“While all roads lead somewhere, sometimes somewhere is just another kind of nowhere”Cheshire Cat.
The strategic objective of this piece is to emphasis the importance of strategy and strategic planning for Micro, Small and Medium Enterprise (MSMEs), to put the conversation on the imperative of strategy and strategic planning on the front burner of enterprise promotion and development and to encourage MSME operators to imbibe the orientation and culture of mainstreaming strategic thinking and planning as an integral component of doing business.
Strategic planning is a business growth strategy for all categories of business but there is a prevalent misconception among Micro, Small and Medium Enterprise (MSME) Operators that only big corporations require strategies. There are currently no national statistical data to determine the actual percentage of MSMEs that develop and implement business strategies.
Most MSMEs are known to have their business strategies in their heads and so they employ the “rule of thumb” and “optical sizing” approach in conducting their business endeavours.This obviously explains why there is a high rate of enterprise mortality. Available statistics from various studies indicate that 85% of businesses die within five years.It is therefore safe to infer that the orientation and culture of developing and implementing functionalbusiness strategiesthat facilitate enterprise growth is still at the lowest ebb with MSMEs.
Understandably, MSMEs are burdened by so many constraints part of which is their inability to source for and engage the services of competent and dedicated manpower to internally help attend to and effectively handle some critical components of their businesses as well as lack the resources to invest in research and development.
Be that as it may, MSMEs need to recognizeand understand that planning to manage and grow a business successfully is not a matter of choice but a critical decision upon which the survival and growth of the business is premised. MSMEs needs to as a matter of necessity find time to be thoughtful about the future of their business.
Though the prevailing situation may be somewhat precarious and worrisome, it is not all gloom and doom.
Business is a War and a Game of Strategies
Wars like Games are fought and won only by those who are able to analyse, articulate, plan and execute better strategies.War and Game Strategists do not wait until they get to the frontlines before planning strategies to outdo their opponents. At the frontlines however, strategies can be subjected to reviews to effectively and efficiently respond to unforeseen and emerging realities.
War and Game Strategists invest tremendous resources in human resource and time to painstakingly isolate the issues of critical concerns, analysis, articulate and plan wining strategies well ahead of time to take their opponents head-on with the ultimate objective of wining.War strategies involves both kinetics and non-kinetics, offensive or defensive tactics.
It established that there is a very close correlation between War and Business because at the core of War and Business is the concerted effort to outdo and win adversaries or competitors and to actualize those objectives requires strategies to achieve expected outcomes.
Sentiments and frivolities are not in the War and Game equations. This philosophy also applies to businesses.To succeed in business is a function of a clear vision, sheer passion, determination, dedication, total commitment and hard-work.
The Market Place is War Zone
The market place is synonymous to a War zone where different business operators competing for market share are always striving to evolve both offensive and defensive strategies to outwit each other.
The intensity of the intrigues associated with outdoing each other in the market place, breedsintense competition. Apparently, competitions can be so stiff that only businesses with the right strategies and competitive advantage can survive.
Business like a War and a competitive Game involves a complex process of evolving technical and tactical strategies that facilitate the realisation of Organisational objectives and goals.
Any business that wants to not only survive but remain competitive in the somewhat hostile business operating environment must evolve strategies that will help them achieve their goals.
What then is Strategy and why should it matter to MSMEs?
As it relates to MSMEs, Strategy is all about planning for the future of their businesses.Businesses are commercial enterprises that are established to achieve specific objectives of providing products or services with the ultimate objective ofmaking profit and MSMEs requires strategies to actualize their business goals.
A strategy provides specific answers to the Why, What, When and the How factors of the business.A Strategy gives a clear expression to the vision, mission and objectives of a business. It is unambiguously expressed in a document and specify specific action steps that are needed to be taken with key performance indicators and timelines as a guide to measuring and evaluating progress.
Generally speaking, a strategy is a clearly well-articulated roadmap that explains how a business will cope with or respond to operational uncertainties and the action steps that will be taken towards achieving the long-term objectives of the business.
Topical areas requiring strategic planning for and MSMEs includes Corporate of Organizational, Personnel, Production/Operational, Financial, Regulatory, Market Share and Customer acquisition.
Importance of Strategy to MSMEs
Obviously, no one sets out on a journey without a clear idea of his destination and how he intends to get there. Strategy is the roadmap that shows the pathway to that destination and how to get there for a business.
Apparently, no business as a going concern can survive the uncertainties and hostilities of the business operating environment without a clearly defined roadmap that will help them navigate through the complexities and turbulence associated with doing business.
Strategies facilitates the ease of doing business and enhances the operational efficiency and productivity of a business, it reduces losses and increases profitability.Apparently, studies indicates that effective and efficient strategies well implemented determines the survival, sustainable development and growth of the business.
The Art of Strategic Planning for MSMEs
Like every other necessary skill that an average entrepreneuris expected and encouraged to acquire, strategic plan development and implementation skill is one critical skill that enterprise operators as a matter of necessity needs to acquire and build the capacity needed to developstrategic plan for their businesses and in the event, that this may pose some level of difficulty for enterprise operators, MSMEs may consider engaging the services of Business Development Experts.
Strategic planning is required from the inception of the business to the delivery of the product or service. Interestingly, there are a plethora of strategic planning tools that have developed for each component of a business for which enterprise operators can leverage.
The critical imperative is that MSMEs must ensure that whatever strategy that is needed to be developed must be SMART. Effective and efficient strategies must be SMART. in other words, strategies must be specific, measurable, achievable, relevant, and timely.SMART strategies facilitatethe observation of the market, identify weaknesses and strengths, track progress, and indicate areas for improvement, which can help make all the difference in business development and growth.
Though there are numerous strategy development tools, here are a few that may be relevant to MSMEs.
SWOT Analysis
SWOT Analysis is a primary internal strategy development tool for any business. It is involves understanding the;
Strength of the Organization as it relates to what the business can do well, the biggest advantage at the business disposal, most valuable assets and resources and what the potential customer will identify and perceive as the unique strength of the organization.
Weaknesses of the Organization as it relates to the potential vulnerability of the enterprise, what it does not have, what it can do better, industry trends, how it can enhance production efficiency with what technology, customers and competitors etc.
Opportunities that align with the vision of the organization that it can take advantage of such as what customers are complaining about, shortcoming of competitors, underserved niches, emerging market demands, industry trends, technology, etc.
Threat to the organization as it relates to socioeconomic and political uncertainties, what the organization cannot do, regulatory constraints, the activities of competitors, emerging technology etc,
PESTLE Strategy
Staying abreast and sensitive to the dynamics and complexities of external factors such as the uncertainties associated with Political, Economic, Social, Technology, Legal and Environmental factors that can constitute potential threat to a business is very important to plan for by any enterprise operator.
Employee Recruitment Strategy
Every serious business requires the best hands to operationalize the vision of the organization and so human resource is key but the challenge is in how those people are sourced, engaged, compensated and inspired to do what they are employed to do.
An employee recruitment strategy is a clear plan that explains who is to be employed, for what role, why he should be employed and how.
Business Model Strategy
The financial goal of any enterprise is to make profit. A Business Model refers to the business plan of making a profit. It clearly defines the product/service, who to sell at what price, how the business will operate and generate cashflow etc. A business model is very critical to plan for by enterprise operators.
Product Development Strategy
Product development involves Design Thinking from the conceptualization of the idea to distributing to the market. For instance, what does the organization want to produce and for who to buy.
Total Quality Management Strategy
Because of the prevailing stiff competition, compliance to quality assurance as it relates to Total Quality Management (TQM) is a critical imperative that enhances competitiveness in the market place. MSMEs must as a matter of necessity ensure that their products or service offerings compliance with standards.
Market Development Strategy
The aspiration of any enterprise offering product or service is to distribute their offerings to their target market.
A market development strategy is a business growth strategy that seeks to introduce products or services to a new market.
Go-to-Market Strategy
A Go-To-Market Strategy is a product-based marketing strategy. It explains how a business will deliver its product to its target market with their unique value proposition with a competitive edge.
Dr. Peter Ayim is an Enterprise Development Expert and Principal Consultant/CEO, MSME Business Development Services Limited
