Small businesses urged to work and grow together
Identify common goals, start small and experiment
Now is the time for Namibian MSMEs to unite and claim their collective place in the market, a business expert says.
Limited resources, high competition and compliance barriers are some of the challenges Namibian micro, small and medium enterprises (MSMEs) currently face. However, MSMEs that unite for a common purpose can scale faster, access larger projects and experience sustainable growth.
According to Gerold Dreyer, the Namibia Investment Promotion and Development Board (NIPDB) consultant for market access and export promotion, collaboration will help MSMEs win bigger contracts, reduce costs and share risks. Dreyer was speaking to representatives of MSMEs at the Hyphen Local Content Roadshow in Lüderitz recently.
One way of doing this is by pooling their financial resources, and by doing so, business owners will not need to invest as much money as they would have if they chose to do it alone, he said.
“Collaboration in business is no longer optional; it is a strategic advantage. The green hydrogen sector, for example, requires scale, quality and innovation. It will potentially contribute to increased capacity, knowledge transfer and better market positioning for companies. Companies can cooperate by forming industry clusters, cooperatives, supply chain integration and by forming joint ventures or partnerships," he explained.
He advised MSMEs to identify common goals and to start small and experiment.
“Leverage your existing networks, formalise agreements and engage large companies and local authorities.”
Dreyer urged business owners to simply start by working with people they already know, other business owners or community members, and to formalise partnerships by putting agreements in writing so that everyone is clear on what is expected of them.
Business owners are also encouraged to proactively reach out to big companies and their local authorities, as they can offer support or opportunities or even become their clients or partners.
Sustainable growth
Dreyer highlighted the success of MSMEs in South Africa’s renewable energy sector.
“MSMEs in engineering, logistics and construction formed partnerships to bid for large-scale solar and battery storage projects. This resulted in South African equity participation of 49% across all the preferred bidders and average Black Economic Empowerment (BEE) participation of 46%, meaning that collaboration created access to bigger contracts and sustainable business growth.”
He added that Namibia’s local content policy could also increase local participation, with preference being given to Namibian suppliers.
“Capacity development will increase support for MSME growth through training. Additionally, technology and knowledge transfer through partnerships could enhance local expertise and Namibian ownership through equity participation.”
Market is ready
Dreyer said challenges in MSME collaborations can be dealt with effectively.
“Issues related to trust can be mitigated by having clear agreements or contracts in place. Clearly defined roles, responsibilities and reward structures will assist in doing away with the aspect of unequal contributions. Conflict can be avoided by implementing adequate governance structures and regulatory issues can be resolved through seeking advice in legal structures.”
He pointed out that the NIPDB offers business advisory services to MSMEs to help them navigate some of the challenges of owning and operating a business, ultimately enabling them to grow their enterprises and contribute towards creating jobs in the country.
“Now is the time for Namibian MSMEs to unite and claim their collective place in the market. The opportunities are real, the support is available and the potential for growth is limitless, but it all begins with collaboration. The market is waiting!”