Why Zimbabwe government must get behind small businesses and informal traders

Zimbabwean economy at the moment (2015) is being driven by the small businesses and informal traders. With Zimbabwe’s unemployment rate at around 80% and literacy rate being the highest in Africa at 90%, it is unimaginable the number of learned people on the streets.

All these educated people who have not found employment have employed themselves by starting business ventures whether formal and informal. They are actually making a living from those ventures.

One thing to reckon is Zimbabwe is busy at work. After the depression-hyperinflation era, most people acquired entrepreneurial skills. These are skills that came out of necessity but are really important and invaluable life skills.Most people are harnessing these skills to further their financial lives in the wake of lack of jobs.

Though the government has made some efforts to support enterprenuers and small businesses in Zimbabwe, the effort is not enough.

Much of the resources are channelled to established companies and less goes to small businesses but small business and start-ups is the way to get growth in the economy and to create more jobs. This needs to be backed by more bank lending and start-up loans for entrepreneurs.

Richard Branson notes that sustainable growth in the economy will come from private sector investing to create jobs. To get the growth from the private sector, he says, there is need to get behind the small and medium-sized businesses that are the engines of any healthy economy. To do this they need investment and finance and that comes from the big banks. The politicians talk of encouraging lending. He asserts the need for action to match that rhetoric. Government needs to focus on smaller businesses and find ways of making it easier to set up a business in the Zimbabwe. It should look at reducing business rates and regulation on small and start-up companies.

There is also need to encourage more entrepreneurship from the next generation – and focus on giving them the basic business and money management skills as part of the schools curriculum.

http://entrepreneurcrunch.com/becoming-an-entrepreneur/
.zimeye.com/zimra-to-tax-raid-small-businesses/

Ideas for Starting a Business in a Small Town

Starting a business in a small town presents its own set of challenges. There is less competition, but there are also fewer potential customers, and people in small towns may have less money to spend on luxuries. You may also need to avoid competing against businesses that are already well-established and popular. On the other hand, many small towns lack a wide variety of businesses, and people may be craving something new.

 Local Businesses

One idea for a small-town business is to make or produce something that is uniquely local, such as photos of the local area or food products produced locally. You can also sell handmade jewelry or clothes that are either customized to represent some feature of the local area or made locally. You could target tourists or people who live in the town part-time, or sell your products on the Internet as a "taste of the town". You can also provide a local service, such as running a children's camp for the local community that incorporates the local geography and heritage in its activities.
Local Knowledge

Some types of business trade on local knowledge. For example, if your town is in a popular tourist area, you could make guides to the area or act as a tour guide. If the town makes a unique type of product, such as jewelry or a speciality food product, you could sell these on the Internet or in larger towns. You can also buy products that are hard to find locally and sell them. Another idea would be to renovate a derelict building and develop it as an artistic or community center or a conference center.

Related Reading: Tax Benefits of Starting a Small Business

Serve Existing Businesses

Many small towns lack a source of business know-how. You could target existing businesses by providing services and skills that are harder to come by or that are in demand in small towns. For example, you could run a business providing virtual assistants, accountants, web design or business coaching to existing businesses. With the wealth of government contracts available to businesses in rural areas, you could help other businesses to find and apply for these contracts.
Supply What's Missing

In many small towns, there are few places for people to spend leisure time. A business that combines two or more leisure activities may be welcome. For example, you could open a movie theater with a bar or coffee shop in it or a shop that boasts space for holding art classes. Or, your business could take advantage of popular local activities by catering to bird watching, hiking or biking enthusiasts and provide supplies and instruction.

http://entrepreneurcrunch.com/category/entrepreneur-success-stories/
http://entrepreneurcrunch.com/2015-hot-business-ideas-zimbabwe/

Pirate taxis are cheating the government

Pirate taxis, are cheating government as they are making money without paying any cent as tax. Most of these kombis haven not paid tax because of poor business caused by pirate taxis. The  pirate taxi owners are making more money than the kombis as they have a profit of about $40 per day after fuel expenses while kombis were making $15. They do not pay anything to government but kombi             operators which make $15-$20 are required to pay tax.Registered commuter omnibus operators have been complaining of the hundreds of private cars operating illegally, mostly in low density suburbs, especially Sunninghill as well as in some high density areas such as Luveve and Pumula  and want the policy implemented soon.The pirate taxis are “causing havoc” in the city’s public transport system.Those private cars  even put fake registration number plates and cause all sorts of problems, even for the police, as you saw what happened when a police officer was dragged by a private car and later died.  They don’t pay taxes but steal our business as registered commuter omnibus operators but we are still expected to pay presumptive tax and other dues to government.

Pirate taxis in Bulawayo

http://nehandaradio.com/2014/12/08/pirate-taxis-vex-kombi-operators-bulawayo/
http://www.chronicle.co.zw/pirate-taxis-give-police-hard-time/ 

Small to Medium Enterpises Willing to Pay Tax

Small to Medium Enterprises and Co-operative Development Minister Sithembiso Nyoni  said small enterprises are willing to pay tax to the Zimbabwe Revenue Authority like other businesses.The SMEs want to pay tax like other Zimbabweans. They are ready and willing to pay tax. All they want is to be treated like businesspeople. Informal sector is business, and the business must pay its obligation and abide by the law. In January Zimra announced that it will start taxing SMEs to widen the revenue base.Sanctions-induced economic hardships have seen firms closing and most unemployed people turning to the informal sector for survival.

 
http://www.thezimbabwedaily.com/zimbabwe/22721-give-smeinformal-sector-its-due-space.html

Six Small to Medium Enterprises to exhibit under ZimTrade at ZITF

SIX small to medium enterprises will participate at the 56th edition of the Zimbabwe International Trade Fair under the ZimTrade banner as the organisation continues to nurture the sector into viable export entities. ZimTrade chief executive officer Ms Sithembile Pilime said the SMEs, drawn from the clothing, leather, furniture and engineering sectors, were producing quality products that could compete in the local and export markets.These SMEs are drawn from those companies that have demonstrated potential to export and/or are graduates of our Export marketing Training Programme now reviewed and rebranded to Marketing and Branding for International Competitiveness (MBIC).

ZimTrade would also capitalise on the exhibition to disseminate information on its product and service portfolios which would include free demonstrations on how companies could benefit from the upgraded ZimTrade’s Trade Information Centre. Speaking on what the organisation was doing to assist SMEs, Ms Pilime said they had been carrying out export awareness seminars meant to capacitate SMEs with requisite market and product specific intelligence to penetrate export markets.

Six companies participated under the ZimTrade banner last year and these were drawn from the clothing, footwear, arts and crafts and engineering sectors.

Meanwhile, at least 40 local business representatives are expected to attend ZimTrade’s Executive Development Programme on International Trade in Bulawayo tomorrow.

 

The importance of small businesses in the local economy.

While small businesses may not generate as much money as large corporations, they are a critical component of and major contributor to the strength of local economies. Small businesses present new employment opportunities.Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established.

 Small businesses also help stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations. Small businesses tend to attract talent who invent new products or implement new solutions for existing ideas. Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing.

Many small businesses also possess the ability to respond and adapt quickly to changing economic climates. This is due to the fact that small businesses are often very customer-oriented. Many local customers will remain loyal to their favorite small businesses in the midst of an economic crisis. This loyalty means that small businesses are often able to stay afloat during tough times, which can further strengthen local economies. Small businesses also accumulate less revenue than larger corporations, meaning they may have less to lose in times of economic crisis.

Flower sellers in Bulawayo

Economic meltdown in Bulawayo

Although the massive economic problems Zimbabwe is grappling with are not unique to Bulawayo, it is probably the country’s hardest-hit city. It has seen countless company closures and downsizings. Many people have relocated their businesses to Harare, leaving the once productive industrial areas of Belmont and Donnington bereft. 

A significant number of factories have been turned into shops and warehouses for imported goods manufactured elsewhere. 

  The likes of (supermarket retail chain) TM, Delta (Beverages) and Datlabs are some of the few companies that have remained viable and that is only because of external funding support from South Africa, some industries can no longer be revived, especially those in textile and footwear, because of competition from cheaper imports.

 This former factory in the Belmont industrial area has been converted into a Pentecostal church.