Boosting your SME’s stability and profitability during election 2024
As Ghana approaches the highly anticipated elections on December 7, 2024, the political climate is heating up. For small and medium-sized businesses (SMEs), this period often presents both opportunities and uncertainties.
From changes in consumer behaviour to the knock-on effects of political promises and legislation, the election season can have a significant impact on businesses’ bottom lines. Ghanaian SMEs, which are the backbone of the economy, must navigate this season with caution and strategic foresight in order to remain stable and grow despite potential disruption.
This article discusses practical strategies for SMEs to weather the storm of election excitement while capitalising on the opportunities that arise during this critical period.
Diversify Revenue Streams
Relying on a single product, service, or client is particularly risky during an election year. To avoid potential revenue declines, SMEs should diversify their offerings. For example, a printing company that primarily serves corporate clients could also produce flyers and banners for political campaigns.
Similarly, food suppliers might broaden their offerings by catering for protests and events. This diversity not only expands market reach but also provides a financial cushion against volatility in core revenue streams. Furthermore, entering new markets or offering complementary products may create additional revenue streams. By diversifying, SMEs strengthen their resilience and are better positioned to capitalise on new opportunities that arise during the unpredictable climate of an election season.
Improve cash flow management
Effective cash flow management is crucial during uncertain times. To increase financial flexibility, SMEs should focus on collecting outstanding payments and renegotiating vendor terms.
Building a cash reserve can protect against delayed customer payments and unforeseen expenses. Leveraging digital tools, such as accounting software, allows organisations to monitor cash flow accurately, analyse patterns, and estimate future needs.
These preemptive steps promote financial stability and help SMEs confidently navigate uncertainty, enabling them to continue operating smoothly even during difficult times.
Build strong customer relationships
Building strong customer relationships is vital for SMEs during challenging times, as loyal customers provide reliable support. Engaging clients with personalised communication, loyalty programmes, and exceptional service ensures repeat business and builds confidence.
Social media platforms offer an excellent opportunity to stay connected and reassure clients that the business is ready to serve them flawlessly, even in the face of adversity. For example, posting messages like “We’re here for you, no matter what!” can strengthen loyalty and trust.
By prioritising customer needs and maintaining open, empathetic communication, SMEs can solidify their customer base, enhance their brand, and navigate uncertain periods with resilience.
Secure supply chains
Election-related uncertainty can disrupt supply chains, leading to delays and increased costs. To avoid shortages, SMEs should identify alternative suppliers in advance and stock essential products.
Despite logistical challenges, a retail business can ensure sufficient inventory to meet customer demand. Building strong relationships with suppliers and negotiating favourable terms can reduce risks and maintain stability.
By taking these steps, SMEs can maintain smooth operations, meet customer expectations, and effectively address supply chain issues during the election season.
Develop a contingency plan.
In uncertain times, having a robust contingency plan is essential for SMEs. This plan should outline how the business will respond to challenges such as power outages, roadblocks, and sudden fluctuations in customer demand.
For example, a logistics company could plan alternative delivery routes to ensure timely service during political events or disturbances.
Similarly, businesses can identify critical operations that need continuous support and allocate resources accordingly. Regularly reviewing and updating the contingency plan ensures its relevance and effectiveness. By staying prepared and adaptable, SMEs can minimise disruptions, maintain operations, and respond swiftly to unforeseen events during uncertain periods.
Conclusion
The December 2024 elections present a mix of challenges and opportunities for Ghanaian small and medium-sized enterprises. SMEs can survive and thrive during this period by diversifying revenue streams, managing cash flow effectively, fostering strong customer relationships, safeguarding supply chains, and developing contingency plans.
While election fervour may create uncertainty, it also provides an opportunity for businesses to demonstrate resilience, adaptability, and creativity. With the right measures in place, Ghanaian SMEs can maintain stability and continue to make a significant contribution to the country’s economy, regardless of the political climate.
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The writer of this article, Dr Andrews Ayiku, is a lecturer at the University of Professional Studies Accra (UPSA), he doubles as SME Industry Coach Coordinator (MBA Impact Entrepreneurship and Innovation).