MOST Zambian small businesses have been experiencing stunted growth due to lack of adequate financial capital.
My observation is that in as much as individual business and marketing proposals could be brilliant, implementation of the business growth strategies are in most cases hampered by the failure by businesses or companies to secure financial resources required to successfully carry out the desired activities.
In most cases, this is attributed to poor marketing abilities among many business men and women.
However, for marketing oriented companies, the lack of financial muscle should not be used as an excuse for lack of growth.
There many alternatives for recapitalisation ranging from bank business loans to other micro-finance solutions.
Nevertheless, in this week’s deliberation, I would like us to look at the concept of strategic alliances and partnerships as a means of overcoming financial recapitalisation challenges.
It is very common in small businesses to find people working in partnerships where more than one individual come together by way of pulling their resources together in order to accomplish their business objectives.
This approach to doing business is wise for people with business plans but with financial constraints.
Some Zambian business analysts and academicians have for some time now been pointing out that the biggest challenge most up-coming entrepreneurs’ face is in financing their business projects.
I have been interacting and listening to some relatives and friends expressing brilliant business ideas and lament how due to the lack of money, their ideas and plans have only ended up being castles in the air.
Upon having broadly analysed the situation myself, I have come to draw the conclusion that contrarily to the general assertions and opinion, the problem that most upcoming businesses or entrepreneurs have is not their lack of financial capital, but rather the lack of skills and ability to effectively market their business plans or proposals to prospective funders or partners.
Remember the basic principle of marketing is the marketing mix.
As I have always stated, marketing is a cross cutting discipline which is applicable in every business scenario.
Having a good business proposal or plan alone will not always guarantee you business success; hence we now refer to marketable business proposals as bankable documents. In business, every shareholder wants to be assured that they will eventually get their return on investment or capital employed in business.
A bankable proposal should therefore give the confidence to would-be funders that its profits projections will be attainable. It should espouse a good marketing strategy which clearly outlines the nature of the business or product, such as is there a ready market or demand? Pricing mechanisms, distribution strategies and promotional strategies.
You may agree that accessing what are now being called Youth Empowerment Funds is not as easy as the publicity has made it sound.
There are thousands of unemployed youths across the country with bankable business and project plans waiting to be assisted with the finances.
Given this kind of situation, it would not be advisable for all upcoming businesses or entrepreneurs to join in this long queue of financial seekers, other alternatives should be identified.
The opening up of world markets and the transformation of the international markets into the global village now implies that alliances and business partnerships are the best option for financially challenged businesses or companies wishing to expand or to grow their businesses.
Using this strategy,smaller companies and businesses are able to ride on the back of financially viable businesses and brands,such strategic partnerships are proving to be very effective for small companies aspiring for growth and for big well established firms looking to expand and have some presence innew markets.
More than 10 years ago, the Chinese government through the Zambian Government introduced the Zambia, China Business Forum where a number of Zambian business men and women where invited to China to so that they could interact with their Chinese counterparts and explore opportunities for strategic alliances and partnerships.
Following this development, we have begun to witness a good number of Zambian SMEs forge ties with some Chinese businesses and companies who have realised that there was a ready market for most of their products.
Incidentally, we now have some Zambian companies have entering into dealership arrangements, where the company becomes the official representative or business agent of some big and well established company or brand. This is becoming prominent in industrial equipment and technology products.
There are many benefits of getting into strategic partnerships. Among the many benefits are reduced or minimal costs for conducting marketing research or market surveys, as this is usually carried out by the local partner on behalf of the foreign partner, reduced marketing expenditure since the local business partner may use its own marketing personnel to promote the new products.
For most upcoming businesses, it is clear that there will always be those challenges I have alluded to. The bottom line is to be able to utilise the available options and strategic alliances or partnerships.
(The author is a consultant in marketing, public relations and customer service)
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