Using old method in a small scale business (developing countries)

[BIT-BENDER]

 Small scale businesses has a high share in businesses that can be seen in nation that are developing. Small scale businesses has become many families lifeline of survival. Small scale businesses like
+ Photography
+ Tailoring
+ Food making
+ Petty trading
+ Local/unmechanized agriculture.  And more.

Their are many families doing same small scale businesses, but not as much have enough for there living nor reinvesting in the business,   is something wrong? Something is wrong!!!


I asked my colleagues the other day why he took the bus to get something he could have gotten from down the street, he answer was he gets satisfaction from the former place.
Consumer satisfaction and business ideas is not a thing for large scale businesses alone.

+ Presentation: how is your small scale business presented to people, -i find it interesting that tourist in another country enjoy to shop in local market- but no tourist would shop at a place with poor presentation, presentation doesn't have to cost a whale size sum, some can even have a quaint effect. Presentation from am attractive sign board, neat environment, crowd stopping  sct-clowning,dancing,singing-, neat and cheerful attendant so much more, will fetch your small scale businesses more customers - a very satisfied customer just like my friend-

+ Business running: some small scale business owner can't give good record/account of their business. Good method to keep record like documentation on paper, Microsoft excel and faster and easy to reconcile method.
+ Distinguish business from personal/family consumption: small scale businesses consume their goods/services making business reconciliation shabby, and if it continues the business may run down.
+ Learn: government and non governmental, online/offline program on small scale businesses, should be attended, watched/listened, to get new method/skills, knowledge to but into the small scale businesses.

[mu_enrico]

Let me help you:

Small scale businesses

Usually called Small Businesses and/or Local Businesses.

nation that are developing

Did you mean developing countries or about the growth of a country?

+ Business running: some small scale business owner can't give good record/account of their business. Good method to keep record like documentation on paper, Microsoft excel and faster and easy to reconcile method.
+ Distinguish business from personal/family consumption: small scale businesses consume their goods/services making business reconciliation shabby, and if it continues the business may run down.
+ Learn: government and non governmental, online/offline program on small scale businesses, should be attended, watched/listened, to get new method/skills, knowledge to but into the small scale businesses.

These are about bookkeeping, and I agree that in small businesses, and some medium businesses as well, they can't do proper accounting (I might be biased towards my country though).

I'll suggest one more, financial illiteracy, especially about the use of debt. Debt is the most useful source of funds for the growth of a business.

[Upgrade00]

The issue is many small and medium enterprises in developing countries are designed to simply be self sustaining and provide some profit for the owner, they ignore so many ways of scaling their business in a bid to keep it original or the fear of modernizing their modus operandi.
It's however possible to add modern ideas and get keep your business original and appealing to the locals.
A small scale tailor for example, may limit his/her designs to only those within their locality, as that's the popular design there,  limitng the business. Having an online presence could easily increase the reach of the business and force them out of their comfort zone while advertising their local designs to other regions, you can also use it as a tool to monitor the performance of your business using KPIs

But before scaling a business, it must have accurate book keeping records, and should be an entity of it's own. One of the first questions investors ask during a pitch is how has your business been managed so far and where you want to take it to.

[RealMalatesta]

Presentation: the way we present our businesses is really important. Just like restaurants, I've been to restaurants that are not kept clean and they still expect people to sit and eat in that unhealthy environment, it's really bad. And when I see places like this wherever I go, I just quickly leave. Some don't know how to present what they are marketing in a way that it looks attractive and it's really bad for them.

This matters a lot no matter what you're doing, even if it's a business that you're doing online on social media, the way your profile looks and how you arrange and present things, whether pictures you post, your bio and the rest, will determine the level of interaction you will get.

[Wexnident]

Their are many families doing same small scale businesses, but not as much have enough for there living nor reinvesting in the business,   is something wrong? Something is wrong!!!

The question is already answered by the statement itself tbh. Something is wrong, yes and that is there are too many that try to do the same business. It all comes down now to mostly the quality that each restaurant can afford. Most businesses though aren't much affected by the family thing part, that is unless, ofc, it is abused. Also, it isn't a matter of enough but rather they just make enough to come by. They aren't really able to save up more to improve their business. You can see a lot of vendors outside, taking their carts to sell all over the place ( at least in our country) and you don't really see them making major improvements.

[sunsilk]

The food making or food industry will never get old. It's there to stay and in this pandemic, a lot of small food business has been established. From food deliveries and ready-to-eat food has been raking a lot and increased its demand due to home quarantines.

Most of these small businesses doesn't actually care for records. They haven't included it from their plan and all they think of is the potential profit and its a thing that they want to do. It's normal to see for small businesses not to priority it but as they expand, they will realize how important it is.

[plvbob0070]

Those kinds of businesses really need to attract customers by providing good services even though it's just a small business to make their business successful. Some businesses can't also afford to put so much capital for their business so they can't provide everything, what matters is that they are earning. But in my country, there's a popular small business that does not really need to put so much effort into customer satisfaction yet they can still earn enough.

In the Philippines which is also a developing country, micro, and small enterprises are very popular and it takes more than 50% of MSME in the Philippines.  We have this called "sari-sari store" which means variety. It's a small scale business that you can see everywhere in the Philippines, and those things you have mentioned don't really matter for them. They don't need a good presentation because they just resell a variety of products per piece. Owners also don't need to have records or accounting knowledge because the income is not that big but is enough to feed their families and they don't need people to work for them.

It's very popular in my country, that even without those things, they can still earn enough profit and their small business can still run for years.

[so98nn]

I am from developing country as well and here are some facts about the small scale businesses in my country:

1. The local scale businesses here usually categories as grocery stores, Cake shops, medical stores (laws are different hence hundreds of stores around a small area), liquor stores, and snacks centers.

2. The SMALL scale here usually is fun thing. They are producers of different things such as chemicals, clothes (huge market), cotton, beer, Tea, pharma products, laboratories etc.

I made comparison here just to show that small scale businesses here are actually very big thing. There turnovers could be very huge.

This very different than your countries outlook where food making, agriculture etc are small scale which are local in my countries.
:-)

Small scale businesses here will surely have Chartered accountant to handle all the financial stuff. Locals will be on rough bills. !

[stompix]

Small scale businesses has a high share in businesses that can be seen in nation that are developing. Small scale businesses has become many families lifeline of survival. Small scale businesses like
+ Food making
~
+ Local/unmechanized agriculture.  And more.

Their are many families doing same small scale businesses, but not as much have enough for there living nor reinvesting in the business,   is something wrong? Something is wrong!!!

No, it is not wrong from a financial point of view, it's wrong morally.

Unmechanized agriculture is done for, there is no way in hell you're going to compete with heavily technologized farms. No way!
And when you can't compete in both cost per kilo of product and production per square ha you have only one alternative, charge more, which will also destroy part of your target buyers which don't give a damn about anything else but the price. Even compact machinery like small kubotas are 20-100 times more efficient in everything, from plowing to harvesting, it makes little sense to do it manually when you could do other work in this time and with half of the money earned this way you could either rent or pay a guy with a machine to do it. In small farms, there is simply too little money to be gained, you can't put aside money with this, even for large farms the margins are incredible, so low you'd be amazed.

You can't force the government to spend money on something that is inefficient just to give people money. You either help them with modern equipment and technology or you simply quit, you're better of paying them half of a monthly wage that subsidizing something this inefficient, this is what brought down communism , producing expensive useless stuff. I know, most of you aren't going to like it, but this is the truth, no matter how cool or trendy having your own farm might look for some, it's neither!

[Sanugarid]

The food making or food industry will never get old. It's there to stay and in this pandemic, a lot of small food business has been established. From food deliveries and ready-to-eat food has been raking a lot and increased its demand due to home quarantines.

What I can suggests to small businesses that wants to stay making profit these days is always focus on the people's necessities like food. I agree, this will never gets old as people needs to consume food everyday, what you can do is to add a flavor that the people want. I've seen some home made food and snacks being sold online since stores are still close up til now, when there's a will there's a way.

Most of these small businesses doesn't actually care for records. They haven't included it from their plan and all they think of is the potential profit and its a thing that they want to do. It's normal to see for small businesses not to priority it but as they expand, they will realize how important it is.

For small business it is not that important, what is important to them is the return of capital and the profit, they don't want to add extra expenses for recording unless it is getting big and broader.

[PavelMed]

My country does not support small business - it stifles it with taxes. Poor entrepreneurs do not have time to open up, as bills come to them here. No programs, no soft loans - nothing. People survive as they can.

[Ucy]

Small scale are easy to manage. Most gifted new business owners tend to start small and grow gradually. Some of the successful ones usually expand to medium scale or they open more small shops in multiple places

It's not just about having small scale business. The serious small scale business owners usually have multiple small businesses scattered around  their communities with employees or apprentice taking care of them. Some do venture outside their communities too.

Ofcourse Packaging is problem with such businesses, but the local consumers don't always bother about it as long as it's clean in their sight. And majority of the consumers are local people.

The stationary ones do get support from micro finance banks. And lots of those with fancy packaging or that package things properly are trained by govt or some sort of skill development centers

I prefer the  multiple small business ownership model though.

[Kemarit]

The food making or food industry will never get old. It's there to stay and in this pandemic, a lot of small food business has been established. From food deliveries and ready-to-eat food has been raking a lot and increased its demand due to home quarantines.

Yes, there's a huge demand for this kind of services, even prior to the pandemic, this industry is booming, and then it literally took off once we enter the pandemic scare.

Most of these small businesses doesn't actually care for records. They haven't included it from their plan and all they think of is the potential profit and its a thing that they want to do. It's normal to see for small businesses not to priority it but as they expand, they will realize how important it is.

Small business is really important specially in developing or third world countries, demand are huge. And I think it will be the most sought market for now as we entering this new norm. And people are very resilient, they take this as an opportunity, I've heard that internet on the go, or sort of mobile WIFI are in demand, why? because if schools are going to open and be online, students needs the basic internet connection and I've heard businesses many good money already specially in the provinces.

[TravelMug]

The issue is many small and medium enterprises in developing countries are designed to simply be self sustaining and provide some profit for the owner, they ignore so many ways of scaling their business in a bid to keep it original or the fear of modernizing their modus operandi.

I used to have a small scale business, but I have closed and never scale because of so many problems and I got busy with other personal stuff.

It's however possible to add modern ideas and get keep your business original and appealing to the locals.
A small scale tailor for example, may limit his/her designs to only those within their locality, as that's the popular design there,  limitng the business. Having an online presence could easily increase the reach of the business and force them out of their comfort zone while advertising their local designs to other regions, you can also use it as a tool to monitor the performance of your business using KPIs

I think it's really possible, otherwise, the old and traditional way of making business will be out dated and you can't cope up with the competition specially that people are moving online.

But before scaling a business, it must have accurate book keeping records, and should be an entity of it's own. One of the first questions investors ask during a pitch is how has your business been managed so far and where you want to take it to.

Without asking investors though, it is really possible to scale, as I have said I just had so many problems, demand is there but suppliers can't keep up and there is also competition. Book keeping records is a must though, so that can quantify and see where you are right now and of course to see if you have made good profits.

[Darker45]

The tendency with small businesses which are using old methods is that the production cost is significantly higher per product as compared to one which is mass produced.

As a result, a product locally made with obsolete tools more often ends up more expensive than one which is imported from countries like China. The same is true even to vegetables and other agricultural products.

The edge, however, with a small business is that each and every product it brings to the market could have a certain touch which a mass produced product does not have. A chocolate or a hat or a cookie or a soap or whatever hand-created product probably ends up more expensive but still worth it. Artisan products are more than just products.

Organic backyard agricultural produce may be more expensive but are definitely worth it.

 

[abhiseshakana]

In my country, the corona pandemic is hitting the economy up to small and medium scale companies, and even street vendors also complaining about a 75% reduction in turnover.

Seeing from a report on one of the government websites that there are many small and medium businesses that survive and even record growth and increase in turnover during the pandemic. And those who survive are Small and Medium Enterprises that have gone online.

The key is not the product being marketed but in an anti-mainstream, an unconventional business model that leaves Brick And Mortar Retailing (use of buildings, production facilities, or stores for sales operations). In addition to having tangible products they also have a system that is integrated with online stock management, then with a shipping suit both in town or out of town and even between countries, customer service systems, supply chains. The most important thing is the support of ease of payment using credit cards to e-wallets and COD systems.

Whereas the small and medium businesses that experienced the downfall were conventional small businesses that did not want to synergize with technological advances, which relied on debt and relied on imports as raw material for products.

[mu_enrico]

Unmechanized agriculture is done for, there is no way in hell you're going to compete with heavily technologized farms. No way!

Yeah, agriculture is a problem. I think it shouldn't be put in the same basket as other small businesses when entrepreneurs can do something with their creativity to make the product different and more valuable. Some people say agriculture, well, it's a "culture" that needs to be protected. Hence tariffs, subsidies, and whatever else. Even if the old farms get more equipment and manage to ramp up their production, the price will drop because of too much supply.

Anyways, it may be better if the topic of agriculture discussed in a separate thread.

[davis196]

I don't understand the point of your thread,OP.I don't see a clear idea.
Do you wanna share some tips with local business owners about how they can boost their business?
Do you own a local business?If you don't,then why do you think that you have more knowledge and experience than an actual local business owner?
By "presentation" I guess that you mean marketing.No business,big or small,can't survive without marketing.
What is your "old method"?Asking local business owners to learn bookkeeping and attend educational programs is just common sense.

[Barnabe]

Unmechanized agriculture is done for, there is no way in hell you're going to compete with heavily technologized farms. No way!

Yeah, agriculture is a problem. I think it shouldn't be put in the same basket as other small businesses when entrepreneurs can do something with their creativity to make the product different and more valuable. Some people say agriculture, well, it's a "culture" that needs to be protected. Hence tariffs, subsidies, and whatever else. Even if the old farms get more equipment and manage to ramp up their production, the price will drop because of too much supply.

Anyways, it may be better if the topic of agriculture discussed in a separate thread.

Injecting money into a small business can be a way to profit from this. If agriculture was made by hand until then (and they could make a living out of it), injecting money into this sector to mechanize it can be a great way to make money! This concerns especially businesses in 3rd world countries, since 1st world are already fully developed.

[sunsilk]

The food making or food industry will never get old. It's there to stay and in this pandemic, a lot of small food business has been established. From food deliveries and ready-to-eat food has been raking a lot and increased its demand due to home quarantines.

What I can suggests to small businesses that wants to stay making profit these days is always focus on the people's necessities like food. I agree, this will never gets old as people needs to consume food everyday, what you can do is to add a flavor that the people want. I've seen some home made food and snacks being sold online since stores are still close up til now, when there's a will there's a way.

It's a necessity and it's been pointed out. The type of food will depend on the demand so for those who are in this business or just starting out. They have to know what's the demand in their target market location. It's an important matter so they will know what's the best food that the customers are looking for.

Most of these small businesses doesn't actually care for records. They haven't included it from their plan and all they think of is the potential profit and its a thing that they want to do. It's normal to see for small businesses not to priority it but as they expand, they will realize how important it is.

For small business it is not that important, what is important to them is the return of capital and the profit, they don't want to add extra expenses for recording unless it is getting big and broader.

When you record, you actually don't have to spend on it. You just even an old record book or notebook that's not being used and that's already good. But it's not actually a matter to them as starting.

Yes, there's a huge demand for this kind of services, even prior to the pandemic, this industry is booming, and then it literally took off once we enter the pandemic scare.

People are not allowed to go out and there's an exception for these services because it's necessary. And there's no layoff in this because everyone can be part of it.

Small business is really important specially in developing or third world countries, demand are huge. And I think it will be the most sought market for now as we entering this new norm. And people are very resilient, they take this as an opportunity, I've heard that internet on the go, or sort of mobile WIFI are in demand, why? because if schools are going to open and be online, students needs the basic internet connection and I've heard businesses many good money already specially in the provinces.

For countries that doesn't have reliable internet connection, it's going to be a good kind of business providing those materials for kids going back to school with a new norm.