Guest Contributor | Jan 17, 2023 | 0
Entrepreneurial Passion is what drives innovation during economic uncertainty
By Josef Kefas Sheehama.
Have you ever seen the phenomenon in your life? Someone faces a horrible setback in their life such as failing in business or a brutal heartbreak. For a while, they’re feeling terrible but along with time, they change and end up becoming a new, better version of themselves. They may even claim that the setback was the best thing that ever happened for them.
As Independent Economics and Business Analyst, with over 20 years of banking experience, I certainly have seen this and experienced it myself. The reason why this happens is very simple. When life hits you hard, you end up in a situation so painful, that it nearly forces you to take action and improve your life. Once you take that action, you become a better version of yourself.
But to achieve these goals, a holistic approach must be adopted by the business. This means an approach that encompasses the entirety of the business value chain, ecosystem and reaching production. Furthermore, the government of Namibia formulated and implemented a policy document known as the Industrial Policy in 2015, to turn the country into a sustainable and independent nation as stated in Vision 2030. This policy was based on the national development goals in an attempt to improve the standard of living for its citizens and it stresses the role and significance of SMEs for wealth as well as for employment creation.
At that time, SMEs’ contribution to Namibia’s Gross Domestic Product (GDP) was estimated to be 12% annually. The Industrial Policy sets the goal of SMEs creating more than 30% of job opportunities especially for the unskilled and semi-skilled workforce. It is generally known that the key fundamental drivers of sustainable prosperity are innovation and productivity growth, and their interaction. Although it must be stated that innovation is successful only with a good idea and solid efforts to convert the idea into a marketable undertaking.
Furthermore, many entrepreneurs only think of making a business plan when they are seeking funding from investors or financial institutions. However, a business plan is equally important for the benefit of the business owners. A business plan is important in exploring the feasibility of a business idea, laying strategies for the operation of the business. It is also an important tool for the valuation of a business and when recruiting major employees to the business.
Financial institutions and investors normally insist on evaluating a company’s business plan before funding either startups or established businesses. The business plan will help you to know upfront what you need in terms of resources, what you need to do to make the business progress and prosper. The plan can help you to find out if you need to acquire certain assets and if so, whether it is wiser to buy or lease such assets. A business plan will help you to understand whether a potential business idea in your mind is feasible in practice. During the marketing analysis or competitive analysis, you might find out that your business idea will not work. This can save you a lot of time and money which you would otherwise have invested in an idea that is not feasible.
Managing and establishing successful enterprises that can assist the government by creating more employment opportunities and attaining its developmental goals such as NDP5, V2030 and HPP2 remains a critical challenge for MSEs in Namibia. All financial institutions around the world can only provide funding to registered and well-directed businesses that are to return the borrowed money and realize their intended goals and objectives. In Namibia, many SMEs are operating without permanent trading addresses due to the scarcity of rental places for SMEs though the government came up with incubation centres which cannot cater for the current mushrooming and establishment of SMEs.
It is impossible to run a business without recording financial information. Business owners do not always analyze the financial performance of their business. This can often be attributed to lack of time. However, good financial information allows one to get a clearer picture of a company.
In order to sell a business, the Annual Financial Statements are very important. It also attests to the owner’s sense of business and control of business performance. This can allow the potential buyer to gain trust and confidence. Nobody would buy a house without performing an inspection first or ask the opinion of a trusted person. Once the detailed report is received, the buyer can negotiate the price of the house. It’s the same thing for decisions to be made within the company. The owner should take the time to analyze the financial statements and determine where the business makes and loses money.
In a way, the decisions for the future of his or her business depend on it. If the owner does not take the time to analyze the performance of his/her business, it will be more difficult to make informed decisions to improve the business. The Cash Flow Projection is also an important component. This allows you to make assumptions each month to know where your business stands. Depending on the outcome of your cash flow projections, you can either continue doing business as you are or realize you need to toughen up on customer payments and sell more.
In conclusion, the Namibian economy is composed of enterprises and businesses. Our economy has survived because the industry leaders had been able to adapt to the changing times. Entrepreneurship produces financial gain and keeps the economy afloat, which gives rise to the importance of innovation in entrepreneurship.
Innovation is important not just in entrepreneurship. As individuals, we are innovators by adapting well to our needs and creating our own solutions. Entrepreneurs are the same. The innovation in entrepreneurship helped the country by changing with the times and producing new products and service from ones that already exist. And, being innovative has helped us become successful in all our endeavours.
Therefore, entrepreneurs are innovators of the economy. It is not just the scientist who invents and comes up with the solutions, entrepreneurs do the same almost constantly.