Things to consider before starting a small business

Mwaya’, not her real name, owned a small shop in Dar es Salaam, and it was doing very well. She had a trusted worker called Happy, who had been with her for a few months and was instrumental in the shop’s success. The customers loved her because she had a way of putting them at ease and advising them on their needs.

However, one day, Mwaya’s trusted worker (Happy) left and started her own shop. To make matters worse to Mwaya, the new employee she hired was untrustworthy, as they ended up stealing both profits and capital.

This story highlights one of the most significant downsides of being a small business owner in Dar es Salaam - employee turnover.

It’s not just about losing a trusted worker but also exposes the business to risks such as theft, loss of customers, and reputational damage.

Yet, despite such threats, when you walk around shopping areas in Dar es Salaam, it’s clear that many people are hungry for business success. From the woman selling avocados or bananas to the mitumba traders and those who have been able to rent out shops, business people desire to earn a decent living.

However, running a successful business is easier said than done, as illustrated by Mwaya’s story.

According to the Small Enterprise Development and Promotion (SEDP) Programme in Tanzania, the Baseline Survey of Small Enterprises conducted by the International Labour Organization (ILO) in 2016 shows that many small businesses in Tanzania operate in low-productivity sectors, such as agriculture and retail, and need more skills and resources to expand and grow their businesses.

The study recommends that small business owners in Tanzania receive training and support to improve their management and technical skills and access to finance and market information.

Before starting a small business, it’s crucial to carefully consider your business needs and assess the qualities necessary for the positions you want to fill.

Ask yourself if there is a need for additional staff, what roles the employee will perform, what skills and experience are necessary, and what remuneration you can offer.

That is the professional way, but in an actual situation, some small business owners cannot make those considerations because even paying the employees is an uphill task. But all in all, it’s essential to think about and plan, even when your capital base is shallow.

Choosing the right employee is crucial as it directly impacts your business’s success. After employing someone, assess their performance and supervise their interactions with customers. Customers are the foundation of any thriving business, and employees’ language and attitude towards them significantly maintain or lose their loyalty.

If you find that your employees need to interact better with customers, be firm and take action to maintain your customers. The language and attitude of employees towards customers are critical in maintaining customer loyalty.

By providing quality customer attention and support, customers are more likely to return, regardless of your business’s location.

It’s important to note that running a successful business involves more than having adequate capital and a good location. Your employees will make or break you.

The decision to employ workers depends on the size and nature of the business. Small businesses often function with just one or a few employees, while larger enterprises may require a more substantial workforce.

Although finding the perfect candidate may not always be possible, every entrepreneur should seek hard-working and honest individuals with potential. Consider hiring someone on a contractual basis and assessing their qualities and performance before keeping them as regular employees.

Selecting and managing employees is crucial to the success of any business. By carefully evaluating your business needs and choosing the right employees, you can ensure a positive impact on your bottom line.