SMMEs based in Johannesburg may have the skills needed for strategic business planning, but they should consider taking advantage of technology and investing in key skills to see more growth. This was revealed in a research paper published last week by the SA Journal of Entrepreneurship and Small Business Management (SAJESBM). According to the study, which investigated small, medium and micro enterprises’ strategic planning techniques in the city’s CBD post-Covid-19 lockdown, 78% of the 169 SMME owners and managers who responded, used business strategic tools like SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for their businesses.
It also revealed that 56% of the respondents reported that they used the PEST (Political, Economic, Social and Technological) analysis model on their business and that 89% of them conducted a financial analysis of their businesses. The most common strategic planning SMMEs used was the financial analysis technique.
“One can argue that financial management is the survival of the business that enables the business to plan and track its history, especially during times of crises,” the study noted. “Financial management enables the business to plan and track its history. It is also helpful to promote awareness and improve service delivery through greater collaboration and cooperation. “However, it must be observed that financial management alone does not guarantee SMMEs’ success. Some factors such as human resources contribute to the success of the SMMEs.”
The authors pointed out that techniques such as financial analysis worked best in tandem with other measures to upscale a business. “Financial management must be employed together with other strategic planning techniques so that an SMME can achieve its intended objectives during the crisis period,” the paper reads. “One can argue that the Covid-19 lockdown affected the global market trends including entry to the African market as many SMMEs failed to open because of lack of revenue.
“The quality reputation was the least affected as it was not seen as a problem by SMMEs during the lockdown, but surviving post-lockdown was identified as a challenge.” The paper pointed out that SMMEs needed to adopt digital technologies so that they could enhance their performance and productivity to deal with the effects of the pandemic. “Digital technology can assist owners, managers and supervisors of SMMEs to secure business continuity whilst improving business performance or formalising strategic planning techniques or tools,” it notes.