Business playbook: SME tips to plan, save and grow

People who take a leap of faith and start their own Small and Medium Enterprises (SMEs) will usually run into challenges, but this is all part of the journey.

Some of the businesses fail within their first year due to challenges including access to the market, costs and regulations.  

Metropolitan Head of Marketing: Product and Channel, Phumla Mavundla says consistency, amongst other factors, will get the business to success.  

Consistency is key

Mavundla says most businesses fail because the owners believe there is a quick fix to success. The key to a successful business is consistency. Business owners who usually take small but steady steps towards achieving their respective goals, end up making it. “Keep heading in the direction of your vision, and repeating until progress is made.”

Through consistency, trust will be built and trustworthy businesses are usually strong and resilient.

“Trust is not something that is built in two days, it is earned and over time. The best way to gain people’s trust is through a consistent demonstration of trustworthiness.”

ALSO READ: ‘Government initiatives alone can’t address SA’s unemployment rate’

Learn how to handle money well

She says some businesses fail because owners were irresponsible with handling the funding they received and did not know ways in which they could grow it. She is of the view many, if not all business owners, need good financial planning to successfully handle money well and to grow it.

“Too often, entrepreneurs fall into the trap of thinking about their business profits as being the money that they are making when instead, it’s far wiser to separate personal finances from the financial state of the business.”

Most business owners need to understand that their businesses’ money is separate from their money. There should be a clear indication of how much money is coming into the business and how much money is going out.

“Drawing a monthly salary is far different from taking money for your business profits,” says Mavundla.

ALSO READ: ‘It’s okay to ask for more money’: 7 steps to setting the right price as an entrepreneur

Plan with the pros

She believes having a financial adviser will help many business owners, especially during the stages of establishing the business. “There is a misconception that financial advisers are for already established business owners. However, it would help to develop a relationship with an adviser before making it big, this will help to build a strong foundation.”

Financial advisers’ role is to provide advice and guidance on every aspect related to personal and business finance. “This includes aspects like budgeting, setting financial goals, and having the right kind of insurance in place to mitigate the unique risks that face your business,” she adds.

ALSO READ: Mastering the money game: Financial tips for entrepreneurs

Think long-term

“It is important for anyone to have a vision set on having long-term success, which will lead to having a business empire.”

She reassures anyone thinking of starting an SME that every single business has the potential to turn into generational wealth. However, building generational wealth takes consistency, careful planning and time.

“You also need to consider what would happen if you pass away; how your ship will continue to sail if you’re not at the helm. You need to have a will in place. Further, the financial factors that will shape your employee value proposition – aspects like funeral policies or life cover for your employees – matter.”