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Empowering Small Businesses for Big Impact

Hilary Kwofie


In developed countries, small businesses contribute about 55% of the economies’ total output (GDP). Evidently, they are very essential for the growth of the economy, especially in capitalist nations. According to the World Trade Organisation, small and medium businesses are not only important but they are the economy itself. Their importance is attributed to the fact that they are sources of innovation and employ about 60 - 70% of the global human population (The Foundation for Economies Worldwide Is Small Business, 2019). Small businesses face a myriad of unique problems that impede their growth and sustainability. To solve these challenges, consultants need to provide bespoke solutions tailored to the nature and circumstances of the business. As you read on, this article will discuss such unique challenges and tailored approaches consultants can use to help small enterprises grow sustainably.


All businesses have one main problem which is how to use resources optimally to maximise returns. Nonetheless, small-scale businesses often face unique challenges such as the rising cost of supplies due to economic instability, inflation, and cost constraints. Many businesses have limited access to capital and infrastructure which impedes their expansion and sustainability during economic fluctuations. Keeping up with the changing trends in technology can also be daunting for small businesses due to limited human and physical capital. Factors like geopolitical tensions such as the ongoing Russia and Ukraine affect small businesses operating internationally (Young, 2024). Unfavourable policies that increase trade barriers also stifle the growth of small businesses globally (Nina & Nina, 2023). Since we cannot fit round pegs into square holes, consultants need to conduct interviews with small business stakeholders to understand each business's unique challenges. Then use contingency approaches to solve small business problems. These situational solutions can be broadly divided into four sections, solutions pertaining to growth strategies, operational efficiency, financial planning, and market positioning.


Growth Strategies


Small businesses on the path to sustainable growth need solutions that contain the right mix of innovation, adaptability, and continuous growth. Consultants can observe the organisational cultures within small businesses and prescribe ways to change this culture to improve the business’ output. An example of one such company that changed its culture for the better is Southwest Airlines. Southwest Airlines created policies that seek to put its employees first. They knew that by making their employees more committed to the company, the output would improve (Robertson, 2023).


Moreover, consultants can guide small businesses on strategic partnerships to increase their returns. Strategic mergers allow businesses to gain larger market shares and higher returns. In November 2017, Airtel and Millicom, the parent company of Tigo Ghana, announced that they had merged into a 50/50 joint entity. This brought the best of both companies together and made them the second-largest mobile network operator in Ghana known as “AirtelTigo” (Okine, 2017). AirtelTigo now serves about 10 million subscribers with revenues close to $300 million (Abdul-Nasser, 2023). To make this growth sustainable, consultants can ensure that small businesses operate efficiently.


Operational Efficiency


The sustainable growth of businesses lies in the optimization of resource use and operational efficiency. Studies show that companies with optimised operations increase their profitability by 15% (Doherty et al., 2023). Consultants can identify bottlenecks in small business operations through data analysis and propose solutions that leverage technology, especially for repetitive tasks such as inventory management. These are cost-cutting opportunities that would improve bottom lines and leave more resources for the firm to use for investments. (Xconsultant.Ai, 2024).


Additionally, consultants can also help small businesses define and redefine their key performance indicators (KPIs), such as employee turnover rates. These KPIs must align with the businesses’ objectives and provide a framework for monitoring and evaluating the progress of the businesses. For instance, rather than small businesses relying on traditional performance assessments like annual employee reviews conducted once a year, they can adopt AI-powered KPIs that provide continuous appraisals. After ensuring that clients operate efficiently, consultants should help their clients, the small businesses, to plan financially for the future.


Financial Planning


Financial management is key for every business since many businesses operate to make a profit. Consultants can provide financial expertise in terms of tax planning. Obeying the tax laws of the country a company is located in and if the company is international, the tax laws of other countries can be dicey. Consultants can help small businesses to navigate these laws, and help them take advantage of legal tax deductions and incentives.


Moreover, consultants can assist time-constrained small-business-owners with their expansion. Business expansions take a lot of planning and capital. This can take a toll on the business owner. An example is FTI Consulting’s assistance with Viaplay. Viaplay, a Nordic media and entertainment company, has recently faced financial difficulties and hired FTI Consulting to secure its finances. Viaplay planned to expand internationally in terms of its streaming but ended up being buried in debt of up to 14.6 billion kroner. With the help of FTI Consulting, Viaplay has unveiled a restructuring plan. This plan consists of raising 4 billion Swedish kroner in new equity, writing down 2 billion kroner, and renegotiating the rest of the 14.6 billion kroner. Viaplay is set to improve its finances dramatically for the future (Consultancy.eu, 2024).


Market Positioning


An effective market positioning strategy also involves branding and marketing. Consultants can guide small businesses in creating a compelling brand identity and a consistent brand message that resonates with their target audience. This can include everything from logo design and website development to social media strategies and content marketing. For example, Nike's success is often attributed to its strong brand identity and marketing campaigns that focus on inspiration and innovation.


In addition, consultants can assist small businesses in leveraging digital marketing to reach a wider audience. This includes search engine optimization (SEO), pay-per-click (PPC) advertising, and email marketing. These strategies can significantly enhance the online presence of small businesses and drive customer engagement and sales.


Conclusion


In conclusion, small businesses are indeed the backbone of the global economy, and their growth is vital for economic stability and development. By addressing their unique challenges with tailored approaches to growth strategies, operational efficiency, financial planning, and market positioning, consultants can help these businesses achieve sustainable growth and long-term success.


References


Abdul-Nasser, A. (2023, June 22). AirtelTigo – a goldmine of lessons in strategic marketing in Ghana. LinkedIn.com. Retrieved June 22, 2024, from https://www.linkedin.com/pulse/airteltigo-goldmine-lessons-strategic-marketin g-ghana-alidu/


Consultancy.eu. (2024, January 12). Viaplay lenders working with FTI Consulting on securing finances. Consultancy.eu. https://www.consultancy.eu/news/9595/viaplay-lenders-working-with-fti-cons ulting-on-securing-finances


Doherty, R., Kampel, C., Pérez, L., & Rehm, W. (2023, August 9). The triple play: Growth, profit, and sustainability. McKinsey & Company. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-ins ights/the-triple-play-growth-profit-and-sustainability https://www.linkedin.com/pulse/airteltigo-goldmine-lessons-strategic-marketing-ghan a-alidu/


J, T. (2023, June 8). Business Consulting: How to improve efficiency and Drive growth. LinkedIn.com. Retrieved June 23, 2024, from https://www.linkedin.com/pulse/business-consulting-how-improve-efficiencydrive-tiara-jamison-pmp-/


Krohnfeldt, J. (2023, May 1). How financial advisors can help small business. Investopedia.https://www.investopedia.com/articles/fa-profession/092516/fina ncial-advisors-should-cater-small-business-needs.asp


Meinzahn. (n.d.). What Do Small Businesses Need? | Yale Insights[Photograph].Getty Images. https://www.nytimes.com/interactive/2019/world/year-in-pictures.html


Nina, E., & Nina, E. (2023, June 8). Opportunities and Challenges for Small and Medium Enterprises (SMEs) - International Trade Council. International Trade Council - Solving trade-related issues. https://tradecouncil.org/opportunities-and-challenges-for-small-and-medium-e nterprises-smes/


Okine, C. B. (2017, March 8). Airtel/tiGO merger to bring value to customers. Graphic Online. https://www.graphic.com.gh/business/business-news/airtel-tigo-merger-to-brin g-value-to-customers.html


Robertson, K. (2023, October 23). 3 inspiring organizational culture change examples. The Predictive Index. https://www.predictiveindex.com/blog/organizational-culture-change-example s/


The foundation for economies worldwide is small business. (2019, June 26). IFAC. https://www.ifac.org/knowledge-gateway/discussion/foundation-economies-w orldwide-small-business-0


Xconsultant.Ai. (2024, March 22). Small Business Consulting: Tailoring consulting strategies for growth. Medium. https://medium.com/@10xConsultant.ai/sbusiness-consulting-tailoring-consult ing-strategies-for-growth-bfc75dcd2ba3


Young, H. (2024, March 27). Small business challenges in 2024. Startups.co.uk. https://startups.co.uk/news/small-business-challenges-2024


Cover Image: (Meinzahan, n.d)


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