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Personal Finance

Easy strategy to ensure your small firm thrives

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Competent human resource is key to any business and an organisation structure. FILE PHOTO | NMG 

Large firms will craft a strategy and have a well laid out plan for their business for the next 3-5 years.

However, it is different for small firms. Most do not even know they need one.

The strategy can be developed slowly and become part of the business.

It means starting small and documenting the most important aspects of their firms. These include strengths, weaknesses, challenges, risks and how to control them. Once this is organised it is preliminary. With this evaluation, the firms know what is quintessential and they have a basic model.

Most micro, small and medium enterprises (MSMEs) do not keep records of finances invested, budgeting activities, sales or even loss and profit accounts. A record of firm’s assets or an inventory is usually absent and loss of the item might not be identifiable early enough. Equipment maintenance and servicing is not prioritised. It is only done upon breakdown.

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Planned preventative maintenance is not part of operations, which means the firm loses production time and business during down time. An inventory would assist the firm in tracking of repairs, timely replacements or loss of item.

Human resource

Competent human resource is key to any business and an organisation structure, however, simple should be clear. Roles and responsibilities should be clearly defined and who reports to who should not be ambiguous.

A one-man outfit means there is no continuity in case of a calamity. A succession plan should be put in place to allow for continuity. The business should continue even when the owner is no longer actively involved.

The firm’s vision, mission and objectives need to be well spelt out. The business must have a reason for existence, what it aims to achieve, its targets and its dream for the future.

There must be a way of tracking its performance. The firms’ mission should clearly state how it serves its clientele and simply outline the aspect of its interaction with its customers.

Record keeping

It is important for the business to keep a record of customers they serve or clientele. Clients should be prompted when they are too quiet. Let them know that they are important and the goods are still available otherwise competitors will take advantage.

Learn the market you serve, your competitors too and what they are doing better than you then learn a thing or two from the way they carry out their businesses then continually improve.

Strength

Define uniqueness of your product and sell that aspect. Let it form part of your strengths and capitalize on it. Keep improving the product which forms part of your innovation. Learn how to protect your brand and do not let the bad guys take away your sweat by taking away a brand they never built.

Protect it legally by ensuring you have the property rights. Have unique identification features which you can be able to pick if your property rights are infringed.

Regulation

Know the regulatory nodes. Which government agency requires what and what noncompliance can keep you from being in business. Know the requirements and always sort this in a timely manner. These non-compliances are a contravention of the law and have consequences.

Once the basics are sorted and the business has a system you can move to the next level of coming up with a more complex strategy. By then your business will have grown from simple to the next level.

The writer is regional manager (Lake Basin), Kenya Bureau of Standards.

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