs in Kenya’’ by Strathmore Business School and Invest in Africa which is a not for profit organisation that supports SMEs scale up through providing access to markets skills and finance, brought to light these factors that hinder their growth.

Lack of finance, lack of corporate governance, lack of business opportunities, lack of appropriate business skill are what stood out. A closer scrutiny at SMEs shows even those that have this access to capital, corporate governance and training may still fail due to lack of a growth mindset from their owners. Growth-minded means looking for ways to constantly improve. It means being open to change and embracing it.

What is striking is that SMEs are in a better place to adapt and change since they are small in operations and hence agility in decision making.

Big organisations take longer to change tact in operations when things are not going to plan. For example, if John a kiosk owner at the bus terminus realises that business is slow, he can move his operations to another stage in another part of town.

It is easier for him make such a decision to change the location unlike a big organisation deciding to shift operations to another country.

There are numerous consultations and research to be done due to the magnitude of the operations, they have to look at projections into the future and analyse that those changes are not permanent. For John, if he still finds that the other stage is not as profitable, he can still come back to his original place.

The opposite of a growth mind is a fixed mind which essentially concentrates on one way of doing things. The world today is no place for a fixed thinker, if in doubt, please look at many of the disrupted traditional industries like the taxi, housing, accommodation, sports betting, printing and many others. In all these industries, there are those who tried to fight the changing trends all in vain. Therefore, when sales take a dip due to the harsh economic times, the unfavourable election conditions, or when a superior brand introduces a new product in your category, you should analyse the change to see what the market is telling you. By being at the forefront of change, you are able to even anticipate change and take the necessary measures to stay ahead of the game.

Another aspect of embracing change is the ability to adapt quickly to changing market conditions. In this age of disruption, access to information and uncertainty, completion can come from your unlikely source.

A boy with internet access in his bedroom can develop a better service than yours. Therefore, change is the only constant thing in your business. However, your ability to respond and adapt to change is key to success.

Denis Mbau via email

Severely constricted umbilical cord can pose complications

I read Dr. Skolia Wanyonyi’s article in the health section of the Business Daily edition of October 11, 2017 titled ‘‘Facts about umbilical cord around baby’s neck.’’

While it is true that foetuses do not need to breathe in air through their respiratory system, it is worth noting that the foetus actually does swallow and ‘breathe in’ significant quantities of amniotic fluid while inside the womb.

According to Babies Online website, amniotic fluid helps the baby develop the lungs. While in the womb the baby practices breathing by breathing in and out the water in the amniotic sac. The baby swallows and inhales the amniotic fluid and replaces the volume in the amniotic sac by urinating and exhaling the liquid.

This therefore means that in case the umbilical cord ties itself around the baby’s neck causing strangulation, these critical activities are blocked from happening. Given the vulnerability of the foetus, it is possible that a severely constricted umbilical cord can cause death.

Nashon Tado Nairobi