Kumaran Padayachee, CEO of Spartan SME Finance says, “the current challenging economic conditions make it important for entrepreneurs to constantly evolve ‘to meet the climate of the day’”.
It is his view that the economic climate creates an environment for true entrepreneurs to survive by learning and evolving.
He advises entrepreneurs to focus on the strength of their business model and, how they apply themselves as “the jockey” or entrepreneur.
Model and Climate –
Mohamed El-Erian says in “Learn from the Springboks” that “whether they realize it or not, a growing number of countries, companies and individuals risk being turned into underdogs by developments they cannot control in the global economy. To win in such an environment, they need to go well beyond their usual game plan to better understand the changed circumstances, develop greater flexibility to respond and bounce boldly on the opportunities that arise. In doing so, they will be deploying the trifecta of resilience, optionality and agility that South Africa demonstrated is so crucial for winning.”
Unpacking the trifecta that “economic entities need to navigate today’s unusually uncertain world” –
Resilience – Anchored by strong balance sheets, few debt maturity and currency mismatches and high cash flow and reserves, allow businesses to stay in the game even if they make a mistake.
Optionality – Anchored by forward-looking scenario analysis, creative thinking and more open-minded operating approaches, it allows business owners to evolve their reasoning and make mid-course adjustments as facts and signals becoming clearer.
Agility – It allows business owners to strike when opportunities arise.
Padayachee says “there is a lot of distress in our economy at a micro level, making funders a bit jittery, which directly impacts the SME sector, making their job twice as hard to be able to strive ahead, navigate through these turbulent times, and find ways to grow during this period.”
He says that compounding the problem even further for SMEs who need working capital to grow, is that funders are understandably sceptical, and “a little more discerning about who they are entrusting funds to right now”.
Funders need to know that their money is safe. They need to be able to trust in you and your business model going forward. And this trust is not only about cash flow forecasts.
Looking at your historical performance means very little when funders need assurance about your future, and the ever-changing environment. They need assurance that your model is solid. That your model is resilient, and allows for optionality and agility.
When last did you check the strength of your business model –
Is your strategy and business model still compelling enough to compete in a changed and tough economy?
How did you check that strength?
Did you get input from other business owners? Other industries?
How do you apply yourself as “the jockey” or entrepreneur?
How do you convince your funders/future funders that their money is safe, and with you as “the jockey”?
At The Alternative Board® we believe we have the model and the system that address all of the above topics.
The Alternative Board® has proven successful in 19 countries since 1990, and is rated number 1 in the world, and our business owners stay with us for 4,5 years.
In 2018 South Africa became the 20th country.
We establish peer advisory boards by bringing together business owners and decision-makers, from non-competing industries, together in a confidential and small group setting, assisting each other to address real-life challenges and opportunities we each face in our businesses – similar to a board of directors for large businesses and corporates.
Accountability and measurement are done via our Business Builder’s Blueprint®.
Our Business Builder’s Blueprint® measures and continually increases the strength of your business model. It helps business owners plan for developments they cannot control; assists them to better understand the changed circumstances and develop greater flexibility to respond and bounce boldly on the opportunities.
Our dynamic Business Builder’s Blueprint® helps our business owners to stay in the game even if they make a mistake. Forward-looking scenario analysis, coupled with encouraged creative thinking and more open-minded operating approaches allow them to evolve their reasoning. Making mid-course adjustments as facts and signals becoming clearer, and striking when opportunities arise, are done with measured and scenario-analysed confidence.
Plans are useless –
To quote Dwight D. Eisenhower – “In preparing for battle I have always found that plans are useless, but planning is indispensable”.
Plans are based on what we know and can think of. Planning is what happens in reality.
Our business owners go well beyond their usual game plan. They execute and adjust their strategic plan with resilience, optionality, and agility, planning the whole time.
Our business owners are indeed “the jockeys” of their businesses.
With everything in written format and being “jockeyed” with agility, our business owners give comfort to their funders.