IN today’s turbulent business environment, predominantly with the economic recession, inflation and the disruptive novel coronavirus, COVID-19, pandemic, strategy becomes the main source of competitive advantage for businesses and organisations. However, for a strategy to be meaningful, a business must have a reliable, working and organisational structure.
Thus, this piece is to share the importance of business formalisation and the need to have organisational procedures, established rules, and responsibilities assigned, regardless of the business size, employee size, revenue generation, or the range of the business function.
To substantiate the perennial issue of informality and lack of structure among businesses, a survey was conducted on MSMEs in Lagos State, the commercial nerve centre of the country to get more insights. More so with such data sets if available, it can help to identify areas of weakness and strength of the business and also ensure no part of the business operation or customer experience is overlooked. With good structure, businesses can provide exceptional customer service experience and audited financial statements useful for government procurements, services and public contract qualifications.
For several reasons, large firms may have a comparative advantage over small businesses mainly on business and organisational structure. Nano, micro and small businesses are poorly structured all across the country; therefore formality and adequate structure are advised for business sustainability and growth. It is also apparent that SME operators need to adopt good governance, prepare a financial statement as at when due, and keep proper records.