SMEs seek more skills to spur development
SMEs seek more skills to spur development
Lao entrepreneurs who are operating small and medium businesses will struggle to turn a profit if they lack skills and knowledge in regards to business management.
Most small business operators do business because they have money but they don't think about business management, planning or market studies, Director of the Policy Research Division of the Small and Medium Enterprises (SME) Promotion Department, MrSengphachanhSimangkhala said.
Many business units have stopped operation due to poor management and they don't know who their customers are or who their competitors are, he said.
Some operators do business by following other people as they see that business is good but end up closing after not too long, he commented.
He advised that people should learn and receive consultation from experts or experienced business operators before entering into business.
Our department has already established this mechanism for business services, which currently comprises almost 20 companies as members but there are a very small number of business operators seeking out our services, said MrSengphachanh.
We are currently providing only training despite the fact the department has tried to promote the many services it can offer via different methods, he explained.
Some businesses do come to seek services with the department but only after they have struggled in their business operations rather than seeking advice initially.
The issue will be one of the major problems when it comes to developing Lao business operators to compete with those from neighbouring countries and internationally.
There are still large numbers of SMEs that find it difficult to access funding as they do not discuss such matters with the department or other relevant sectors.
Meanwhile some business operators have no business plan or good accounting systems, which is a ma in reason the bank cannot release the funds for them, MrSengphachanh said.
To promote SMEs in Laos to achieve good progress and expand, they will require more business skills in management and operation and will not be able to run smoothly without cooperation and assistance from the relevant government organisations.
This development will also require m ore collaboration between business sectors and the establishment of cluster systems, he said.
Different business units do not share and meet with other business operators for seeking experience and learning from each other, MrSengphachanh added.
In the past, the government carried a lot of burden in regards to credit as many farmers, especially pig and fish breeders in Vientiane, collapsed after they could not compete with foreign breeders.
The main reason was the farmers' lack of skills in terms of marketing, access to funding and good management systems.
