SMEs might think that sustainability is only relevant to large companies—that for a small business, the administrative and financial costs outweigh the benefits. However, the aim of an average entrepreneur (SMEs, owners in particular) extends beyond profit-making. Business growth and expansion constitute key objectives of SMEs. In a study conducted by Idemobi (2012), it was revealed that over 70% of SMEs die within five years of establishment. This means that less than 30% of SMEs can survive various business challenges and risks.
In many ways, SMEs are the original sustainable businesses. Close links to customers, employees and suppliers, and the integration of business with family life mean that SMEs are often better than large firms at understanding communities and the natural environment. Sustainability and the legacy of the firm are a part of SMEs’ day-to-day activities – even if they don’t call it “sustainability.” The concept of sustainability as used here is defined as the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families, the local and global community as well as future generations (Crals and Vereeck, 2004).
SMEs that integrate sustainability into their core business strategy can benefit from lower costs, reduced risk, access to funds, competition and new opportunities. This course is therefore designed to help participants deepen and strengthen their sustainability efforts, by introducing new research on how sustainability principles and practice can inform goals and actions in small and medium-sized entities (SMEs). The course examines SMEs risks and suggests strategies that could be used in their management in order to enhance their sustainability. It emphasizes sustainability in all its dimensions, including all “three E’s” of environment, economics, and equity while also outlining the prerequisites of sustainability to include the three P’s of People, Planet and Profit (Crals and Vereek, 2004).
- Describing and Defining Sustainability in line with Global Best Practices
- Analyzing SME Business Risks
- Making a Business Case for Sustainability – Role of SMEs in Economic Development
- Understanding the Environmental, Social, and Economic drivers of Sustainability Challenges in Africa
- Knowledge of Effective SME Risk Management Programmed
- Formulating Effective Sustainability Programmed
- Success Factors to Sustainable Entrepreneurship
- Appraising and Evaluating New Sustainability Practices and Programmed
- Mid to higher management staff in SMEs
Defining Sustainability - An SME approach Developing an SME approach to sustainability in business practice, business support or public policy will rely on understanding the dynamics of such a diverse sector. Firstly, SMEs are not scaled-down versions of large organisations and in fact their needs are extremely varied even within the sector itself. Medium-sized enterprises will, for example, clearly possess more developed managerial and organisational structures than do most small enterprises
Role of SMEs in Economic Development SMEs have several significant contributions to the economic growth and development of Nigeria. Ariyo (2008) affirms that SMEs account for 97% of all businesses in Nigeria employs 50% of Nigeria’s workforce and produce 50% of Nigeria’s industrial output. Moreso, SMEs enhance the distribution of economic growth in a decentralized and more equitable manner, eliminating concentrated areas of population and enable equitable distribution of wealth in an emerging economy (Nowduri, 2012). SMEs also participate actively in the mobilization of the natural resources and reduce supply in the labour market (Ogechukwu, 2011).
Business Risks Facing SMEs SMEs and large firms operate in the same business environment but there are evidences that they derive different benefits and opportunities therein. More so, they are exposed to diverse categories of risks. This is because of their differences in economic capacity including asses to human capital and material resources. Kelkar (2008) posits that SMEs are weak in terms of business plan, management structure and in decision making when compared to large organizations. This further increase SMEs’ inability to absorb most business uncertainties and risks. According to Suh (2010) SMEs sector is worst affected by the economic environment and is the first to be hit by any external shock. As a result, there are more SMEs closures than establishments, with approximately only 1% of SMEs growing from having five or less employees to ten or more (Mead and Liedholin 1998; cited in Smith and Watkins, 2012). The implication is that SMEs face a wider range of business risks which are rooted in both the internal and external environment of the enterprises (AIRMIC, ALARM and IRM, 2002).
SMEs Risks Management Head (2009) defines risk management as the process of planning, organizing, directing and controlling resources to achieve given objectives when good or bad events are possible. Vaughan and Vaughan (2001) consider risk management as a scientific approach to dealing with pure risks by anticipating possible accidental losses and designing and implementing procedures that minimize the occurrence of loss or the financial impact of the losses that do occur. The authors further submit that the main objective of risk management is to ensure that the organisation is not prevented from achieving its primary objectives as a result of losses that might arise from its operations.
SMEs Sustainability: The aim of an average entrepreneur (SMEs, owners in particular) extends beyond profit-making. Business growth and expansion constitute key objectives of SMEs. However, in a study conducted by Idemobi (2012), it was revealed that over 70% of SMEs die within five years of establishment. This means that less than 30% of SMEs can survive various business challenges.
Business Perspectives and Future Trends: Through interactive assignments, participants will explore the advantages of sustainability-related planning in a SME context, focusing on the “triple bottom line” of economic, ecological, and social progress. An interactive project will focus on hands-on sustainability planning for organisations and their staff.