Small and medium enterprises (SMEs) have so far contributed an astounding 43.31% to Nigeria’s Gross Domestic Product (GDP) in 2022. This growth was facilitated in part by the COVID-19 pandemic, which saw more businesses springing up to meet new needs. We’re truly in a world where the growth of SMEs is on an exciting upwards trajectory and are expected to create at least 90% of new jobs by 2030.
However, the fast rise of SMEs also gives room for growth myths that are at the very core untrue. In this post, we aim to bust a couple of them.
1. No need to worry about cash flow as long as you make sales
While sales are an essential metric for SMEs, tracking cash flow is crucial. Sales only show how much money comes into the company. This might lull you into a false sense of progress. Tracking cash flow shows you how much money comes in and goes out of your business. It also shows you where the money is coming from or going to and patterns you may need to monitor. For example, if a supplier is spending money weekly on truck repairs, it might be time to plan for a new truck. Or find a better mechanic.
2. The first business to open shop wins
The first-mover advantage is real. However, being the first to launch a product or service does not mean total ownership of the market. For example, the first true wireless earbuds didn’t start with the Apple AirPods but rather with the Onkyo W800BT developed in 2015. This is the reality. Other businesses can overtake the first-mover by improving their products/services and making them cheaper.
3. Business owners don’t need rest
This myth is deeply entrenched in business lore. Business owners are expected to work 24/7 and 7 days a week. The fact is that business owners are not machines. Even machines need to be turned off from time to time to achieve maximum productivity. Running a business can be stressful and some of it is unavoidable. Especially with SMEs where the owner wears multiple hats. A shrewd SME owner knows when to unplug and take a rest.
P.S: Here’s an extra myth – that you don’t need Pivo Business to scale your supply chain SME. Not true! Sign up today to enjoy all the financial services you need to grow your business.
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