eBusiness Weekly
Kudzai Mubaiwa
The last year was a significant one for those running small businesses in Zimbabwe. Technology, economics, politics and policy, combined in making it one of the most dynamic years yet, demanding that the enterprise owner be versatile in the environment. What started off as a normal year with some optimism due to perceived positive international engagement ended on a very dire note for most with major changes in operations. We take a look at some of the major occurrences and highlight some things to look out for in this New Year, using a generalised Strengths, Weaknesses, Opportunities, Challenges (SWOC) analysis of small businesses in Zimbabwe.
Strengths
Resilience is widely touted as a Zimbabwean thing, our people are known to stay resolute and make it work under the harshest of conditions. It could be a weakness but in the context of enterprise and entrepreneurship it is a sure strength.
In 2018 this was displayed and I was extremely fascinated following the movements of those who sell pre-loved clothing, known as mabhero. In spite of the many machinations against them, they would relocate and customers would follow them, even a wholesale cleansing in the CBD did not deter them, they would emerge after office hours at or near former locations and trade as usual.
Indeed flexibility and dexterity are important for business success and our people have that in abundance, they learnt to adapt quickly or face extinction. It is interesting that at the beginning of the year many would not accept Ecocash and by the close of the year, any payment method was acceptable even for low value items like fruit sold at the corner.
With our economic situation, more of that ability to move quickly will be required in 2019 as the year will be equally dynamic.
Weaknesses
Perhaps the greatest of our small business weaknesses has been and remains the inability to innovate. Many of our small businesspeople see an idea someone else is running with and pretty much copy and replicate without necessarily adding value. Doing what others are doing is alright as a starting point but one should then add some personality and uniqueness to the business activity to suit their customer profiles.
Another huge issue has been the slowness to formalise which limits the capacity to grow or scale. Many enterprises are owner run and they are not keen on registering as a proper company, getting a company bank account, signing up for tax. They may have great quality products and services but are not able to go beyond a certain reach.
Tied to this is worsening customer service standards and some big businesses are implicated here too, it seems businesses are not serious about quality service unless pressed.
Finally, many businesses are overpricing. While they may plead policy weaknesses and harsh economic environment, some still add a “greed premium” on top then wonder why turnover is low. These issues need to be fixed in 2019.
Opportunities
Technology and the opportunity of the internet are the greatest for small businesses owners. Convergence is increasing and it is becoming easier to leverage technology for selling things — think about the many active “bidding wars” groups on Facebook and the WhatsApp groups for specific products, payments — think about the huge success that mobile money has been.
Many entrepreneurs complain about access to working capital. A local bank has just launched an innovation that enables micro-loans for micro-entrepreneurs and if this scales then it will be a sure game-changer in oiling everyday business.
But more importantly is the fact that our economy is (somewhat informally) dollarising while most Zimbabweans do not have access to dollars but earn in bond. They still need to buy goods and use services and smart local businesses that can manufacture using local products will have a definite market for tangible goods as well as necessary services.
Import substitution will save many companies if they place themselves well in the market. I am aware of a young man who invested in a machine and started making tomato sauce in the second half of the year and can hardly keep up with demand now because his small business is selling a quality but affordable product in the bond that people have access to.
Many households now prefer local detergents and food — there are opportunities for local brands to rise because they are what the masses can afford. Position your company for 2019 to provide the alternatives to imported goods.
Challenges
Without a doubt the challenges will remain. The macro environment is still somewhat uneasy after the October monetary policy pronouncements that triggered prices racing. Dollarisation is steadily occurring and this will affect those that trade in imported goods or produce using imported components. Policy direction has been given through the papers shared in the last quarter, including the national budget and the transitional stability plan but they are only as good as how they are interpreted by business and already we see that some have come up with their internal rates of the dollar to the bond veiled as “discounts”. Pricing will certainly be a big issue. A conversation with a small-scale miner recently had him indicate that all he would want is to have access to all the foreign currency that he generates when he produces.
Exporters all feel the same way and indeed there is need for Government to allow banks to handle this aspect and let the market lead while they provide an enabling environment only.
But, should this not happen quickly or at all, the savvy business owner must stay abreast of the facts in 2019 and brace themselves for a turbulent ride.
What 2018 did was to begin to bring us all to a reality that we cannot forever continue on discounted pricing that is not reflective of the state of our economy, and hopefully 2019 will have us locate ourselves where we ought to be as a nation.
Profit can still be attained in such an environment, if anything, greater opportunity lies where there is seemingly chaos and disorder. The market is disrupting pronouncements and small business owners will need to be strong, quick and fair to stay in the game. If you made it in 2018 you can further consolidate in 2019.
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