As season’s greetings and best wishes for a New Year start pouring in through corporate email and social media posts, the truth is that business for many small and medium-sized enterprises has been rocky for a better part of this year.
Cash flow dried up, a direct consequence of tighter consumer purse strings and a credit market that remains inaccessible for what matters. Many other factors tending to the geopolitical have put a stranglehold on the general business environment and beyond the humour quotient ascribed to the slang euphemism, "kwa ground vitu ni different" things have, and indeed continue to be tough for the economy's spine that is the SME sector.
There is a mix of outcomes here from pivoting into alternative opportunities, downsizing to stem capital burn and extend runway, mergers to strengthen capabilities or cover identified gaps to outright closing shop.
None make for an easy decision and this could shed light on the current mental state of many business owners as the year draws to a close. Looked at from a solution lens, the term efficiency jumps out.
Regardless of which fork in the decision tree is taken, 2020 will be all about efficiency across-the-board, measuring and adjusting to optimise for desired outcomes. With depressed purses affecting both the consumer end and business teams, it will be important to double down on channels that have auditable ROI. Given that only agencies get the attention of the dominant platforms where many consumers live out their digital lives, business owners and their teams have to upskill and move beyond the advertising basics, that despite some level of targeting will need to deliver better than normal to compensate for a poor general market. Organic discovery will also be important as more of the corporate class, faced with uncertain job futures also dive into an additional side hustle.
There is no worse state than being invoice rich but cash poor. SMEs need to do two things, after ensuring that marketing and discovery are sorted.
The first is to automate collections and actively track the status and age of any outstanding payments. A nifty integration with a feature-full payment gateway and cloud-based accounting platform would deliver. Second is to rethink terms of engagement; for example dunning fees on service contracts, that protect and compensate for the unintended credit support position that SMEs are forced into.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
