Mr Daniel N. O. Sackey, the Managing Consultant of Ephesus Consulting, has urged Small and Medium Enterprises (SMEs) to have a well-structured succession plan for continuity.
He said most businesses collapsed after the owner died because there was no replacement plan to sustain and to enable the business to survive and, therefore, urged prospecting and existing businesses to set achievable vision to mitigate such pitfalls.
Mr Sackey gave the advice in Accra at a training programme for SMEs dubbed; “SME Business Clinic,” organised by Vodafone Business Solutions and Small and Medium Enterprises Ghana Awards (SMEGA) Foundation.
Speaking on the topic; “Position Your Business to Attract Investors,” Mr Sackey said: “Business owners must think beyond their lifetime and groom successors to run the business because most businesses go bankrupt five years after the owner has died.”
He said statistics in the United States revealed that 80 per cent of businesses would survive in their first year, 66 per cent would survive the second year, and 50 per cent will survive the fifth year.
Mr Sackey said in Ghana between 60 per cent and 75 per cent of small businesses would fail by the end of the year, based on statistical record.
He said it was imperative for business owners to constitute a competent staff and management and ensure proper legal arrangement with good corporate governance reflected in decision making and adequate market research to stand the test of any obstacle.
The Managing Consultant was of the view that an entrepreneur must be investment driven to attract investors because an investor wants to see a well-structured business plan of a company for considerable returns.
“No investor will want to invest in a collapsed venture and that is why it is necessary for business owners to ensure that their operations will guarantee investor confidence for mutual benefit in the market of competition,” he said.
Mr Sackey expressed concern about how many businesses fail to file their tax returns in that there are penalties associated with it such as fines and jail term.
He urged businesses, especially SMEs, to seek for advice and file their tax returns to avoid falling foul of the law since “ignorance of the law is not an excuse”.
Mr Kwesi Ofori Jnr, Project Lead, SMEGA Foundation, said the programme was to build the capacity of SMEs to grow their businesses and make an impact in the market economy.
He said the success of business enterprises was hinged on three factors; access to market, financing and training.
Mr Ofori Jnr appealed to government to collaborate with SMEs to have access to market their goods and offer flexible credit facility to enable them to survive and grow their businesses.