Building an innovative business model despite high living costs

Ghana, like many developing nations, faces the difficulty of a high cost of living, which creates a substantial barrier for small and medium-sized enterprises (SMEs) seeking to establish and grow their operations. 

The cost of living in Ghana has risen in recent years, owing to factors such as inflation, rising commodity and service prices, and growing utility expenses. 

This has made it difficult for SMEs to develop and compete in the market because they are unable to keep up with rising operational costs. 

To survive and grow in this harsh environment, SMEs must create creative business models that allow them to cut costs, boost efficiency, and remain competitive in the market.

SMEs might uncover new opportunities by creating creative business concepts. I have discussed some practical steps for SMEs to develop Innovative business models amid high cost of living in Ghana

Embrace technology

SMEs in Ghana can save money and boost efficiency by adopting technology and implementing cloud-based accounting software. 

This programme enables real-time tracking of expenses, income, and cash flow, removing the need for manual data entry and reconciliation. 

Automating these activities allows the SME to save time and decrease the chance of errors, resulting in cost savings and increased financial management efficiency. 

Furthermore, cloud-based accounting software allows team members to make smarter decisions and collaborate more effectively because they can access financial information from any location.

By embracing technology in this manner, the SME may streamline its operations and concentrate on expanding its business.

Diversify revenue streams

Diversifying revenue streams is one practical example of how a SME in Ghana might reduce the impact of the high cost of living. 

This could include introducing new products or services to different market categories, as well as expanding into new geographical locations. 

By diversifying their revenue streams, small and medium-sized enterprises can lessen their reliance on a single source of income and better with stand swings in living costs. 

This could help them preserve profitability and keep their business running in the face of economic hardships.

Concentrate on customer value

An SME in Ghana may stay competitive in the market by focusing on adding value to their clients by delivering personalized services and developing strong relationships with them. 

Understanding their target consumers' individual demands and preferences allows the SME to efficiently personalize their products or services to their needs. 

This can boost client satisfaction and loyalty, resulting in repeat business and positive word-of-mouth referrals. 

Furthermore, the SME can distinguish itself from competitors by providing distinct value-added services or perks that set it apart in the market. 

By regularly producing high-quality products or services that meet consumer expectations, the SMEs can establish a strong reputation and competitive edge in the market.

Reduce overhead costs

One of the most significant problems for SMEs in Ghana is the high cost of overheads such as rent, utilities, and transportation. 

To cut costs, SMEs should examine alternatives such as shared office spaces, remote working, and outsourcing. By lowering overhead expenses, SMEs may free up resources to invest in development and innovation, allowing them to remain competitive in the marketplace.

Collaborate with other businesses

Collaboration can be an effective technique for SMEs seeking to cut costs and boost competitiveness. By collaborating with other firms, SMEs can share resources, combine their skills, and utilize each other's networks to gain mutual benefit. 

Collaboration can also help SMEs enter new markets, get new clients, and broaden their reach.

Consider investing in employee training and development

To compete in a competitive business environment, SMEs must invest in their most precious asset: workers. 

SMEs may improve productivity, raise morale, and increase employee retention by providing chances for training and development. 

This can assist SMEs in developing a talented and motivated workforce capable of driving innovation and growth, despite the high cost of living.

Conclusion

The high cost of living in Ghana poses a substantial hurdle for SMEs looking to start and grow their businesses. 

However, by developing innovative business models and taking practical steps such as embracing technology, diversifying revenue streams, collaborating with other businesses, focusing on customer value, lowering overhead costs, and investing in employee training and development, SMEs can navigate the challenges posed by the high cost of living and remain competitive in the market. 

By taking proactive actions to innovate and adapt to the changing business environment, Ghanaian SMEs may overcome barriers and achieve long-term growth and success.

The writer is a Lecturer/SME Industry Coach, Coordinator (MBA Impact Entrepreneurship and Innovation),University of Professional Studies Accra
ayiku.andrews@upsamail.edu.gh
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