Record keeping vital for rural businesses

perating a business.
The “chero zvazvaita” kind of business mentality has led to the collapse of many black businesses in Zimbabwe from as early as the 1930s up to now when business people have relative access to information.
Inadequate record keeping is a major cause of business failure in the country particularly for the small rural businesses.
In most cases this is not only due to the low priority attached to it by the entrepreneurs, but also to the lack of basic business management skills.
A recent snap survey by the writer at the small rural business centres dotted around Murehwa and Mutoko shows that most business owners end up losing track of their daily transactions and cannot account for their expenses and profits at the end of the month because of poor record keeping.
Good record keeping provides a small business with accurate information on which to base decisions, such as projecting sales and purchases, determining breakeven points, and making other financial analyses.
Lack of proper record keeping is widespread in most rural areas and has led to the collapse of several businesses.
A trip to Mukarakate, Kushinga, Hoyuyu, Chikwaka and Chimurenga business centres in Murehwa, Mutoko and Goromonzi was quite telling.
“I had no records at all before I received training from Community Technology Development Trust (CTDT) programme staff,” said Mr Bizeki Karimusango, who owns a shop at Muhume Business Centre in the Mukarakate area of Murehwa.
“It was like operating a patient in the dark. I was ignorant with very little knowledge about record keeping.”
He said he was therefore not surprised why most black businesses failed in rural areas.
“We simply don’t record our transactions. We just say ‘chero zvazvaita’. You can’t tell whether your business is growing or not. It’s just ordering and selling with no proper records,” he said.
“This is what is killing our businesses. In this dollarised economy once your business crumbles it’s difficult to rise again. I feel strongly that whatever knowledge I can get to improve my business, I should cling to it.”
Mrs Martha Magunje recalls the experience: “I learnt how to record my income and expenses. Before the training I didn’t record sales, I kept money in my pocket and spent it. I now know my monthly expenses and I can award myself a salary thanks to the training in record keeping.”
Mrs Magunje runs a store at Chimurenga Business Centre in the Nyadire resettlement area.
“Training in business management has given me a sense of direction. Records show me where I am going wrong and where my strength lies.
“We need to take these basic business skills seriously for our small businesses to survive,” she said.
The training has also provided Magunje with the know-how to apply for credit independently and take full charge of the day-to-day running of the business.
Small rural businesses often have poor record keeping and informal planning processes. Lack of business skills, capital, basic infrastructure and other services and factors have hindered the growth of small rural businesses in most parts of the country.
This has meant that businesses stay at the micro level and are not able to create the needed value for socio-economic development.
CTDT co-ordinator for the Rural Agro-Dealer Restocking Programme Ms Marcy Fusire says her organisation is working with 100 entrepreneurs in Murehwa, Mutoko and Goromonzi to empower them and revive the agro-input value chain.
“We want to strengthen their business practices to minimise losses and help them to stay in business,” she said.
“Record keeping training is a major component of our work. It enables business owners to assess their performance.”
The rural agro-based businesses are benefiting from the financial empowerment training aimed at enhancing their financial management skills.
The programme is being run with the support of SNV Netherlands, an international NGO.
Fusire said the capacity building and financial empowerment trainings are meant to address the challenges facing small businesses in rural areas, like limited access to financial services, poor financial management among others.
“Small businesses find it difficult to access financing in part due to lack of collateral to secure loans but also because they are considered ‘high-risk’ clients,” she said.
This, she said, is attributed to a number of factors like poor management skills, uncertainty of their businesses and poor record keeping practices.
“I can now calculate my stock and my profit margins well. I can also tell whether my business is performing or not,” said Remita Tembo, who runs a shop at Kushinga Business Centre in Murehwa.
“We need more training to instill confidence and business ethics in ourselves. Most business are collapsing because of ignorance about record keeping. In this dollarised economy, we need to take record keeping seriously for our financial survival.”
Added Mr Edwell Nyamuchengwa, a store owner in Chikwaka, Goromonzi: “The ‘chero zvazvaita’ mentality must go. We need to learn new business skills to survive. This programme is good and it has given me a sense of direction. Cash is difficult to manage. Without records you simply don’t know how your business is performing. You can go broke easily if you don’t keep records. Learning empowers and I’m happy that I can now track my stock and cash movements.”
Signs of hope are written on all faces of business owners who underwent training in record keeping and business management.
“I am now optimistic about the future growth of my business,” said Mrs Rita Jorofani, a business operator at the Wuyuwuyu area of Mukarakate.
“Business skills are vital for our survival.”
“I am inspired by what we are learning. As blacks we don’t take record keeping as an important part of our business,” said Mr Tichafa Nyawata, a business owner in the Hoyuyu area of Mutoko.
“A mind shift is needed to make our businesses viable. Look at how whites and Indians run their businesses. We need to make our business to flourish so that we can leave viable wealth for our future generation and not empty shells.”
CTDT has also trained the rural shop owners on procurement, merchandising, marketing, pricing and customer care to help the businesses attract customers, stay ahead of the competition, manage staff and suppliers and understand client needs as they evolve and act quickly to resolve problems when they arise.
Over the years small rural business have failed to secure loans from banks because of poorly compiled records and accounts, low levels of technical and management skills, outdated technologies, lack of professionalism and networking, lack of collateral, lack of market outlets, poor linkages and limited knowledge of business opportunities.
Lack of sales has been a predicament during the inception of such businesses. The need to focus on empowering rural entrepreneurs to create wealth for themselves as well as propel economic development has become more apparent as the Zimbabwean economy treads on a recovery path.
Harnessing the full energies and enthusiasm of entrepreneurs especially of those in the rural economic sector is key to transforming the structure of Zimbabwe’s economy.
Further, there is also the need to create the entrepreneurship culture and provide facilities and the necessary infrastructure to accommodate their visions and aspirations.
Empowering rural business owners who have little or no access to information or business training platforms bodes well to propel continued innovation and practical learning.
“Commitment, motivation and continued mentoring of rural business is critical,” said Ms Fusire.
“We need to be inclusive and desist from marginalising our rural entrepreneurs.”