It’s often said that the first few years in business are a real test of survival, and the figures bandied about for the failure rates of new businesses can be alarming.
Studies indicate that significant numbers fail before or by their first year of operation, and that nearly half will go under within five years.
Our readers participated in a short anonymous snapshot survey on the challenges of their early years in business in Sierra Leone. Seventy- five percent of respondents had set up or run an SME in Sierra Leone.
The greatest challenge our readers faced was the skills’ gap – untrained/ unskilled staff was a problem for 75% of respondents. Unreliable access to power came in second, with 54% of respondents citing it as a problem. Tied with the power problem, was disruption caused by disease or epidemic – unsurprising because of our recent Ebola epidemic. Access to finance came in at third place. A surprising number of respondents also struggled with insufficient business or management experience. Most were able to weather legislative changes, and finding suitable premises did not pose too much of a problem either.
Our readers proved to be a robust lot and followed a range of strategies to transcend their start up challenges.
An encouraging 48% invested in staff training. The same percentage looked for alternative forms of finance. Almost 22% diversified their services or markets. Thirteen percent exited from old markets and/or business activities. We did not ask whether they went on to pursue alternative forms of entrepreneurship.
Making changes to the supply chain or forming a new business was a relatively popular solution at just over 17%. Almost 9% reduced their range of goods and services.