Intelligent use of data
Although entrepreneurship is considered by many to be an innate skill—you either have it or you don’t—this does not mean that there is not room for entrepreneurs to learn from one another and to benefit from more structured learning programmes.
John Lynch, professor at the Fuqua School of Business at Duke University in the United States, who has been working with Wits Business School conducting the Grow Your Venture course, explains that the one area that small businesses struggle to get right is the use of market intelligence.
‘Large companies typically have entire departments dedicated to sourcing and analysing market information. However, gathering this information is not the easiest, or the cheapest exercise,” he says. ‘Small businesses need to find a different way to access the information that they require and need to find realistic ways to do this without incurring excessive costs.”
The key strategy that smaller companies need to follow is to look for secondary sources of information. This is research that has already been conducted and which is often available for free or at very reasonable costs. This allows smaller companies to avoid the costs of doing
direct research, but still get most of the benefits of this research.
Lynch says that there are disadvantages in using secondary research, in that it does not allow companies to ask direct questions of the market, relying instead on an agenda set by a third party. When using this kind of data for market intelligence purposes, Lynch advises that companies look carefully at what decision needs to be made.
Once the scope of the decision is clear then it is possible to go out and find the research that is most pertinent to the business decision that needs to be made. Business owners should not just restrict their search for information to data that is specific to their industry as it may be possible to glean valuable information from research conducted in associated industries and adapt that intelligence to fit the needs in the specific business.
Lynch says that he has been specifically impressed by the analytical skills of the participants in the programme. ‘While they wouldn’t be in the programme if they knew everything, they have a keen insight into business problems and not just those that are specific to their industry,” he says.
‘The one thing that is always riveting in this kind of environment is how much we, as instructors, can learn from the students,” he says. ‘Considering that the people on the course come from companies that have between five and 50 people and turnovers below R10-million, we get a perspective that we wouldn’t find when dealing with large corporates.”
One of the issues raised by the participants was how to deal with slow payers. These are clients that do not settle their accounts in a timeous fashion, which has a dangerous impact on the ability of smaller companies to manage their operating capital. This was something that had not been anticipated as a topic of discussion when the course was planned.
The Grow Your Venture course is now in its third iteration and Lynch says that the school is now looking to start examining what the impact the course has had on the small businesses of those who participated in the programme.