Monday, June 05, 2023 | Dhu al-Qaadah 15, 1444 H
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Reading ups and downs for SMEs (Part II)


We started exploring the doubts that Mahfoudha was experiencing with her SME.

A quick recap: in mid 2020 she lost her job and decided to start a food business. She signed a one-year rental agreement and cooked local food for takeaway and delivery.

After an initial exciting start, she experienced a drastic drop in number of orders. While she was worried that this could happen again this year, in my column published last week, I explained why I am confident that she should not fear a seasonal downturn.

In my analysis I shared that such a bumpy start is normal. I would add that especially for all business that have a visible shop front - if the location is strategically chosen - people passing by might be curious to try something new. However, the novelty fades quickly, and new clients are needed to continue sustaining the volume necessary to create a positive income.

Mahfoudha is just about to complete the first year of business. She shared with me that the number of daily orders is enough to cover all expenses and to generate a small salary for herself. At this point she wonders if she should continue and plan for more growth, or simply fold her business and look for a job.

For as much as I support entrepreneurship, it is impossible for me to give any advice on this question without having seen thoroughly through the books.

Business is measured in numbers even though feelings get attached to it. Mahfoudha seems to be a woman determined to succeed, and I am not sure if the doubt that she is experiencing are related to any external pressure that she is facing. Or perhaps she is just tired of working hard and not earning enough.

However, if that is the case, I would encourage her to push for more business rather than giving up. I understand her fear: renewing the rental for one more year might seem like a long commitment. An idea could be to negotiate with the landlord and agree on a lower rental.

Frankly, nobody would have imagined the pandemic to last so long, and if she leaves the store it is going to be very hard for the landlord to find a new tenant. That could alleviate the monthly burden for Mahfoudha.

On top of that, she could consider having someone to help her. If there is one ultimate advise that I could give to any entrepreneur, that is: “You cannot do everything at its best all by yourself.”

Mahfoudha is currently cooking, selling, taking pictures of her food for marketing, managing her social media, bookkeeping. Every aspect of the business is on her. Perhaps she could hire someone part time help in the kitchen to free more time for her to take care of the brand and do more marketing. Or she could hire some part time help to promote her business on social media, while she comes up with new recipes.

Basically, she needs to choose to either grow or close. Being stationary in business is not a long-term sustainability strategy. It all boils down to believe: does Mahfoudha believe that she can succeed? If the answer is yes, then this is the time to grow. Hiring some help could be the best way forward.

(The columnist is a member of the International Press Association)

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