Morogoro — SMALL and Medium Entrepreneurs (SMEs) have been challenged to find ways of raising their own capital instead asking for cash handouts.
The challenge was thrown here over the weekend by Small and Medium Enterprises Competitiveness Facility (SCF) Director, Mr Casmir Makoye when closing a week-long training for a third batch of 100 food processors for SMEs Chief Executive Officers and their staff. He said that entrepreneurs need to develop confidence among them, using their own businesses to expand.
"The challenge that food processing SMEs are facing such as lack of working capital can be easily addressed by entrepreneurs themselves. They must chart out strategies on how they can raise capital instead of complaining that they have been neglected", he said. Mr Makoye said that capital expansion is only possible if an entrepreneur develops a proper business plan which depends greatly on well-mannered financial management practice.
He said the training has helped the entrepreneurs to tackle challenges that dwarf their capital, hence suppressing growth of their business. "Various research studies and my experience working with SMEs for many years show that working capital expansion in such businesses greatly depends on the initiatives of the owner," said Mr Makoye.
He urged the entrepreneurs to develop a culture of seeking a professional help from experts as well as employing experienced workforce instead of going for cheap and none experienced ones. "Worse, some employ relatives who become quite hard to handle and fail to hold them accountable for the lapses that may occur in the course of carrying out their assignments. This is a bad practice for a business to grow", he said.
He told the participants that financial discipline is also key, adding that a clear line must be drawn between family and running of a business. "You need to ask for professional advice and stop treating your business as a family entity. In a very short period, you will see your capital volume growing," Mr Makoye said.
One of the participants, Director and founder of Ring Investment, Mr Theogen Bana said the training has exposed him to better knowledge of doing business. "The training has helped me understand how to calculate cost of doing business, what kind of loan an entrepreneur needs to go for, market positioning, how to improve quality of products to meet market and quality standards and how to identify markets. I am very happy," he said.
Grace Mushi, a Production Manager at SADO Farm in Dar es Salaam, said before the seminar, she was applying traditional methods in purchasing and keeping records. "I am a better manager after this training," she said. The tailor-made training targeted over 100 SMEs in food processing industry.
It aims to equip participants with business management skills to be able to compete locally and internationally. The training was conducted by experts from the Sokoine University of Agriculture- Department of Agricultural Economics and Agribusiness (SUA - DAEA) under the auspices of (Sokoine University of Agriculture - Bureau of Agricultural Consultancies and Advisory Services (SUA BACAS).
SCF had early this year introduced a Point of Sales (POS) database which is now available for food processors in the country at a cost of 100 US dollars (about 170,000/-). The database seeks to help food processors access crucial market information that will assist them to increase their sales volumes.