In order for the sustainability of a small business the initial idea or business option needs to be thoroughly investigated, market research needs to be conducted and risks need to be taken. Due diligence should be given to the micro and macro environment.
Capital & Finance
An establishment to set up involves many costs, from the land/premises to machinery/equipment and basic set up costs, this are run into large expenses.
Legislation & Regulatory Requirements
Every year there seems to be more requirements that get added onto the SMME portfolio whereby businesses need to register or comply with various legislative requirements some of which include SARS, CIPC, BEE, CIBD, Department of Labour, Occupational Health and Safety, Councils of various organisations depending the field the business is in. There are numerous others too many to mention that the business need to ensure they meet on a daily and monthly basis like VAT etc.
Communication & Networking
Networking and establishing contacts with various companies is the key to developing and growing a business. Many entrepreneurs are vibrant, talkative and always communicate with various people trying to establish business links and new innovative approaches.
Position & Location
Where the business is position is critical as it is about exposure and ensuring the clients can gain easy access the premises. Many businesses are ideally situated but parking and access to them is very poor. This would deter clients from making the extra effort to get to them.
Commitment & Personal Input
Ensure employees are appointment according to merit rather than helping a friend out. Employees that are closely related to the business (in terms of friendship) they have access to more information and are privy to details that allows them to take advantage of the situation. Keep business professional and keep personal matters at bay. Ensure the all correspondence is recorded from the contract of employment to the contract with client. Information in writing has substantial influence to address any problems.
Competition & Benchmarking
Also try to determine what market is there for your product or service but do not try to compete with the biggest competitor without warranted reasons. It would be very easy for them to remove you off the market. Do not try to be in direct competition with the competitor as the focus of business would be askew; rather try to focus on improving your company performance and outcome.
Honesty & Integrity
Ensure that ethics are maintained by certifying it is done with honesty and integrity. Company should stay free from any forms of bribery and corruption as this would eventually surface and cause unnecessary problems and embarrassment.
Recruitment & Selection
The cost of recruitment is high hence select only candidates that meet the operational criteria and then interview them according to the job specifications and understand whether their skills will effectively contribute to the business. At the outset always, state the salary you wish to offer, it would be a fruitless process if that is the only criteria that cannot be agreed upon. It is beneficial for a company to recruit effectively, retain loyalty, and reward accordingly.
The style that the leaders use is critical to determine the output for the organisation. Leaders are instrumental in guiding and coaching or commanding the employees. A visionary leader will assist move or guide the staff to achieve the company goals and dreams. Without an idea of the vision and goal, employees are not motivated to achieve their best. This would hamper the end result.
Sales & Marketing
Consider the political and technological factors as they are very important to a company. Not everyone is born to sell, rather employ someone who has the skill and experience in marketing to allow your company to grow. Imagine having all the goods, potential clients but they cannot commit to you, then the company will surely fail.
All business owners have a vision of their profit so they start with the end in mind implying they focus on purely achieving their goal of making a profit. In the process, they fail to acknowledge any soft issues that are not visible to them, they only focus is purely set on achieving the ultimate goal. They fail to understand and consider the attitude, behaviour of all stakeholders as well as power and politics involved. Their hidden opponents are omitted thereby causing the company not to focus on all the variables in their quest to achieve their goals.
Logistics & Transportation
These are generally built-in costs and as a small business, these costs are astronomically high but as the company is trying to make its mark and deliver on their promise to client, these costs are difficult to incorporate in the price. Transportation or delivery cost is necessary to review prior to attaining an order.