Business News of Thursday, 24 December 2015
Small and medium-scale businesses managers will have to go beyond their comfort zones in order to survive the challenging times that the coming year will bring to their businesses, Enoch B. Donkor — acting CEO of Global Access Savings and Loans, has advised.
SMEs this year have had to contend with costly utilities, frequent power outages, high cost of credit, and high inflation among other factors which forced some SMEs out of business. Mr. Donkor reckoned that there is little indication that these challenges will disappear heading into 2016, and that businesses must brace-up or face collapse.
Speaking in an interview with the B&FT, the acting CEO said with the right attitude and preparation business owners can weather the storm that the coming year will bring.
“Managers of businesses will have to make it habit to plan — precisely, they should have short-term plans…preferably a year. On the power situation, for instance, there is need for SMEs to structure working times to include odd times — for example night shifts, when power is available,” he said.
While he urged business owners with the means to acquire power generators or plants to do so, he advised that the use of such equipment must only be deployed at peak times in order to draw the maximum benefits from it and cut down on wastage.
With interest rates on bank lending costing an average of 32 percent per annum, Mr. Donkor said businesses will have utilise other sources of capital in other to optimise their working capital.
“Sources of funding are not always from the banks. Once you have the character, once your suppliers see that you are credible, you can buy on credit and negotiate terms of the credit leveraging on your credibility. In that case, you can easily manage your receivables to pay your suppliers,” he said.
Small businesses that do not belong to various voluntary business associations such as the Association of Ghana Industries (AGI), Chamber of Commerce and Industries among other like-minded associations, must make the effort to do so in the coming year, he argued.
According to Mr. Donkor, the benefits that businesses derive from such associations are enormous; especially looking at the several regulations that affect the operations of businesses in the country.
“When you operate alone, it is very difficult for you to have an impact on policy direction; but when you operate as a group or an association, you are able to advance your argument to affect policy direction concerning areas where you need change,” he said.
Global Access Savings and Loans, which is one of the pioneers in the non-bank financial services sector, has its core clientele being small and medium-scale enterprises, and the acting CEO added that despite the fierce challenges businesses face, he is confident given the right approach such challenges can be turned into opportunities.