High mortality rate of SMEs is not about lack of capital

Editor, The missing point is that if the entrepreneur doesn’t have access to such a large pool of knowledge, or doesnt get direct help from a trans-disciplinary research and development expert to bundle up her product/service, the enterprise won’t prosper. If it doesn’t simply die, there is a risk that it remains at the level of crafts and perpetual personal improvisation. Francois-Xavier Nziyonsenga ************************** Most SMEs are by definition recent startups. And the mortality rate of startups is extremely high (on average around 80%) everywhere, including almost all OECD countries. And the causes of such high mortality rates in the early years of a business, when it is—like all infants—at its most vulnerable stage are many and highly varied. Yes, running out of cash for operating capital is high on the list of such causes, but other equally important reasons include a weak dialogue with customers and therefore a poor understanding of their real needs and wants; failure to differentiate the company’s products and services from those of the competition; failure to communicate with your target market about the value proposition of your products or services clearly, concisely and compellingly; poor management of people and other resources; and a poor business model to begin with. An entrepreneur can have sufficient money or access to credit and still fail if he or she is unable to nail each and all of these aspects of starting and growing a business. But in and of itself failure is and should not be the end of your dreams. Remember the old motivational injunction, if at first you dont succeed, try and try again. Rarely does something worth it ever come easy and without some pain. Mwene Kalinda Reactions to the letter, “SMEs’ failure down to owners’ weaknesses” (The New Times, June 12)

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High mortality rate of SMEs is not about lack of capital