Oct 16

Business_Tip: Change Management

Running any business is a constant game of trial and error, and this is worse for SMEs and therefore they must be quick to adapt to change if they want to survive and thrive. This confirms the old adage that the only constant thing in the world is change. So, businesses must not protect the past, but rather focus on the future. Business owners and managers must therefore be aware that their businesses especially the SMEs must constantly evolve and this requires continuous assessment and adjustment in a couple of things that make up the business. These adjustments or changes may range from products, target market, delivery channels and even organisation structures.

The unfortunate bit of it is that; change is not always well received. When change is proposed in an organisation, different stakeholders may not always embrace it with enthusiasm and often times, may actually be discouraged. To this end, change may not realise it full benefits in most cases. Businesses must therefore take a deliberate approach to prepare and support individuals and teams in the organisation to fully appreciate and support the proposed changes.  And this process is what is termed as Change Management. Change management includes methods that redirect or redefine the use of resources, business process, budget allocations, or other modes of operation that significantly change a company or organization.

With the business environment undergoing so much change, enterprises must then learn to become comfortable with change as well. Therefore, the ability to manage and adapt to organisational change is a vital capability required in the workplace today. Yet, major and rapid organisational change is very challenging because the structure, culture, limited resources and routines of organisations often reflect a persistent and difficult-to-remove “imprint” of past periods, which are resistant to radical change even as the current environment of the organization changes rapidly.

In conclusion, we must admit that change is hard; but it must not be an excuse for not considering a deliberate change management process since change is inevitable. Change requires a significant effort and a very positive attitude.

By Brian Ahabwe Kakuru

Brian is an entrepreneur and business advisor. He is also the Managing Director at BLEGSCOPE®, and has close to 15 years of business advisory experience notably in the financial services, manufacturing, tourism and hospitality, real estate, infrastructure, and agriculture among others. You can follow him on twitter >> @BrianAhabweK

 

Oct 12

6 Tips to building a successful business

As you planned to start your first business, you probably did a lot of research, sought help from advisors, useful mentors, and got information from books, Google and other readily available sources. You could have invested a lot-in terms of money, time and sweat equity-to get your business off the ground to the stage at where it is currently. To succeed in business today, you need to be flexible and have good planning and organizational skills.

Many business owners and managers of small companies, find challenges in lacking enough time to stand back from the day-to-day running of their business to take stock of performance and longer-term strategic issues. However, reviewing your progress and understanding how to get the best out of your business and where to take it next can be hugely beneficial. This is particularly true if there have been recent changes to your business, your market or the economic environment that you operate in. In our article today, we share with some of the tips that can help you get your business to the next level, despite the busy schedules:

  1. Follow up on what is happening in your market: Businesses always adapt to evolutionary changes, as production techniques and consumer preferences gradually give way to newer trends and tastes over time. In the previous years, prompt technological advances, like the Internet and increasingly modern machinery and equipment, have had a profound impact in the business world. Failing to adapt to market changes like these can cause even the most successful businesses to flounder. To understand your market better, it is important that you: listen to your customers and understand their needs, know your competitors, and understand other factors that you need to reshape your business

2) Innovate and diversify: Always look for ways to improve your business and to make it stand out from the competition. It is important that you recognize that you do not know everything and be open to new ideas and new approaches to your business. It is important that you and your business develop new products and services in line  with your business strategy and capabilities. This allows you to have multiple streams of income. It also broadens your target audience and increases your presence in the marketplace, giving you and your company the credibility to approach a wider market.

3) Hire people and keep them engaged: Creating a successful business requires a lasting vision, especially when it comes to overcoming hitches. This can be difficult position for a single person (or even a group of people within a single company) to always make the right strategic decisions for long-term business prosperity. It is therefore important that you hire professional people and keep them engaged about your business. This helps to eliminate time wasted and also encourages creative input.

4)Understand your company’s financial position: Understanding your company’s financial position is a critical thing in evaluating the health and success of your business. Finance is a very important aspect of any organisation and must be closely managed to ensure the business can survive and grow effectively. Understanding the basic concepts of cash flow will help you plan for any unforeseen eventualities that may occur. Some of the things you need to put in consideration as far as finance and business are concerned include:

  • How much you owe
  • What level of stock are you carrying?
  • Your business’ daily/weekly/ monthly cash position and where it is taking you
  • How much customers owe you over what period
  • How cash in your business is being used

and very many others to mention but a few

5) Selecting the right business structure: This is also one of the most important decisions a business owner can make, affecting personal liabilities, taxation and levels of control in the business. The wrong business structure can act as a constraint on the development of your business and cause you problems. Unfortunately, experience is the best teacher for this scenario and whatever structure you begin with will allow you to always tweak it depending on the results that it yields. The right financial structure is dynamic for effective management. Having the right information should enable you to determine the right structure for your business.

6) Find help in time: No matter how successful your business is, financial difficulties will always come in. Do not wait until it is too late to seek for help. You can do this by: regularly reaching out to people that may be interested in your business, avoiding relying on best case scenarios, and understanding the value of being honest and transparent to your stakeholders. All this will help you easily access financial help in times of crisis.

If the above tips are put into practice, they will help you to understand how well your organisation is performing against the key areas, know which aspects need priotisation and provide useful resources to assist you with the next steps.

 

By Mackline Ampurira

MACKLINE_22

Mackline  joined BLEGSCOPE Team as an Intern and is now a Management Consultant Trainee. She previously worked with the Ugandan Ministry of Health in conjunction with (USAID) Monitoring and Evaluation Technical Team as a Research Assistant. She has interest in Marketing, Management and Human Resources. You can follow her on Twitter >>@mackampurira

Oct 10

Managing the Increasing Business Risks in the Digital Age

In May of 2014, our company website was hacked and my colleague, Edmund our Engagement Director, shared key lessons from that experience that you can read here. This experience totally altered my thinking towards risk management in organisations today. Risk management in organisations requires forecasting and evaluation of potential risks and devising strategies to avoid or minimize their impact on the organisation. This means acknowledging that risks exist, assessing their possible impact on the business and devising means to mitigate these risks is central in any organisation.

 Unlike in the past where opportunities were fewer and business risks were limited to political, technical, contractual among others, digitalization and technological disruption have caused many organisations to revisit their business models to retain customers created from the boundless possibilities for growth and value creation shaped by the digital world. This, however, comes with its own set of challenges and risks since digital risk has the potential to significantly affect the operational, financial and strategic elements of a business.

The risk function has become a crucial enabler of growth and more organisations are considering risk when forecasting and budgeting. While technology has always had an influence on businesses, the current phase of modern technology is very different both in terms of scale and pace of change. Gone are the days when technology was considered as a purely technical issue, it is now a critical business risk. According to a 2016 report by EY on digital risk, there are clear signs that risk management is coming out of its silo —a promising and necessary move towards risk arising from digital disruption.

 Although cybercrime (i.e. hacking, copyright infringement and others) is the biggest challenge for many organisations; and has led to financial loss by quite a number, in regards to digital risks, it is not the only challenge. However, before we delve into the other risks, we need to steer clear of the perception that digital risks are only an element for consideration by financial institutions.

 The digital age has created several other threats for businesses and intensified existing threats such as data loss, technology outages, misrepresentation, reputational risks and third-party risks. Continuous change and disruption also time and again keeps organisations on their toes as they are keen to explore new breakthrough channels for example with social media. In trying to keep up with the trends, new technologies are also becoming obsolete at a faster rate than before. A balanced strategic approach towards risk management therefore becomes crucial.

As Steven Culp, Accenture’s Senior Managing Director for Risk once wrote, risk management—once seen as a pure safeguarding function—now has a more proactive role to play. As new risks, in particular digital disruption, emerge, the risk function will be crucial not only to defend against threats, but also to support growth and success in a digital future.

 Bearing in mind these risks, organisations need to develop sustainable mitigants for the ever increasing business risks in the digital era and below are a few suggestions;

  • Policies, frameworks and procedures; the one mitigating factor for all risks in organisations is developing the right policies and procedures that govern the overall operation of the business. These policies should be comprehensive enough to cover the technological risks the business may encounter. These policies should be upgradeable as the changes and disruptions come. These will serve to address the intensifying digital risks in the market today.
  • Monitor online presence; it is no longer common for businesses to explore various digital options such as websites, social media accounts among others. Building presence and maintaining sites through updating platform versions, plugins among others will remain key. Maintaining online presence also allows for organisations to understand customer preferences and therefore gives them the opportunity to serve clients or receive feedback in real time.
  • Backup; from experience, we lost some critical information when we were hacked and now we are keen to back up regularly in 4 places. To ease the process, this can be automated or outsourced to a third party through cloud storage. You should be keen to understand how third party backups work, but more importantly, do not rely totally on the. Have your own backups in either a hard disk or other storage devices.
  • Risk management as a function; although not all organisations are big enough to have risk management as a strategic function, it is important to continuously update potential risks (digital or otherwise) facing the organisation and more importantly incorporate these potential risks in decision making.
  • Manage cyber security and improve cyber safety; cyber-security and safety is no longer much about avoiding being hacked as it is about how an organisation reacts and responds to these hacks. The importance of creating and maintaining defenses cannot be undermined; however, we must recognize that hackers are ahead of us more times than we care to admit. Organisations should focus on backups but also develop strong technologies capable of recognizing and eliminating attacks in real time.
  • Data management and data security; as with backups, your organisation should take advantage of data security services offered by third parties as well as develop strong solutions internally.
  • Reputation; so much depends on a company’s reputation and the digital age magnifies this risk even further. How your company is perceived, will have an effect on your sales, growth finances etc. as businesses operate virtually today through social media, it is critical to remain creative, relevant, hire the right staff to manage online platforms and continuously build and maintain a positive image in the eyes of customers and the public.

Although digital business risks have the potential to negatively impact a business significantly, the opportunities remain boundless for organisations that overcome these challenges. Critical to managing risks in the digital age is regular review and adjustment of strategies in a sustainable manner. In the near future, we are likely to have products such as cyber insurance from our insurance providers.

 

By Sarah Achiro

Sarah_Achiro Sarah is our Business Analyst . She is a growing consultant with BLEGSCOPE and has 3 years’ experience in consulting for SMEs and in the service sector. She is keen on strategy, finance and procurement. She has previously worked for Riham Foods and MTN. You can follow her on twitter >> @achirosarah

Sep 25

BUSINESS TIP – Market Intelligence

“Marketing is becoming a battle based more on information than sales power – Philips Kotler”. The rising competitiveness in the business environment today has forced several businesses to keep alert and see what’s constantly happening in their environment so as to keep ahead of their competitors. This is precisely what Market Intelligence is all about. As its name suggests, it is simply the intelligence about a business’s particular market. Though broadly used, the term Market Intelligence is often misinterpreted and made to seem like a complex and mysterious art requiring high-level detective work.

Breaking this further, Market Intelligence takes a form of collecting and analysisng relevant information about the company’s market environment to support decision making. The information collected may include geographic location of a business and its competitors, the particular demographics of a consumer base, purchasing patterns of consumers or their tastes and preferences.

More benefits to undertaking Market intelligence include;

  • Pursue new market, or expand presence in a market with confidence.
  • Reduce the risk of an investment decision being wrong
  • Market leadership, obtain first-mover advantage over competitors
  • Offer clients what they need, grow market share
  • Set and sustain a distinctive corporate identity
  • Customise marketing effort around customer needs

How then do we go about Market Intelligence? Number 1; leverage technology. Businesses now operate in a world in which information is more readily and publicly available than ever before.  Information on market trends, legislation, customers, suppliers, competitors, distributors, product development and almost every other conceivable topic is available at the click of a mouse.  Search engines, online libraries, company websites and other sources provide information in an increasingly plentiful, easy to find, and easy to digest way. Next, you can design a simple tool and solicit responses from both clients and non-clients.

By Brian Ahabwe Kakuru

Brian is an entrepreneur and business advisor. He is also the Managing Director at BLEGSCOPE®, and has close to 15 years of business advisory experience notably in the financial services, manufacturing, tourism and hospitality, real estate, infrastructure, and agriculture among others. You can follow him on twitter >> @BrianAhabweK

Aug 31

Handling unsatisfied customers: Turning a bad experience into a good one

A few weeks ago while visiting  friend’s store that does online delivery of clothes, a customer came in cursing and complaining about a dress she had recently purchased.  She was complaining about the different kind of dress she had ordered for and wanted to return. My friend, Cathy realized it was out of frustration so she did not take it personal and she made sure the customer knew her concerns were being heard. She listened carefully and apologized, but all this did not help in the situation. The client instead got angrier, shouted accusations and rose further into a rage. Within a few minutes she walked out, vowing never to do business again with Cathy.

As she left, this left me thinking about how one can handle unsatisfied and often irate customers while managing their business. This is very clear to most business operators as being one of the major challenges in business. Despite their characters, dealing with such kind of clients is your role however difficult it gets. But if you know what to say and most importantly how to say it, it could help you save the situation and eventually end up with a better relationship with the client than you had before.

Here is what you need to do:

Have self-control: If you are a business operator or sales person in this kind of situation, never argue with the client whenever he/ she is not happy. If you can, try the best to be wrong in order to be right to show that you respect the clients. This will help the customer be more open to you regarding the exact problem and it is from this, that you will be able to know how and from where to address the problem. Always remember that you could lose a very good customer when you create an argument or show displeasure.

Listen carefully: When the client begins to complain, do not try to fix the problem immediately but instead listen carefully and understand why he/she is complaining. Every customer wants and needs to be listened to, acknowledged and understood. Always let the client talk him/her-self out. Give her the body language the will let her realise you are listening with an open mind, also avoid any disruptions while trying to solve the problem with the person. In case you do not understand the customer’s complaint, do not hesitate to ask what it could actually be. This will help this could help in building empathy and rapport with the client this calming down the situation.

Present a solution and empathize with the client: After carefully listening to the customer and understanding their concerns, apologize for the inconveniences caused and immediately suggest a solution. In situations where you are sure about what your customers want, tell them exactly what you are sure they need. For example if you are sure they need a refund for their money, tell them, “I would like to correct all this situation by refunding your money.” If you are not sure about what your customers need to solve the problem, kindly request them to suggest their preferred opinion. If these are not convenient for you, kindly ask them again to consider something that will favor both of you. You should bear in mind that even if problem solving is not your responsibility, do not tell them so. You can ask the client to patiently hold on and then get all facts required and later return to them with a practical solution.

Action and follow up: On agreeing on the best solution, take action immediately. It is important that you explain to the client each and every step you will go through to fix the problem.

Once the problem has been solved, follow up with the client after an agreed period of time to find out if they are happy with the solution. It is at times recommended that you go beyond their expectations through different ways like sending them an apologetic email and thanking them for the cooperation. You can also offer them the same product or service at a discount on the next purchase, but be mindful that it makes business sense to your enterprise.

Finally, the staff in your business or organisation should be trained on how to handle such customers more successfully. They also need a strong managerial support and the opportunity to develop appropriate strategies to ensure good relations between the company and its clients.

 

By Mackline Ampurira

MACKLINE_22

Mackline  joined BLEGSCOPE Team as an Intern and is now a Management Consultant Trainee. She previously worked with the Ugandan Ministry of Health in conjunction with (USAID) Monitoring and Evaluation Technical Team as a Research Assistant. She has interest in Marketing, Management and Human Resources. You can follow her on Twitter >>@mackampurira

Aug 30

Tips on improving your own levels of accountability

Personal accountability in the things you do at work can encompass everything from employees being accountable to and making themselves indispensable, to managers and people in leadership roles showing personal accountability in order to foster an environment of accountability in the office with their employees.

If you are not in a management role, demonstrating accountability at work will prove that you are a valuable asset to the company and it will make you an indispensable commodity.
If you are a manager or in a management position, displaying personal accountability will help build a culture of accountability in your company.

Your employees will watch as you create an acceptance and understanding of accountability, and will more than likely follow your actions. Knowing that personal accountability is something that even the management is responsible for will help employees feel balanced and bonded through that shared responsibility.

What is Personal Accountability?

Management consultant Todd Herman defined personal accountability as “being willing to answer … for the outcomes resulting from your choices, behaviours, and actions.”

When you’re personally accountable, you take ownership of situations that you’re involved in. You see them through, and you take responsibility for what happens – good or bad. You don’t blame others if things go wrong. Instead, you do your best to make things right.

In the workplace, accountability can go beyond your own tasks. For example, you may be held accountable for the actions of your team. Sometimes it can be tough to take personal accountability. However, you’ll find that it offers many advantages.

First, you’re likely to have healthier relationships with your friends, family, and colleagues. A 2005 study found that children who were encouraged to take personal responsibility for their actions also had more positive social interactions.

Accountability also builds trust within teams and organizations, because people know that they can depend on each other. Leaders who are accountable are more likely to be trusted and respected, because people know that they will keep their word.

Personal accountability can save time and money, too. People who take responsibility for their actions speak up, and they look for solutions when there’s a problem. This not only prevents the situation getting worse, but it stop costs and delays from escalating.

Last, personal accountability can boost your chances of promotion. When you show senior colleagues that you’re dependable, you mark yourself out as someone with leadership potential.

Tips on how to be more accountable

Personal accountability isn’t a trait that people are born with, it’s a way of living that you can learn. Use the strategies below to become more accountable

1) Know Your Role: It’s hard to be personally accountable if you’re not clear what you’re responsible for. If this is the case for you, ask your boss to provide a job description that sets out your tasks clearly. If responsibilities are unclear within the team, ask your manager to outline who is responsible for different team tasks, and to share this information with everyone involved.

2) Be Honest: Success in life only comes when you’re completely honest with yourself, and with others. This means setting aside your pride, and admitting when you’ve made a mistake. So, tune into your “gut feelings” when things are difficult, and learn to ask for help if you’re struggling, so that you don’t let others down.

3) Learn to apologise: Accountability doesn’t stop with honesty. If something has gone wrong and you were responsible, then you need to apologize. Many men find this difficult as they always want to be proven wrong and in the process disrespect others. Focus on making amends when you apologize – show what you’ll do to make the situation right. This allows everyone involved to move on, and helps them focus on the end goal, rather than the problem.

4) Don’t Over-commit: When you take on too much, something will eventually fall through the cracks. That means that you’ve let someone down. So, before you agree to a new task, think carefully about your schedule and whether you’ll be able to fulfil the task to the best of your ability. If you’re not sure that you can complete it, say “yes” to the person and “no” to the task so that you maintain a strong relationship and a good reputation.

5) Make Changes: Accountability can open up powerful learning opportunities. When something hasn’t gone to plan, ask for feedback, and look for ways to do things differently in the future. Reflect on your actions, too: spend some time at the end of each day running through these simple questions:

In some failing organizations, managers who avoid being accountable can get ahead, while those who take responsibility may be ejected if some small thing goes wrong.

If your organization has this type of culture, then it may be time to behave accountably, and find a new role in a better organization.

Key takeaways

When you are personally accountable, you take ownership of what happens as a result of your choices and actions. You don’t blame others or make excuses, and you do what you can to make amends when things go wrong.

To become more accountable, make sure that you’re clear about your roles and responsibilities. Be honest with yourself and others, so you can admit when you’re wrong, apologize, and move on.
Make the most of your time, and manage it carefully so that you don’t take on too much.

Lastly, think carefully about situations where you didn’t take responsibility but should have. These mistakes and failures can be valuable teaching tools, if you have the courage to learn from them.

 

By Edmund Kamugisha

Edmund is the Engagement Director at BLEGSCOPE®, and has 12+ years of management consultancy experience notably in MSMEs, FMCG companies and in the service industry.

You can follow him on twitter: @edmokmg

Aug 17

Responsibility in the workplace: Part 1

When you hear the word responsibility, you will not be shocked to think of words like care, safekeeping, custody and obligation. This should not really surprise you as being responsible requires a certain level of maturity across various different levels.

Growing up as a boy, I was always bored by my elder sister’s refusal to want to play my boyish games with me and rather always boss me about. She was always the one telling me when to take a bath, or to always brush my hair, or to put the toilet seat down, or to clean up after myself and the list goes on and on. When you translate this or the lack of into the workplace, it has to manifest positively for it to be full appreciated. However as Rome was not built in a day, responsibility just like charity truly does begin at home.

Allow me to build my case.

When you are hired for a job, your supervisor/ manager aka Boss gives you a list of duties which we have now come to agree to also be known as responsibilities. He/ she will communicate with you that it is your job to ensure that the tasks at hand are done to a satisfactory manner. If you do not do the tasks within the stipulated time, it is only courteous to attempt to communicate with your supervisor aka Boss and give a further time as to when it or they will be done in totality. This is called being accountable for your responsibilities.

If you are struggling with part of the task, it is also important to share with your supervisor the specifics of the stuck situation with areas that you feel the supervisor can be of assistance. This is being pro-active.

A person who demonstrates such accountability should indeed not be taken for granted in any workplace as it is indeed often seen that someone else is blamed for a certain failure within any given project. While you can be assigned a variety of responsibilities, whether or not you are accountable depends on your character. A person who demonstrates accountability takes the hit if she doesn’t complete the task on schedule. When you refuse to be accountable, you’ll place the blame on someone else for the project’s failure

Blaming others for results is not being accountable for your work.

In Order to create that vibe which promotes accountability, a certain working environment needs to be cultivated. If you are reading this, you will want to argue, share or even agree with what I am postulating. Just consider three different environments with varying actors.

ONE:
Fully engaged professionals who go to great lengths to fulfil their responsibilities for the day/week.

See a connection between what they do and the success of the company.

TWO:
Mixed group of staff who feel they are owed more than what they give and always have unmet grievances that always affect outputs and general productivity.

 THREE:
A group of staff who are self-focused and do not feel connected to what the company does and how they help it achieve its objectives.

Which is the place that most people would want to work?

>>a workplace based on trust and personal responsibility<<

When employees are engaged, the outcome is obvious. Customer satisfaction improves, staff turnover reduces, and productivity and profitability increase.

So how do you as a manager increase engagement and boost productivity and profitability?

The answer is through employees taking personal responsibility for their work. Responsible employees are more engaged and productive. They willingly accept accountability for producing results and continually look for ways in which they can improve their performance.

But you already know that because your best employees are the responsible ones. The challenge for most managers is figuring out how to get the rest of their employees to be accountable, too.

Many business leaders do the exact opposite of what they need to do to get people to be responsible, productive employees—they attempt to hold them accountable. Have you noticed that it does not work? Instead of holding people accountable, there are a few simple steps you can take to transform your organization into a responsibility-based workplace.

Create the Right Environment

People cannot be held accountable; they can only choose to be accountable. Accountability is the natural outcome of a person deciding to take responsibility for something.

Self-directed people—those who see themselves as responsible for their behavior and performance—want to be held accountable. They want to have a sense of ownership in their job, to have some input into how things should be done and to have a say in how their performance will be measured.

Employees who feel like they have no say will tend to react in an “other- directed” way. Other-directed people tend to be either compliant or rebellious—doing what they feel they have to do or doing the opposite of what you want them to do.

 

Other-directed employees have switched off; they become disengaged and resist accountability. And they usually blame someone or something else when they don’t perform well. The natural outcome of using an authoritarian or control-based approach to enforcing accountability is exactly what you don’t want—self-directed people leave, and other-directed people stay.

Instead, you need to hand over some of the control. However, many managers fear entrusting employees with the responsibility of defining their own success and determining how to reach it through their performance. As a result of this fear, managers attempt to hold people accountable by insisting on compliance with policies and procedures, establishing goals and performance standards for employees, or offering incentives in an attempt to motivate people to comply.

The research does not support this fear; in fact, the opposite is true. Employees who are trusted and given more say over how they do their jobs are more engaged, more committed and more productive. They achieve more. People who know they are being trusted to be responsible do not want to let their manager down.

The primary fear employees have about being held accountable is that there will be negative consequences if they don’t succeed, maybe even the loss of their job. It is safer for them to avoid risk and to do just what they are told and stay out of trouble. Employees who will not accept responsibility do not trust management enough to take the risk.

 

Build Relationships Based on Trust

The foundation of a responsibility-based culture is a high level of trust throughout the organization. When trust between management and employees is high, the following situations occur:

  • Information is exchanged freely, feelings and opinions are openly discussed, and people do not harbour hidden agendas.
  • Expectations are clear, disagreements are discussed and resolved, and individual performance is discussed and agreed on without the need for a formal process.
  • Differences are valued, employees feel respected for their contribution, and they have input into how the organization can be more successful.
  • People keep their commitments, strive for excellence in everything they do and can count on each other for support.

Managers cannot get accountability without trusting employees to take ownership of their jobs and believing that they will do the right thing by the organization.

Employees will not choose to be accountable unless they trust management; they need to know that they will get the support they need to do their best and that mistakes will be treated as learning experiences rather than as opportunities for blame and punishment.

Stop holding people accountable. Use these tools to let them choose to be accountable.

 Next week we shall see tips on how to improve your own personal accountability habits.

By Edmund Kamugisha

Edmund is the Engagement Director at BLEGSCOPE®, and has 12+ years of management consultancy experience notably in MSMEs, FMCG companies and in the service industry.

You can follow him on twitter: @edmokmg

Aug 07

Business Tip – Managing Growth

Every business desires to grow and achieve its goals. This growth may be in terms of sales growth, number of customers served or even quality of service among others. Like it is with any change, the changes that enterprises face as they grow are often times very challenging. It is therefore important for businesses to take deliberate initiatives to manage growth. Here below are some of the tips;

  1. Understand your business: It is important to really understand and appreciate what your intentions and values are as a business. What is the purpose of the business and what sets you apart from the competition in your industry? Take time to appreciate your strong and weak areas. Know where you want to be and how the business environment around you will affect your operations. This will help you to decide how you want your business to grow. Create or refine your vision and mission statements as they will support you to build very clear objectives and how to achieve them
  2. Know your growth market: The role of business is to create a customer; says Peter Drucker. Therefore, a significant part of any growth strategy is to understand your market and how it is aligned to your products and services. Take time to study your industry deeply; this should include target market, why they buy, the buying patterns, substitutes on the market and many others. Remember, as business conditions change, the market may also change and this happens all the time. Therefore, continuously study the market and align your business to remain relevant. This will help you to establish a niche in your market.
  3. Build a team aligned with your core values: People are the greatest asset any business can ever have. This applies to all sectors of business. As a business grows, the business expects the staff to continuously appreciate the changes and perform accordingly. Expectations from staff keep on growing, but must remain aligned to the core values of the business.
  4. Spread company knowledge around: As businesses grow, many things in the business are bound to change. This may be on the product offering, target market or even approach to marketing. It is critical that employees understand the evolving offerings, and can correctly communicate them to clients and prospects alike. This therefore, calls for a deliberate effort to continuously spread the company knowledge around.
  5. Remain focused despite challenges: Despite your best intentions and efforts, it can be challenging to stay on track. The ability to manage your emotions and remain calm under pressure has a direct link to your performance. If you are not achieving your goals and objectives, it is not good enough to blame outside factors. When you do so, you are actually giving away your personal power and denying that your success lie within your hands. What you need to do, is find a way to manage these outside factors which allows you to stay focused on your goals.

By Brian Ahabwe Kakuru

Brian is an entrepreneur and business advisor. He is also the Managing Director at BLEGSCOPE®, and has close to 15 years of business advisory experience notably in the financial services, manufacturing, tourism and hospitality, real estate, infrastructure, and agriculture among others. You can follow him on twitter >> @BrianAhabweK

Jul 11

Making Your Business More Attractive To Financiers

Society is diverse and therefore made up of diverse needs. Business enable diverse needs to be met, although among others they in turn create an uneven wealth and income distribution among members of society. Aside from meeting societal needs, business are key drivers of economic growth in world over. Micro, small, medium and even large companies sprout to create products and services to meet various needs of the population. The importance of MSMEs, especially, in developing countries cannot be overemphasized. Apart from providing products and services for consumption, these entities also contribute significantly to both formal and informal employment. Micro, Small, Medium Enterprises (MSMEs), however, across the country face many and varied challenges to their growth and operations. One of such major challenges is the limited access to finances.

Lending is a business like any other, where a comfortable balance between risk and reward must be met. Lenders will only be willing to do business with clients where there is “acceptable risk” in anticipation of earning commensurate interest off the loans issued. This model has largely favored large borrowers who easily afford to provide collateral as requested by the banks and backed up by mature business with low chances of collapse and the micro businesses where the lenders are locally based and have taken the time to fully understand their potentials borrowers. For micro businesses, different models have been developed such as group lending which provide comfort to the lenders. Commercial banks, Micro Finance Institutions, (as service providers) have played a significant role in offering financial products and services to larger companies and individuals. On the other hand, Savings And Credit Companies (SACCOs) and Village Savings and Lending Associations (VSLAs) have equally played an important role in enabling access to finance to the individuals, especially the unbanked sector at the bottom of the financial pyramid. However, due to the nature of the services offered, SMEs are less likely to access loans from banks and other financial institutions because their financial needs are too big for the VSLAs, SACCOs and MFIs and yet too small for the commercial banks.

From the above, it now becomes clear that in the financing industry, there is a category of business which find it hard to access financing. These are the small and medium enterprises which are vulnerable to external shocks and largely operating independently to enjoy social support from peers. And on the other hand, these business have shallow assets bases and often times are not in position to offer collaterals to lenders. This category has often been referred to as the missing middle.

Although my focus today is on the SMEs and less on the individuals, the missing middle is not only made up of SMEs. Educated youth and skilled workers who lie between the large industrial credit seekers at one end and very poor small borrowers like low income households, farmers at the other end of financing spectrum are equally hardly catered for in terms of credit facilities.

Although not one particular reason can sufficiently explain the limited financing options for SMEs, some key reasons have been put forward for banks being reluctant to offer loans to SMEs such as;

  • Lack of a credit history
  • Failure to meet requirements for lending such e.g. a clearly developed Business Plan
  • High potential risk of not paying back, in case the business collapses
  • Lack of collateral or security
  • Lending institutions generate lesser profits on smaller loans, thus are reluctant to provide such loans
  • A good number of SMEs operate informally, making them unattractive to credit providers.

Interventions such as Mobile Money have aided money movement but have not significantly tackled the challenge that the SMEs are facing in regard to access to financing. Digital financial solutions (“fintechs”) such as the recently launched MoCash by MTN still are more relevant to the individuals at the bottom of the financial pyramid because of the size of loans offered. Other interventions such as competitive grants have only supported a few SMEs, and their impact is yet to be felt within the economy as a whole. With SMEs being key drivers of economic growth in the economy, a key question to ask is how can SMEs attract affordable financing to meet their financial needs?

Banks and other lending institutions have started giving more attention to SMEs and tailoring financial products to meet their financing needs, which is a step in the right direction because of their ability to drive economic growth. To a greater extent however, SMEs need to;

  • Understand the lending criteria for their target lenders and ensure you meet them.
  • Develop highly scalable business models for the business
  • Keep proper records and prepare financial statements
  • Understand how to separate business and personal finances
  • Seek support in developing business plans
  • Seek professional support to guide them through the loan application process and many others.

Key questions to ask yourself before the decision to borrow are;

  • Do we really need to borrow? Or can you manage the current cash flows more effectively?
  • For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs.
  • How does your financing need fit within your business plan?

Answering these key questions among others and taking the initiative to increase your attractiveness will be critical to get the financing your business requires to accelerate forward.

By Sarah Achiro

Sarah_Achiro Sarah is our Business Analyst . She is a growing consultant with BLEGSCOPE and has 3 years’ experience in consulting for SMEs and in the service sector. She is keen on strategy, finance and procurement. She has previously worked for Riham Foods and MTN. You can follow her on twitter >> @achirosarah

 

 

 

Jun 19

BUSINESS_TIP Why Every Business Needs To Know About Its Business Environment

Talk to any business owner of executive today and ask them about their challenges. Whereas some will talk about internal aspects like (Human Resource constraints) of the business and to what extent they are inhibiting their growth, many will actually talk about those external factors (out of their control) like high interest rates, volatile exchange rates among others are major roadblocks to their business growth.

This brings me to a key subject today; business environment. The term business environment refers to external forces, factors and institutions that are beyond the control of the business and they affect the functioning of a business enterprise. For example the political instability in South Sudan has affected many businesses just like how the long drought season last year has done. These effects may be positive or negative. On a positive note, the government’s increased expenditure on infrastructure developments has widened the market for contractors.

It is therefore that every business takes time to study, analyze and thereafter develop strategies to operate in an environment that affects your business. Many scholars and business practitioners have developed many tools to help businesses understand their environments and here today, we shall share with you the PESTEL Model. One may evaluate six (6) forms of environmental influences in the PESTEL framework. They are political, economic, social, technological, environmental and legal.

  1. Politics affect business in many ways; ranging from political instability, election cycles, tax policies, protectionism or protecting of local markets etc.
  2. Economic factors such as interest rates, inflation, unemployment rates and access to credit must also be evaluated by every business.
  3. Social factors, largely related to the populations’ demography assess the mentality of the individuals or consumers in a given market. Gender, literacy, religion, population structure and many others are fundamental to a business.
  4. Technology is increasingly becoming a multi-faceted enabler in effecting change. Technological advancements can optimize internal efficiency and help a product or service from becoming technologically obsolete.
  5. Impact on the environment is a rising concern and there is growing pressure on business to advance practices that do not harm the environment. In some instances, incentives are available to environmentally friendly enterprises.
  6. This entails learning about the laws and regulations in affecting your industry, country or local government. Examples include licensing requirements, employment laws, and health and safety regulations among others.

There is a general observation that the business environment is becoming more demanding as it continuously evolves. To a great extent, the changes in the evolution are continuing to speed up every now and again and this requires constant transformation in how leaders think and act. Traditional methods may no longer be effective. We acknowledge that change is not easy, but leaders who continually reframe their mindset and innovate are best set up to thrive and grow.

 

By Brian Ahabwe Kakuru

Brian is an entrepreneur and business advisor. He is also the Managing Director at BLEGSCOPE®, and has close to 15 years of business advisory experience notably in the financial services, manufacturing, tourism and hospitality, real estate, infrastructure, and agriculture among others. You can follow him on twitter >> @BrianAhabweK