What is the one major problem facing SMEs now?

 Cash flow problems

The economy is going through a recession, which seems to have worsened in the past two months. Consumer spending has declined significantly since May. All types of businesses are seeing reduced spending: retail, manufacturing, distribution, entertainment, services, clothing- even informal traders are reporting bad business performance. One of the main causes of this decline is reduction in government expenditure. Government is the biggest contributor to the economy. If it reduces its spending, the effect hits all sectors of the economy.

Many small business owners are finding themselves stuck with unmoving stocks, huge outstanding debts, overdue bills and impatient creditors. It will not be a surprise if some companies close down or are liquidated in the coming months as business conditions become tougher.

As we approach the end of the month, many business owners start experiencing high stress levels as there is simply not enough money to pay salaries, rentals, creditors and suppliers.

These are very dire and unusual times. They call for business unusual.  Entrepreneurs who continue doing things the way they have been doing them in the past will close shop or be left behind. To quote Tom Peters in his book Thriving on chaos, “entrepreneurs need crisp thinking in the war zone.” The amazing thing about hard times is that they bring out the genius in true entrepreneurs.

What can you, as an entrepreneur and business owner, do to stay afloat and ahead in this chaos of economic meltdown?

Don’t miss my instalment on Tuesday where I will share some tips gleaned from those who are thriving, not in spite of, but because of the slow economy.

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One Response to “What is the one major problem facing SMEs now?”

  1. kumbirai jona gusha Says:

    you have become a fountain of hope and priceless yet free business wisdom.i can only wish you well and encourage doubting Thomases to try you,the rest will be history.Keep doing what you are doing,you are such an inspiration.

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