Why most companies are failing in Zimbabwe.

Why most companies are failing in Zimbabwe.

How you can avoid business failure.

By Richard Fani

Why are most companies failing in Zimbabwe?

There are various reasons which are causing businesses to fail in the modern day Zimbabwe. These reasons include the economic instability of the country, lack of creativity and innovation, the failure to establish real brand equity, copycats among many others. Although some of the causes of failure in business may be avoided, there are some which are beyond the business owner’s control.

Entrepreneurs are lacking the ability to adapt to the changes of the times. There is continuous upgrading of technology every day, old systems are being replaced by new ones. It is very essential that entrepreneurs should hire people who can help in identifying and educate them about the importance of technology. Econet Zimbabwe provides a level of creativity and adaptability that I absolutely salute. This always gives the company an upper hand against competitors in their area of operation. Zimpost has failed to adjust to its glory days before technology became part of our lives through the use of text messages, social networks and other media of communications. National Railways of Zimbabwe is also another typical example of what lack of creativity and innovation can do in each and every functioning system which fails to see beyond today.

You can’t stop technology but you can harness it for your own advantage.

Competition is a part of business. It will always be there. Competition comes in different forms therefore there is need for business owners to look closely at competitors and their activities; observe and learn how your competitors work. What can you adapt and what can you regard as your strength against them. As an entrepreneur you must aim to have a competitive advantage in your market, this can be gained through value proposition, benefit of product/service, quality, quantity, service delivery among others. Competition, if left unchecked can cause serious harm to your business.

However, you should understand that your primary goal in the business is to serve your customers not fighting competitors. I’ve seen some entrepreneurs who lose more revenue because they want to be better than their competitors and so they have forgotten that they have a needs and wants to serve.

Net one recently launched One Money. If you haven’t heard about this service yet where have you been? They’ve been using every sought of advertising media, road shows among many others just to ensure that we all become aware of this new service. Some brands are so rare that you wonder how they are surviving without being known in their area of operation. Many entrepreneurs thinks that it requires millions of dollars to create brand awareness in the mind of customers, but not really. Strategic planning is all that is required. As for small business owners, you simply have to look closely to your area of operation. Make sure that the people close to you are aware of your product/service. There are various ways that can be used to create brand awareness even with a tiny budget these include; word of mouth, fliers, stickers, building of online presence, asking for referrals from existing customers and so forth and forth.

Surely your business should not fail because of these simple factors. Take the step and be known by all your potential customers.

No business plan. No future projections. No marketing plan. No budget for the coming year, you name the rest. This is how a lot of SMEs are operating and one wonders why many of these businesses are not growing or why their rate of failing is greater than their rate succeeding.

Failing to plan is like planning to fail. You will be shocked to hear that someone who has been running a small business for more than three years has no idea about his/her company’s cash flow. Ask sole proprietors near you, which products are more profitable in their shops, if you get answers from 3 out 10 of them in less than 10seconds you give me a call. Take time when planning, I mean enough time, make sure you have planned every stage of your business so you’ll not be distracted by surprises.

Most entrepreneurs have no clue of what is happening in their target market. They have no idea how their potential customers think, where they are, what they use in place of their product/service or to some extent how much are their competitors are charging for the same product/service.

Business owners are simply ignorant of the external factors that may affect their business. Studying the market and understanding the needs, wants and demands of the customers is what differentiate businesses.

The economic instability of the country has impacted most businesses negatively, the continuous cash shortages also being the major reason affecting SMEs to a greater extent. Adaptability to the things that are beyond our control can save many SMEs today, looking for alternatives to alter cash shortages being the first method of adapting like ensuring they get the POS machines or merchant codes as most transactions are being carried by cell phones and debit cards.

In the late 2017 prices hyped up in one day with no single warning. This caused many businesses to temporary close down and some retailers regulated the sale of some other products with fear of making loses as the public panicked and resulted to impulse buying. Also the issue of bond notes has negatively affected many businesses big or small. The stronger will survive to tell the tale in the next few years. The most affected are those who import goods from other countries as they have to sell their goods with local currency whilst they need to obtain the continuously scarce foreign currency (US Dollar) or they may access it from forex traders in the streets who are charging huge amounts of interest.

Basically the changes in the macro environment are beyond the entrepreneurs control, therefore this requires the government to ensure that the conditions becomes conducive to easy flow of business. 

For more info regarding this article and other Marketing Articles contact Richard Fani on email: fanibrichard@gmail.com or call or text on +263771683561, +263737774408. You can also follow Richard Fani on Social Media Twitter and Instagram @richardfani263 Facebook Page @richardfani263.

Richard Fani is a Marketing Consultant, and is the founder of FUNGA Holdings, a marketing firm based in Harare. He is also the Public Officer of COPNECT Investments, a contracting company which is also based in Harare.