Guidelines Small and Medium Enterprises - In this country today, Small and Medium Enterprises (SMEs) are operating with minimal guidelines. In this regard, business owners tend to move their businesses in any direction deemed necessary, even if this points in a direction which is not healthy as far as running a business is concerned.
Parents at home will give guidelines on how they would like their children to be brought up. Such as taking them to schools to attain good education, teaching them good morals and good conduct; so that they achieve their vision and become happy.
The Government should take the same route over SMEs and which ever party in power takes this initiative will be praised for ever by the Zambian People.
One area of concern in this country is the manner in which SMEs keep business records. My interaction with SMEs has revealed that 90 per cent of the SMEs don't keep proper business records.
From the surface, this looks to be not a big problem on the part of the entrepreneurs themselves, but business experts have attributed 30 per cent of business failure to this problem.
This problem has resulted in many small businesses defaulting in payment of Government statutory obligations, not because they want to do it deliberately, because they have no records as a basis for preparing them.
The same SMEs on the on the other hand are making strives to come up with workable business ideas in order to sustain themselves in the absence formal employment, which is very commendable because by doing so they help to improve the economy of the country.
We understand that Zambia operates a liberalised economy which is free for any business idea implementation, but letting some of these businesses operate like headless chickens can be very detrimental to the economy in the long run.
Some business owners are impervious to advice in following business legal requirements, unless the law visits them, that is when they realise that they are on the wrong side of the law which is a very wrong approach to business matters. I speak strongly about this because I am a witness to these occurrences.
Small and medium businesses in this country do not follow proper business procedures in carrying out their business implementations, what matters to them is as long as they are able to operate, the main core of a business in what they presume to be profitable lines, then that is all to them.
A business healthy account, favorable stocks or work in progress to those who run workshops or are in manufacturing related businesses, money locked in debts is enough for a business owner to be hoodwinked that is doing fine without proper record keeping procedures.
However, proper record keeping, will reveal that suppliers (trade creditors) are owed quite a substantial amount of money. The business has not been remitting National Pension Scheme Authority(NAPSA) deductions for both workers and its portion.Quartery tax provision has not been remitted over the period required and worse still annual accounts have mot been submitted to Zambia Revenue Authority(ZRA) to know its final tax requirement .
And some sundry creditors are owed a collective substantial amount of money. The other loan which does not sit on the business current account for obvious deductions is busy accumulating interest for none servicing.
These are common features found in SMEs who do not keep proper financial records and business experts have predicted short life span for such businesses.
I was thinking on how the Government should assist the SMEs in proper implementation of business procedures by creating a legal frame work under which they should operate not necessarily for a law to act as a policeman, but merely for administrative purposes.
The Government should come up with Act of Parliament which should act as policy guidance for SMEs in a way they should run their businesses. This again I emphasise should be only for administrative purposes not to move away from the market economy.
For example, let it be a requirement under the law that for a business to renew its annual trading licence from the council, it should be up-to-date with Patents And Registration Agency (PACRA) annual returns, should have registered with NAPSA for workers' social security, should have tax clearance from ZRA and would have registered with Workers Compensation Fund Control Board(WCFCB) for workers' insurance, because whether one does not want these are statutory obligations which every business formally registered is suppose to go through under their various laws.
The SMEs Act should operate a revolving huge venture capital fund which should be only accessible to deserving SMEs such as those which would keep proper business records among other requirements.
There are so many flexible inclusions which can be debated among the intellectuals and the theme should be not to kill off the entrepreneurial spirit in the country but instead, revive it to greater heights.
The Times of Zambia/06/03/2013