We have heard stories of great businesses starting from very humble origins. The software giant Microsoft, for instance, was started by Bill Gates in a college dorm. Steve Wozniack and Steve Jobs started Apple in a garage in 1976.
Twenty-five-year-old college drop-out John Mackey and 21- year-old Rene Lawson Hardy saved and borrowed money from friends and relatives to start a small natural food store in 1978. Today, Whole Foods Market generates over US$6,5 billion in annual revenues. Phil Knight started Nike from the boot of his car, a green Plymouth Valiant.
How about a local example? Well, Securico Security Services was started with only four employees in a cottage but is now one of the largest security firms in Zimbabwe.
What does it take to build such great enterprises? And why do some businesses remain small forever, like the local neighbourhood vendors who sell vegetables from the same open spot for decades?
The greatest factor contributing to how big your small business will grow is your desire. If you think small, you will remain small. Now is the time to think big, have big ideas and bigger visions as opportunities open up in our recovering economy.
Growth is not only desirable in terms of increasing the entrepreneur’s wealth, it is also necessary in order to give consumers more satisfaction, better quality and lower prices. The majority of small businesses are highly inefficient, lack modern technology, have low quality standards and are wasteful of resources; so they have to charge higher prices in order to survive.
Because markets are dynamic and technology is always changing, firms that do not change quickly enough become obsolete and redundant. With new businesses starting daily, competition for the consumer’s dollar is intense. Only firms that can keep up and stay competitive will survive. That is the law of free markets: inefficient firms have to die to make way for the better ones.
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Although it is good to support small and micro-enterprises operating in the informal sector so that they can enter and survive in the formal economy, it is much better to support more mature and viable SMEs to upgrade their products, processes, level of quality, productivity and innovation. This will enable them to integrate into local, national and international value chains, and become profitable, productive and performance driven enterprises.
A vibrant SME sector createsjobs and increases the level of business activity, thus contributing more to national income. The more sophisticated SMEs can provide inputs that big companies would otherwise have to import or buy from other big firms.
The free e-book 101 Tips for your business in 2011 is available for downloading at my blog, or email me to get a copy. Our business plan writing classes start on February 19, you may also get full details by email.
About the AuthorPhillip Chichoni is a business planning consultant who works with SMEs and entrepreneurs. His e-mail address is [email protected].
