NAIROBI, Kenya, Apr 6 – Small and Medium Enterprises (SME) stand the biggest risk of failure during the on-going global recession.
Regional Manager of African Management Services Company, Kofi Andah, says adoption of best management practices will be the determinant of which SMEs survive.
“Even in good times being an SME is quite tough and in a recession it’s going to be exceedingly tougher to survive,” Mr Andah said.
He proposed that good management should involve looking out for opportunities, identifying new markets, and ensuring that you have the right people in place to see these tasks through.
He noted that despite the global recession, certain markets will open up during this period.
“There will be winners and losers and what you want to ensure is that you are among the winners. For an SME, the key will be to identify where the opportunities are being lost and snap them,” Mr Andah noted.
He said the biggest challenge for most small businesses in the country is drawing a line between ownership by virtue of starting the business and having proper management to run the business.
“The emotional attachment of most entrepreneurs makes it very difficult for them to let go of their companies when the time comes. However, the strategies for running a small company are very different compared to the ones of running a medium sized (firm),” he said.
Mr Andah points out that the high dependence on an individual in an SME to make key decisions makes it very difficult to sustain a business.
He however observed that all is not lost as regards the future of Small and Medium Enterprises in the country.
“Some of the best brand names in this world today were set up during a recession. Hewitt Packard for instance. So there is opportunity during recession the key is identifying this opportunities,” he said.