Ghana is currently going through an economic crisis. Our country has turned to the IMF for a bailout for about the 17th time. In times of such economic crisis, small business owners in Ghana face unique challenges that require resilience, adaptability, and innovative thinking.
With Ghana seeking financial assistance from the International Monetary Fund (IMF) once again, it is crucial for entrepreneurs to equip themselves with the right mindset and strategies to thrive during troubled economic times.
This blog post aims to provide small business owners in Ghana with practical insights and guidance on how to succeed in the midst of an economic crisis, drawing from traits, skills, and knowledge that can contribute to their resilience and long-term success.
The Power of Resilience
Resilience serves as the cornerstone of success for small business owners in challenging economic climates. To be resilient means to have the ability to bounce back or recover quickly from setbacks, challenges, or adversity.
Resilience is the capacity to withstand and adapt to difficult or stressful situations while maintaining a positive attitude and continuing to move forward. Resilience involves being flexible, resourceful, and having the mental and emotional strength to overcome obstacles.
In a difficult economy, it is crucial for Ghanaian entrepreneurs to be resilient, stay positive, and be open to adjusting their strategies and business models as needed.
When sales go down, you should be able to regulate your emotions, stay calm under pressure, and avoid being overwhelmed by negative emotions or making rash decisions.
In Ghana, most negative emotions about the economy come from political party statements on radio & TV and political news commentators on social media. I hardly pay attention to any of these.
See, no matter how bad our economy is getting, Nigerians, Lebanese, Chinese, and many other foreigners love doing business in Ghana. If only you can change your perspective and see things differently as an entrepreneur, you would be able to stay positive.
If you can see what such foreigners see in Ghana, you wouldn’t be emotionally charged against any party or individual. But would stay motivated regardless of the tough economic situation.
What are setbacks supposed to do? They are to hold you back. But would you allow anything to stop you? Winners never quit. Quitters never win.
Besides, resilient people view setbacks and failures as learning experiences. They see them as opportunities to grow, develop new skills, and gain valuable insights.
Rather than becoming discouraged, use setbacks as stepping stones toward future success. Hence, use the country’s economic setbacks to set your business up for success.
Financial Management Skills
Strong financial management skills are essential during tough economic times. Entrepreneurs should have a solid understanding of budgeting, cash flow management, and cost control. It’s important to closely monitor expenses, find ways to optimize resources, and make informed financial decisions.
What do we always complain about concerning our government? Corruption, wasting of money during general and bye-elections, misplaced priorities, and so forth. I want you to take a moment to think about all the wrong things our government is/has been doing. List all of what they are supposed to do and what they should not be doing. Then ask yourself whether you are guilty of similar things in your business.
For example, if you do not like the fact that taxes are high, ask yourself whether you are unnecessarily overpricing your goods and services. If you expect the government to cut down on certain expenditures, ask yourself whether you should be doing the same in your business. Public finance and business finance have similar concepts. Do not lament about the government when you are doing the same practices in your business.
Financial literacy is critical for small business owners to navigate economic crises successfully. Your cash flow statement, profit and loss statement, balance sheet, and so on should be monitored closely. Moreover, seek professional advice if necessary.
When it comes to budgeting, I was discussing with one of my clients that for anything I buy in dollars, I always budget 1 USD=GHC50. That way, no matter how high the dollar will rise, it is still within my budget for the year. There are some factors I cannot control, I do not intend to worry about them or let them negatively impact my business. If I do not prepare for the worst, I am preparing my business to be in the worst condition.
You need to understand financial concepts, especially those that have direct bearings on your business. And prepare and/or adjust when the economy gets tough.
In times of economic crisis, the ability to adapt becomes paramount. As a small business owner, be open to change, explore new markets, diversify your offerings, and leverage digital platforms to reach a wider customer base.
When it comes to change, it is a constant factor. However, people do not like to change. The way things were before will not remain the same forever. There will always be change. If you always prefer how things were before, you are putting your business at risk. Do not put old wine in new wineskins. When the environment changes, change accordingly.
There are four ways a business grows: 1) producing new products in an existing market, 2) venturing into a new market with an old product, 3) increasing market share in an existing market with an old product, and 4) entering a new market with an old product.
Now that you are aware of this, act like a prudent businessperson. Here, the term “market” can mean target audience or geographical location.
For example, let’s say you sell high-quality shoes to middle-income people. In such a difficult economic situation, you can create a new shoe design and sell to your target audience, 2) start targeting high-income people with your shoes or reach out to people in another country to sell to them too, 3) attempt strategies that will help you gain more customers from your competitors, or 4) sell a new shoe design to poorer people in Ghana or people living in another country.
In addition, these are the times that you need to double up your efforts on digital marketing. That is your content-creating marketing on your website, social media accounts, and ads on these platforms should not be treated lightly.
It is cheaper to run an online business via website and social media than to own a physical shop. So if it is possible, do your best to make the best out of digital marketing. That would mean you learn the basics so you can get it right.
Navigating an economic crisis requires small business owners in Ghana to possess a unique set of traits, skills, and knowledge. By embracing resilience, adaptability, and innovation, entrepreneurs can position themselves for success even in challenging economic times.
Developing financial literacy, leveraging networking and collaboration opportunities, staying informed about market trends, and prioritizing customer focus are key strategies for thriving amidst an economic crisis.
Moreover, continuous learning, embracing partnerships, and finding a support system can provide invaluable guidance and motivation. By implementing these approaches, small business owners can turn adversity into opportunity and emerge stronger in the face of economic challenges.