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Small and Medium Scale Enterprises are the heart of the economy. But with the name, ‘small and medium scale’ comes a ton of stifling challenges even before they think of starting let alone approaching the growth phase. The big organizations, on the other hand, may or may not face these challenges, but we will be laying emphasis on small businesses alone. This article aims to point out the key challenges Small and Medium Scale Enterprises face and how to overcome them before the financial year ends.

  • Money Management

Managing money is quite an issue for individuals, as we often try to budget, save, invest, and spend at the same time. The same goes for SMEs. Money is the life of every business. With cash flow, covering your costs as a business is excellent but how you manage money determines how your business will progress. Therefore, you should outsource your money management system to a professional who can help you keep records and give professional advice so you don’t go bankrupt.

  • Burnout / Fatigue

Since SMEs are known for not having so many employees to carry out the job, there is so much pressure on the limited number of staff to deliver quality at all times. SMEs are known for working long hours and even on weekends to deliver to customers. While being customer-centric in business, it is advisable that you always take out time to relax and recuperate from stress. So take care of yourself. “Health is wealth,” they say.

  • Continuity

Businesses crash every day because they lack structure from the top. In cases where the founder cannot communicate the vision to employees and set a structure in place that helps the business thrive even when away, it shows a lack of structure and continuity. Many Small and Medium Scale Enterprises are known to operate on a sole proprietorship model. As good as it may sound, it is very unsafe. “If something happens to you tomorrow, will your business still be in existence?”
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This is a question that should always ring in the mind of business owners. If your business is sustainable and is run by you alone, it is best you start setting structures in place so that the business out-lives you.

  • Government Policies

The actions of the government can have long-term crippling effects on Small and Medium Scale Enterprises. Some Government policies are not business-friendly. Instead of creating a more stable environment in its real sense, life is made harder for them. Time and resources meant to be invested into growing the business are spent innovating around public policies to ensure the business operates by the laws and stays afloat with revenue. A typical example is the Nigerian clampdown of certain FinTech companies and the Twitter ban; the income of so many businesses who relied on them was affected.

  • Measuring Performance

Because it is a small business, they do everything that brings in profit, but there are no clear guidelines to measure productivity, performance, and future projections. Small businesses need to set out clear goals, how they intend to achieve them, and how they should be measured. This will help them focus on the things that matter.

  • Systems And Structures

SMEs are known for having a small number of people on the team, and for this reason, they tend to underplay the role of systems and structures in running the business. Building systems and Structures will help enhance the company culture and increase productivity. Small and Medium Scale Enterprises are very fragile. Like every business, it has its challenges and risks, but the ability to mitigate risks and find solutions around challenges is what makes it successful. Featured Image Source: Share Exit
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This article was first published on 11th October 2021

grace-christos

Grace Christos Is a content creator with a proven track record of success in content marketing, online reputation management, sales strategy, and so much more.

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