Why are mid-size business owners committed to build, grow and dominate in such a bleak economy?
Pavlo Phitidis drew inspiration from an event he had spoken at earlier in the week, with 119 established private businesses turning over between R15million and R200million annually, probably of an average age early- to mid-50s. The businesses crossed all sectors and were from all over the country.
Pavlo was preceded by a highly regarded economist who shared a brutally tough economic forecast. He spoke about a lack of economic recovery strategy post-Covid; to the 4 caps to economic strategy development; to the political issues marring our ability to develop our growth strategy; the kleptocracy, ongoing corruption and its impact; the rating agencies who downgraded SA, the unemployment rates – it was a devastating picture and the audience were all felt shattered by the end of it!
Pavlo’s role was to try to share insights on how to build a busines in this environment! Not an easy task.
So he started with a poll. Which asked these business owners: in the next 36 to 60 months, which of these do you want:
- Build grow and dominate in your sector
- Build, grow and emigrate
- Build, grow and exit for a comfortable retirement at the coast or in the bush
- Exit your business to get a steady, predictable paycheck
What would you anticipate the results would be?
Listen to the podcast of The Money Show on 702 or CapeTalk here to gain his insights into what the business owners’ responses say about this segment of the economy.
Pavlo ran the same poll on social media and the results indicated that 83% of the people on social media thought that business owners would be looking to build & grow to emigrate.
But in reality, 87% of the business owners polled voted to build, grow and dominate their sector. Despite having just been reminded of the appalling operating environment we are dealing with.
These business owners had signed up to attend an event that promised a business growth discussion. They were open to learning about opportunities.
These business owners were wanting to find a different way to build, grow and scale a business – they had probably tried to do it themselves and realised what they could, and could not achieve alone. The runway is far shorter than for a 30-year-old.
Established mid-tier businesses have too much to lose. The business owners have all their wealth tied up in their business. To realise that, they need to grow, in order to exit.
Corporates that tend to dominate a sector or industry, are too big to grow in low-and no-growth economies, but mid-size businesses are nimble enough to make the changes needed to get ahead of their competitors.
When you’ve been in a business for 20 or 30 years your value stack is deep. You have the relationships and know where the problems and opportunities lie. Furthermore they have been through a cycle, probably including the recession of 2008, and many other crises since and they know how to direct the business into the opportunity that emerges from the crisis.