Large global organisations have been born from Africa; Shoprite, MTN, PSG to name a few. It’s almost impossible to comprehend that all these highly successful companies were once small businesses started by entrepreneurs with a drive and purpose. So why then are today’s entrepreneurs caught up in being seen to be wealthy, as opposed to building real wealth. Sustainable Wealth. The wealth that is a legacy for generations to come. The kind of legacies that economics textbooks and magazine articles get written about?
Owners of small and medium-sized businesses get stuck in the cycle of paying for the luxury home, German automobile and branded clothing. We want to be ‘seen’ and start talking about the fourth industrial revolution, without understanding that we are living through the third industrial revolution.
The rate of change in the economy has become so rapid that businesses that have the best products, well-executed marketing strategies and ample funding are fast becoming irrelevant if they cannot find agility and innovation in their sector.
The keys to growing your small or medium-sized business are simple.
It starts with identifying a need and fulfilling that need in a specific market. The trick is to scale the business model to a point where the owner is no longer the person solely responsible for all the functions of the business.
Secondly; The owner then needs to make the transition from being an entrepreneur to a business leader. The difference is that as a business leader, you’re no longer relying on entrepreneurial spirit and creativity to build a business. You are now managing systems, processes and people in order to build a high performing sustainable enterprise. Very few entrepreneurs make the switch from being an entrepreneur into a business leader and the majority that fail to make the switch, then hire competent CEO’s or managing directors to help formalize the business and put in the necessary structures. A good example of an entrepreneur that made the switch from being an entrepreneur to a business leader is Bill Gates, the founder of Microsoft who then went on to be the CEO of the large multinational business. An example of an entrepreneur that’s infamous for not transitioning into a business leader focusing on a single business is Richard Branson, who more often than not, starts different businesses and hires competent management teams to take the businesses to the next level.
Most businesses fall into the trap of becoming too comfortable, complacent even. At this point, they either stagnate or shrink and ultimately fail, or they innovate and grow. The potential risk of staying small is that your business is likely to be taken over by the bigger companies through consolidation or that you simply won’t have enough financial muscle to compete with the bigger players and as a result, it becomes almost impossible to service large orders in order to scale your business.
Lastly, businesses have to let go of the notion that there is a finish line or final destination. The perfect business moto is ‘imitate, iterate, innovate’. Once you have completed this cycle there are only two options; stagnate and die or start the entire process over again.
They MUST be agile. The only businesses that stand the test of time and are able to take on global players are those who are constantly changing and updating themselves.
With our low to zero growth economy, larger companies are often seeing a decline as opposed to growth, responsibility for stimulating growth in the economy and providing employment has fallen squarely on the shoulders of SME’s. Some have gone so far as to say that by 2030 90% of new jobs will be created by SME’s.
In a disruptive world where markets are continually changing, businesses that are not constantly evolving, innovating and reinventing themselves run the risk of being disrupted and completely taken out of the market.