Small and Medium Enterprises (SMEs) are the backbone of East Africa’s economy, playing a vital role in driving growth, innovation, and job creation across the region. Representing approximately 90% of all registered businesses when micro-enterprises are included, SMEs contribute significantly to GDP and serve as a critical source of income and employment, especially in the agricultural, retail, and service sectors.
SMEs are very critical to the economies of East Africa. They constitute 60% of all registered entities. When micro-SMEs are factored in, they constitute roughly 90% of the registered entities and contribute to roughly 40% of the GDP in East African countries.
Due to their size, resource constraints, and the dynamic nature of the business environment, SMEs face a myriad of challenges Namely:
As a result of the above challenges, the Majority of SMEs do not survive the 5th year, and as a result, it's extremely important for SMEs to constantly self-evaluate to identify potential risks and proactively develop mitigation measures.
How can SMEs self-evaluate their ability to continue into the unforeseeable future without curtailing materially their operational activities?
At Ronalds Africa, we have developed a free tool called the Ronalds Business Survival Index that allows organizations to self-assess and understand their business's strengths, weaknesses, and areas for improvement which are crucial for long-term success.
The RBSI is anchored on 5 key aspects:
As indicated, the RBSI is a free tool that can be accessed on our website. By using this tool, you'll gain valuable insights into your business's current status and receive personalized recommendations aimed at driving growth, professionalism, and sustainability.
Tune in to the next series where we will take a deep dive into each metric above.