As the year 2022 came to a turbulent end globally, 2023 started on the same or an even higher note – and the International Monetary Fund (IMF) has warned of a global recession hitting more than one-third of the world’s economy in 2023 amid tougher economic times.
In Ghana, the year 2022 was characterised by hyperinflation, a fast-depreciating Ghana cedi against major trading currencies, high fuel prices, debt exchange programmes resulting in ‘haircuts’, and a high cost of living among others. And so, to have the prediction of tougher economic times in 2023 than last year is simply a prediction of doom.
The nature and scale of current economic mismanagement and challenges have not spared anyone – and governments, individuals and businesses are activating all arsenals in their survival kits to quiet the storm and stay afloat. While no guarantee of the likelihood for success of any strategy can be made, some to-do lists are imperative should businesses – especially start-ups and small and medium-sized enterprises (SMEs) – envisage any chance of staying operational during and beyond 2023.
The purpose of this article is to provide a top-10 to-do list that can be incorporated into the resilience and growth plans for Startups and SMEs for the year 2023. We contend that should businesses realign their work plans considering the 10 must-do’s, there will be a higher chance of remaining competitive and sustainable beyond the current economic turbulence – as many businesses may not survive 2023.
The 2023 top-10 to-do list for Startups and SMEs
The top-10 to-do list’s arrangement for discussion is not in any order of importance or priority. Equally, they may not be applicable to all forms of business operations – although their applicability is relevant and representative of the majority of Startups and SMEs in Ghana. As they are prescriptive in nature, we strongly recommend their adoption in line with individual business assessment, strategy and operational understanding.
More importantly, founders and managers must ensure the full alignment and buy-in of all stakeholders – including employees, shareholders, suppliers, customers, etc. – into any final work plan that may be informed by these recommendations before implementation.
- Identify, Understand and Focus on ‘Pain Points’
You have a business when the solution you are providing, either as a product or service, is addressing an identifiable problem. So, while the pursuit of your passion is good, your solution must necessarily be addressing some ‘pain points’ for an identifiable group of persons to qualify as a business. Therefore, at every stage of your business, you must intentionally be assessing your attempts to understand and focus on providing solutions to the identified ‘pain points’ – should you miss this, note that your business won’t grow beyond the curve.
Understanding what your customers need and realising the urgency to innovate solutions can help you refine your product or service to meet their preferences and requirements. A satisfied customer will have a direct impact on your revenues.
While the process of truly understanding customer ‘pain points’ may be cumbersome and costly, you cannot discount it and produce just any product or provide mediocre service and expect customers to accept and adopt same. No customer is ready to help you satisfy your curiosity unless your product or service meets his or her needs – and in turbulent economic times with less disposable income, people are prioritising solving their problems at the functional level.
Therefore, in 2023 it is important for entrepreneurs to rededicate their efforts to truly provide solutions which address ‘pain points’ for customers; and where such solutions have become accepted by customers, efforts must be focused on simplifying their delivery in the most convenient and cost-effective manner.
- Improve Regulatory Compliance Culture
All business forms and operations are permitted by law. By this, the law mandates some general and specific regulatory demands which businesses must comply with to facilitate their operations and existence as legally recognised businesses. These regulatory demands include business form registrations and compliance with annual filing requirements; registration with other secondary statutory bodies for the payment of tax, pension and other obligations; and licencing and acquisition of permits for operational activities, among others.
The mandatory nature of regulatory demands implies that non-compliance cannot be countenanced should one desire to operate a legally-compliant business. To forestall non-compliance, the law has established some far-reaching sanction regimes to deal with non-compliance: including business closures, payment of fines, criminal prosecution, etc.
Businesses that take regulatory compliance seriously – e.g., the acquisition and renewal of permits and licences, filing annual returns, payment of tax and pension obligations, renewal of annual registrations, etc. – demonstrate a high level of operational competence and are much more attractive to investors, creditors and other stakeholders.
Further, regulatory compliance helps businesses in minimising risks by preventing avoidable events such as closures, blacklisting etc. from detrimentally affecting their operations.
The benefits of regulatory compliance are unmatched, and businesses must undertake regulatory audits of their operations to understand the full scope of regulatory demands on their operations; and then institute measures to build a compliance culture that meets all demands. While we contend regulatory compliance is expensive, non-compliance is not the alternative – as without being compliant one cannot be said to have a business. To have a business is to have a compliant business – nothing less.
- Hire Highly-Skilled Professionals and Promote a Culture of Diversity
We cannot overemphasise the importance of a company’s quality of workforce to its operational successes or failures. Entrepreneurs do not make the best products or provide the best service simply because of the number of employees they have. It is the quality reflected in the skill, competence and professionalism of one’s workforce that greatly influences success.
To recruit, train and retain a team that constitutes a highly skilled workforce is expensive; and in difficult economic times such as now, it is more expensive to engage in such unavoidable necessities as businesses. Nonetheless, the deliberateness required for this is non-negotiable. Every entrepreneur must prioritise the workforce demands of his or her enterprise, and ensure only highly skilled and qualified professionals are recruited, supported and retained to help the business remain competitive in its product or service delivery.
Skill assessments must be conducted, and critical skills and/or gaps identified. Competence and skills should never be rationalised for cost, or persons put into roles as a cost-saving measure. Always remember the ultimate benefits must be weighed in terms of performance, output and deliverables; and where rightly assessed, the outturn from engaging the right workforce is justified in the long run.
Further, make it a policy to pursue a diverse leadership team – which allows for more in-depth insights, higher workforce engagement and better decision-making through inclusive leadership.
- Leverage Digital Marketing Tools
It is incumbent on Startups and SMEs to leverage digital marketing and content creation for their advantage. We live in the Internet era, wherein companies can afford to promote their products and services online mostly for free. While traditional marketing is associated with high costs, digital marketing is considered a more viable option for small businesses wanting to cut down costs.
Various digital marketing tools and platforms exist for use: such as Facebook, Instagram, WhatsApp, YouTube, Email Marketing, Snapchat, TikTok and Websites among others.
Startups and SMEs can also adopt the concept of Search Engine Optimisation (SEO), which will allow them to keep their websites ranked top in the search engines for relevant keywords. These relatively free marketing and awareness creation tools and platforms can help promote brand and product/service awareness, which may lead to increased sales or patronage.
Further, digital marketing platforms offer a fast and real-time opportunity for addressing customer complaints and concerns; and businesses must leverage it to drive customer service, research, competition assessment and other customer engagement activities such as promotions.
- Encourage Remote Working Culture
Post the Covid-19 pandemic peak, the adoption rate for remote working culture has increased significantly, and in most industries become the norm rather than the exception. This emerging trend of work culture has enormous benefits for companies and employees when properly assessed and strategically deployed. The 9 to 5 work from a physical office location is shifting to working remotely with clearly agreed deliverables.
Today, businesses can be run in a hybrid form – online and offline. And as technology continues to permeate all aspects of our everyday life coupled with improved Internet accessibility, it has become easier for employees to work from home.
Remote working not only helps in improving work-life balance but also has the additional benefit of increasing productivity and innovation by cutting down operating costs, since fewer employees are physically present at the office and using office supplies, computers and work desks. Specifically, remote work eliminates overhead costs like rent expenses, office furnishings, utilities, insurance, supplies, upkeep and repair – fees which can escalate quickly if not monitored.
Therefore – if your business operation permits – pilot remote working as a hybrid, and adopt it full scale to save some operational costs while helping your workforce save on cost of transportation and associated risks of moving to a physical office each working day.
- Practice Outsourcing
In order for a Startup or SME to stay ahead of the curve, it must think and operate outside the box. One way of doing this is to seriously consider outsourcing part of or full business operations to competent 3rd party service providers. Some 3rd party companies have built operational competencies in the production or rendering of services a Startup or SME might be struggling to produce or offer. There is no need mastering imperfections, and owners must start identifying competitive 3rd party service providers to outsource part or a full complement of their production or service offering at agreed fees.
This will allow the businesses to focus on what they can truly deliver exceptionally while others produce or render complementary components of their products or services. Investing in outsourcing helps Startups save money, keep projects on track and smartly manage time. The time and money saved from outsourcing can be better utilised by Startups and SMEs to focus on core activities and ensure the growth and development of their operations.
Activities and tasks such as accounting, payroll management, legal services and other specific product or service components can be outsourced.
- Invest in the automation of your operations
Yes, your product can best be delivered through the laborious long hours of manual production processes – and you may be thinking there is no other way to deliver quality.
I kid you not, most production processes have been automated and enhanced to deliver quality products in the most efficient and effective manner. Therefore, do not be fixated on the novel engineering process you innovated to produce the first set of your product/s and be determined to stick to the same as part of your heritage or tradition.
Technological advances are ensuring manual processes are digitised and embedded with the same production procedures to achieve greater results. The advances have led to simplified production processes using fewer humans; thus reducing the amount of time and effort required to complete a task while reducing operational costs, improving speed and efficiency, and ultimately ensuring traceability and product quality.
So, business owners must seek process-improvements which streamline processes, functions, procedures and get rid of repetitive tasks performed by humans to improve operational efficiency, reduce the risk of errors and build competencies. Automation is becoming the bedrock of any mass production activity, and businesses must prioritise its implementation to reduce production and operational losses occasioned by over-reliance on the human workforce.
- Pay attention to ESG considerations
Environmental, Social and Governance (ESG) considerations are becoming critical in business practices globally. The growing ESG adoption is to ensure sustainable business practices are entrenched in business operations and rally business commitments toward emerging issues affecting our world: such as protection of the environment, promotion of inclusive leadership, and the empowerment of women among others.
Within the ESG framework, its measure of environmental compliance is the extent of a company’s environmental footprint. It assesses how a company engages, for instance, in waste disposal, reduction of carbon emissions, and compliance with national environmental protection laws and regulations among others.
The social standards examine the relationship between a company and its employees as relates to workplace attrition, workplace safety, commensurate remuneration, complaint procedures, dispute resolution mechanisms, and the employment of local people.
The governance framework meanwhile focuses on the internal workings of a company: such as composition of the board of directors, the rights of shareholders, anti-corruption and bribery practices, etc.
Compliance with ESG consideration will become essential and mandatory for business operations going forward. Therefore, business owners and managers must begin paying attention to their adoption relative to their operational area – compliance opens the door to new funding opportunities and new markets.
- Diversify funding sources
Access to finance and credit will continue to be a major challenge for Startups and SMEs this year. The cost of accessing traditional financing options such as loans, credits, etc. will even be higher, and many businesses may not be able to access them. This means businesses must pursue other cheaper, more patient and longer-term sources of funding for their operations.
These options include equity, SAFE, and convertible loan/debt arrangements which allow funders’ immediate conversion of participation interest in the Startup or SME. Nonetheless, the nature of business activities, financial and operational track-records, and the general investment interest may influence the opportunity to secure these alternative means of funding. Others may include credit sourcing arrangements and pre-financing of contract orders, among others.
Business owners must appreciate the need to look for alternative funding based on the competitiveness of their operation, and break their overreliance on traditional financing options.
- Be a good corporate citizen
Times are undeniably hard and will get tougher for businesses. Likewise, these are difficult times for many individuals – especially the less privileged in society. Means of survival have been hampered by the current economic difficulties, leaving many struggling to provide for the basic needs of life.
During moments like this, Startups and SMEs have the power to leverage their corporate social responsibility programmes toward good causes. Such support programmes can help foster strong brand and product equities with the general consumer population.
The benefits of supporting others cannot be discounted, and business owners must endeavor to roll out initiatives that promote community support and build a good corporate citizenship profile for their businesses. These initiatives can be supported through various funding means: such as a share of profit contribution, the share of selling price contribution, or through employee contribution schemes. In difficult times, businesses must stand up for the community and its people.
Conclusion
We are in for a prolonged period of economic uncertainty. And the predicted outlook for the year 2023 is not a great one for Startups and SMEs in general. Therefore, business owners and managers must embrace initiatives that help support their resilience plans during these difficult times, and the top-10 to-do list recommended in this article is worth considering.
>>>Richard Nunekpeku is the Managing Partner of Sustineri Attorneys PRUC (www.sustineriattorneys.com) a client-centric law firm specialising in transactions, corporate legal services, dispute resolutions and tax. He also heads the firm’s Startups, Fintech and Innovations Practice division. He welcomes views on this article at [email protected]
Harold Kwabena Fearon is a Trainee Associate at Sustineri Attorneys PRUC with its Corporate, Governance and Transactions Practice Group, specialising in legal service provision for Startups/SMEs, Fintechs and Innovations. He welcomes views on this article via [email protected]
