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8 things that kill SMEs


Everybody who builds a new company hopes that it will live to serve them and future generations. Nobody builds a company with the intention of closing it down. However, research shows that most small companies close before their 5th birthday. So, what leads to such high rates of failure?

Below are 8 things that kill SMEs:

The wrong face at the front desk

The person sitting at the front desk is the face of the company. What they know, what they tell clients, and how they treat people making inquiries can either bring you clients or chase them away.

Depending on the industry, you can have either a man or woman sitting there. While many ladies apply for this job ‘because I have a pretty face’, it takes more than a pretty face to open doors to clients.

A smile is very important, as everybody who walks in should feel welcomed. However, what they say when asked about the company matters.

The person sitting at the front desk should also be a qualified salesperson, a competent customer solutions agent who knows how to sign up and retain clients.

Men like to hit up on reception girls, and even people who want to transact with your company often ask them out just to get to know more about the company.

Imagine one being asked ‘So what do you do there?’ and she says ‘Leave that job alone. It’s sooo boring I’m just in it for the money.’

Unfortunately, this happens more often than not.

In addition, there are those receptionists who tell every visitor ‘The boss is not in’ even those who booked an appointment during your networking golf sessions. Of course, you will never get to know how many people asked for you or were turned away because the receptionist does not remember what time they came in.

Need I mention those ones who are always chewing gum, reading a book, or listening to some piece of music and refuse to face up when a client enters?

Incompetent workers

There is nothing as dangerous as somebody who has no idea what they are supposed to be doing. Companies hire in order to have a certain task done. If the person given that mandate cannot deliver, then there is a problem.

Yes, you are paying your employees for their time, but that time should be spend fulfilling their JD.

People invest a lot of time rehearsing for interviews. Even college students have learned to hire career coaches to write application letters and CVs for them, as well as coach them on how to pass an interview.

Practical interviews are usually the best, but still porous enough to let incompetent workers in. Should this happen, I have learned that you need to make your judgment quickly. If an employee does not deliver or meet expectations during their first week, you need to fix it immediately.

Uncommitted workers

There is still a crop of employees who believe that working for the government is all about reporting to work and collecting a paycheck every day until pension comes. Yes, some governments work that way. But if you run an SME, this will not work for you.

Work with people who love what they do and have goals they are pursuing. It could be starting a family, enrolling for further studies, traveling the world, saving for a car or house among others.

Dangerous is an employee who has no goals or vision in life. They stay with their parents, even at 35, and laugh at their friends who rent a single room in an informal settlement.

Taking responsibility can make employees committed, and this is why some companies only hire married people who are raising children. These are people with family goals that involve money, and cannot afford to mess up their jobs.

I have seen a crop of employees who update their job seeker profile salary expectations immediately after securing a new job; they are always seeking greener pastures. They learn one skill at the new office but don’t wait to master anything before they could start sending out applications for the next job.

Others work only a day or week to learn something new then move on. This is especially rampant among creatives who run their own companies, have a freelancing side gig, or want to start their own venture.

Look for the restlessness clue in candidates when recruiting.

Unprofessionalism and poor office culture

What are the working hours? Do employees spend that time discharging their duties or doing their own things at work?

Research says that the average employee works only 5 hours a day then spends the rest on social media.

This is why some companies do not allow employees to carry their mobile phones.

Theft of company money is also an infectious culture that can bring down an empire.

Consider this; suppliers bring you goods on credit, you sell and instead of paying for those goods, your workers help themselves with it.

A boss who also picks money from the company without any plan is no different from employees who steal from it.

In addition, a boss who gives employees alcohol, or drinks in the office cannot fire employees who drink at work, come to work drunk or even help one with a drinking problem.

I’m not saying that you should not treat your employees sometimes, but find a better way or environment.

Moreover, it is very evil to give a hungry employee alcohol when food is what they require. Give them alcohol and other extravagant treats when you are certain they are happy with their salaries.

Similarly, all work and no play makes Jack sick. Give employees time to work and rest. I have seen companies that do not allow employees to get into the office early or leave late. And working overtime unnecessarily and habitually affects their performance score.

Employees who do not take time off to rest and refuel will soon become unproductive and useless to the company.

Do not overwork them because they need that energy for their next job or gig in life.

Poor organisational structure

If you have many levels of reporting, employees will have a long journey when giving ideas. Consider what happens to a repeated word – it obviously gets altered.

If a word passes through 3 people before reaching you, you may never even get to hear it.

One thing I have also observed is that the work of middle managers is to kill ideas by their juniors, if not own them.

I once had a colleague who asked me, “What do you think I feel when you give new ideas yet you found me here?” Thankfully, my ideas were not supposed to go through her.

However, I have seen first-hand employees report to their immediate supervisors, giving all ideas that were killed there and then without even a second thought.

Adopt a lean structure; it will take you far.

Poor work ethic

What are the things that make you too busy to do your work? Do you find yourself unable to conduct simple supervisory work, unable to keep in touch with your clients and operations? Do you have processes that you never supervise and thus don’t even know how much sales you are making in a day, week, or month?

There are many employers who just collect the money and leave without doing any math and eventually bankrupt their companies.

What time do you get to work, and what do you do when you get there? It is a bad habit to engage in practices you wouldn’t if you were an employee. Such as drinking in the office, chatting or just watching TV instead of building your company.

Having a bigmouth

Many businesses have been plunged by the owner’s big mouth.

They say old money is quiet, but new money very loud. When you make little money, it is not a warranty for you to rush to the TV to make announcements about how successful you are.

In addition, many business founders are just following the money, and once they hear a certain business is doing well they will all flood there.

Ensure you have made enough money before calling competitors on yourself.

Moreover, we are living in times where people say all sorts of bad things to school children who are announced top in their class. When they find out how much money you are making, they start digging in to find the source of every single cent you’ve ever had. Any misdeed you might have engaged in, even long before making that money, becomes grounds for attack.

Don’t get me wrong; the media is important when it comes to publicity. Being featured on media will help you get known and thus expand your market share, but don’t do it blindly.

Most importantly, keep your mouth shut about your plans. The worst thing that could happen to you is having a close ally you confide in who cannot keep their mouth shut; they will be stalling your projects with their bigmouth and you may never even get to know.

Wastage and poor planning

Most entrepreneurs are big spenders. Businessmen and company owners are the ones running the sex industry. They cannot wait to spend their money on hookers, alcohol, and other unnecessary luxuries.

It is important to reward yourself but think about tomorrow. If for instance you collect money every day and spend it as it comes, what will you do the day client will not buy? Will you go hungry or have something to cushion you through the day?

During the COVID pandemic, we saw very many big businesses go under. We all thought they had money, but their coffers were empty and their wheels running on loans they could not pay when disaster struck.

Do not spend money or go into debt unnecessarily. Most importantly, think about tomorrow.

Study the times; know when to spend and when to withhold.

In conclusion, smart hiring is one of the best ways to cushion an SME from an early death. Building your company past the 5-year mark requires commitment from your side, your employees, and a lot of discipline.

Do you run an SME? Share your experience in the comments box or on email.