“Last week when we paid civil servants there was $217 [left] in government coffers," Zimbabwe’s Finance Minister Tendai Biti told reporters this week. "The government finances are in paralysis state at the present moment. We are failing to meet our targets."
Zimbabwe’s is a familiar situation for a lot of small business owners, just on a grander style as the Mugabe regime’s cash flow management skills are pushed to the brink.
The question is, what have they learnt from going so close to the edge and what are they going to do to get back from it?
In reality they’ll probably just corrupt some more cash out of the economy. But what they should be doing is going back to small business basics.
Pursue Alternative Income Streams
Zimbabwe has a wealth of resources and agricultural assets that have been underutilised. These are potential income producing areas of the economy that if managed well would turn around their gaunt looking bank account.
For small businesses, the approach to possible insolvency is no different.
When you’re starting up, or the financial chips are down, you must pursue alternative income streams. Whether that means getting a job on the side or selling lower margin products, it’s about doing whatever’s necessary to get you through.
Seek Sound Advice
Robert Mugabe isn’t one to seek outside advice on how to run what he sees as his country, but it’s probably long time he did.
Unfortunately it’s a similar story for many small business owners, who don’t ask for help or counsel until they’re down on their luck. For this reason, at every stage of business building and especially in the tough times, it’s essential to get sound outside advice.
And with so many free or subsided resources provided by places like Business Enterprise Centres and entrepreneurial groups, there is absolutely no excuse not to.
Use Free Services
Now that the country has only got a couple of hundred dollars to its name, Zimbabwe is going cap in hand to foreign donors.
The small business equivalent to this is pursuing government grants and crowd funding sources to collect vital business finance.
And these are great, but it’s also about using all the free services at your disposal too. Things like social networks, online tools and blogs to broaden your business while keeping a firm lid on costs.
Promote The Problem
As is evidenced in this article itself, the Zimbabwe government has publicised its problems in hope of garnering support.
At any stage of the small business journey, free publicity is invaluable, and especially when you’re broke. So learn how to write a press release, give journos something to write about and guest blog to get your company in the spotlight.
For more small business insights, don't forget to tune into Kochie's Business Builders, back at 11am on Channel 7 this Sunday!