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|Title: ||The private sector business (a case study of some selected small and medium scale enterprises in the Kumasi Metropolis)|
|Authors: ||Hwnompe, William – Franklin K.|
|Issue Date: ||22-Feb-1998|
|Series/Report no.: ||2456;|
|Abstract: ||The importance of planning in any human endeavor; be it in politics, religion or even in business;- cannot be overemphasized. The probability of any venture ending successfully depends to a very large extent on how effectively and efficiently it is planned. The old age adage “He who fails to plan, is planning to fail” summarizes it all.
The private sector under the government s liberalization and divestiture policies has been identified as the engine of growth c the Ghanaian economy and this makes the sector an indispensable partner in the move towards the achievement of the aims and objectives of the “Vision 2020” plan which aims at making Ghana a “middle income” country by the year 2020. Government in recent times has therefore embarked on efforts to create Pie necessary “enabling environment” for the private sector to be able to play a leading role as an engine of growth of the economy.
However, a critical observation of the performance of small businesses in the private sector reveals that a good number of them begin well and then within a very short period of time, they collapse. Some merely exist in “name’ but their performance records are non-existent. Even though there may he many casual factors to this state of affairs one cannot rule out the “planning factor” as one of the most effective contributors to the failure rate of the small businesses in the private sector. At the same time, however, one sees the private sector businesses of foreign origin blooming in the same business environment.
To buttress the above point, one could see that even though some of our businesses have all the resources (human financial physical and the technical know-how) needed to organize a successful business yet, they are still failures. This shows that it is not merely the question of avail ability of resources which may be scarce, that counts but rather how well the available resources are organized and managed within the framework of an existing and workable business plan.
A good number of our private sector small businesses do not have any predetermined plan and so are run-on the “trial-and-error” basis. The result is that small changes in the general business environment literally ‘catch them on the wrong foot” and most of them are unable to recover. This is because they do not have the basis to forecast and respond to any change in the business environment.
Even though government has put in place entrepreneurial development institutions like the Empretec-Ghana Foundation; National Board for Small Scale Industries (NBSSI) with its Business Advisory Centre (BAC) and a host of public and private business consultancy services, little has been achieved in inculcating into the private sector small business operators, the culture of planning in business. Most private sector small business operators still choose to operate their entire business and lifetime investment on the try-and-error basis, at a great opportunity cost. Thus to run a business without a guide of a workable business plan is a major problem accounting for the relative failure of many business operations.
1.2 Justification of the Problem
The inability of businesses to consciously design a business plan for smooth and sequential running of the businesses results in the mismanagement of the resources at their disposal. They are also lot able to bid any anti-dote to the fluctuating business environment since there is no basis upon which proper forecasting could be made.
Furthermore, companies without business plan are also not able to attract funding from Banks and other investment financiers in that the financial institutions in recent time are not only interested in collateral securities as a pre-requisite for granting of loans, but would also want to know in written details how their money would be used and the prospects in the business so as to assure them of the ability of the business to pay back the loan. The lack of business plan therefore needs to be tackled by companies not only to ensure compliance but also to make these companies responsible. mature credible in the eyes of the Banking institutions and financiers.|
|Description: ||A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirement for the award of Postgraduate Diploma in Industrial Management, 1998|
|Appears in Collections:||College of Arts and Social Sciences|
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