5 Business Improvement Tips for MSMEs

Finding ways to improve your business is an ongoing journey for every entrepreneur. No matter how small or big your business is from a roadside stall or market vendor to a café, tailoring shop, or tourism operator, there is always room for improvement.

This article explores five business tips that could help your Micro, Small, and Medium Enterprise (MSME) find improvements. There are many more, but these five are a great place to start.

 

1.     Be clear on your purpose

2.     Know your customer

3.     Price correctly

4.     Be efficient

5.     Be consistent

 

1. Be clear on your purpose

When you are not clear on your business purpose, it becomes hard for others, including your customers, employees, and suppliers, to understand and support what you are trying to achieve. A lack of clarity can easily lead to distractions and lost focus.

There may be more than one objective as part of your purpose however every business should have an objective to be profitable. Without profits a business will not be sustainable and will eventually go out of business.

But profit is not the sole objective, you may have personal objectives such as providing future security for your family, be independent and not work for others, follow your entrepreneurial passion, or your product or service can make a positive difference in your community.

To help define your purpose, ask yourself these questions.

• What do I want to achieve from being in business?
• Why do I want to be in this industry or sell these products or services?
• When I leave this business, what will I be proud to have achieved?

When you have your purpose, write it down. It can be as short as one sentence or take a whole page. Then show it to other people and ask them if it makes sense. Is it clear what you are trying to do with your business? Once you’re confident about it, share it with the people who will help you achieve that purpose.

 

2. Know your customer

Not everyone is your customer. Some people prefer your products or services over others because of the quality, price, speed of service, location, look and feel, or simply how it makes them feel. These people make up your target market and understanding them helps you tailor your products and marketing to meet their needs.

Think about your target market, are they:

• Young, middle-aged, or older?
• Male or female?
•  iTaukei, Indo-Fijian, or from another cultural background?
•  Living in rural areas, towns, or outer islands?
• Are they working, students, or stay-at-home parents?
• Are they from low, middle, or high-income households?
• Do they travel by boat, bus, car, or walk to your business?
•  What language do they speak? mainly English, iTaukei, or Hindi?

The more you understand your customers, the easier it becomes to create the right products and advertise effectively. You learn a lot about your customers by observing their buying habits, asking for feedback, or conducting short surveys where possible. You could also talk to suppliers or community members who know your market well.

 

3. Price correctly

When pricing your goods or services, there are three things you should consider.

 

How much does it cost you?

You need to know how much it costs you to deliver your goods or services to ensure you do not price below this. You should consider all your costs including marketing and overheads to get a clear picture of what your price should not go below.

 

How much are competitors charging?

What competitors charge gives customers a perception of what price they should be paying. When looking at competitors pricing, consider who their target market is and what benefits the customers are paying for.

 

How much are your customers willing to pay?

This is the most important question. Is your product or service perceived as worth more or less than your competitors? Price accordingly.

 

Here are a few other points to consider:

• Believe in your product and its value. Your belief will help you maintain prices.
• It’s easier to start at a high price and adjust downward than to raise prices later.
• Review your prices regularly to keep up with increasing costs.
• Avoid heavy discounting unless it makes business sense.
• Try to work out how much you would need to sell to maintain your profit.

 

4. Be efficient

Efficiencies can generally be found in every part of your business. From purchasing to the types of equipment, to systems and procedures, marketing, personnel, stock management, and the list goes on.

Not everything can be improved at once, accept this and set in place a continuous improvement program where you are always looking for ways to improve. Where do you start? Listen and look. Customer and staff complaints can often give you clues on where you may be able to improve efficiencies. Look at your financial statements and other productivity measurements you may have in the business. Walk around the business and see if there are any holdups, blockages, or unused or underutilised space or equipment. Investigate any rework and why it needs to be done.

Once you have a list of potential efficiency improvements, you then need to prioritise them in your order of importance. The ones at the top of the list are the ones you will work on first. 

For each improvement area you are going to work on, set up a plan. What is the objective and how will you measure it to know it has worked? For example, improve customer wait time by 10 minutes to 5 minutes within three months. Create an action plan, assign responsibilities, and track progress. Review your efficiency list every few months and celebrate what’s improved and refocus where needed.

Efficiency doesn’t mean rushing, it means being smart with your resources.

 

5. Be consistent

Customers value consistency and like to know that the quality, service and experience will be the same every time they purchase. And, if they recommend your business to friends or family, they will get the same value. You need to ensure you do things the same way again and again. Consistency comes from having clear systems, policies, and procedures in place.

These help you to:

• help to embed efficiencies into your business,
• provide the basis for training new employees consistently and getting them up to speed quickly,
• free up your time by allowing you to delegate, and
• reduce rework and wastage.

 

Being consistent does not mean being stagnant. Customers change over time, as does technology. By continuously looking at ways to improve your business, you can make changes that maintain the value customers are receiving and improve your business at the same time.

 

Your business matters

MSMEs make up a large part of Fiji’s economy, employing approximately 60% of the labour force and contributing significantly to the nation’s Gross Domestic Product (GDP). In addition, the United Nations has called out MSME’s contribution to sustainable development and the global economy and set aside a day to raise public awareness. he importance of MSMEs cannot be underestimated and by finding ways to improve your business, it not only benefits you, but your business will continue to support Fiji and the world.