Building a stronger foundation for business growth
Three advocacies to push through in 2017
New Years’ are exciting in the sense that it marks a brand new start, a start date to implement changes for personal growth, finance and future. There’s loads of excitement in this space, some might start their business next year, and others might want to implement strategic moves starting January 1. Whatever that is, what’s good is that at least there’s a date in our calendar to motivate us to change — for good.
Looking at the growing space of the start-up sector around the world as well as the spurring growth of the start-up sector in the Philippines, I take it seriously to wish that regulatory bodies around the world will take bolder steps to support the start-ups and micro- small- and medium-sized enterprises (MSMEs). Stepping back, there are a few items in my advocacy wish list which might or might not be applicable around the world as I am writing in the context of my home country — the Philippines.
Easing compliance with regulations
Ease of compliance with laws and regulations is the most important aspect in improving entrepreneurialism in countries. While laws and regulations are meant to set a stricter bar to provide consumer and investor protection, more efficient compliance schemes should be implemented to allow businesses to be able to do business without excessive burden.
A key area here is compliance with tax regulations which is filled with grey areas if not dark matters. Start-ups and MSMEs are typically thought as the “target” for tax assessments — the lack of understanding of tax regulations and taxpayer rights provides a magic recipe for corrupt officials to concoct a massive assessment. Better understanding of regulations and rights, rather than relying solely on accounting and finance professionals would be key. The ability to know if you’re doing things right is the first step to ensuring that you don’t need to enter into any deals with corrupt officials.
Challenging the regulatory landscape is one of the things that we’re seeing as changing in the coming years with stronger actions taken by the businessmen not succumbing to illicit practices. There are two ways to fight corruption, cleanse the innards or protest against malpractices. Looking at government’s inability to fight corruption on its own, public awareness of their legal rights would be key to prevent abuse of authority.
So the question is, would government actions be quick enough or should we just meet in the middle? Many businesses are struggling with compliance without taking any action to fight corruption, the old system of succumbing into bribery have breed greed and inaction in those charged with governance of the fiscal regulations.
Improving transparency in business
Business transparency is key to allow businesses to expand, start-ups and MSMEs are typically closely-held businesses owned by the original incorporators or family members. With this traditional business structure — business processes and systems are not clear; trust and confidence is not established; employees are seen just as employees of the companies. This is totally different from the corporate structure of well-established large corporations.
The limitation of the business knowledge in start-ups and MSMEs serves as an inherent limitation to allow the business enterprise to grow. In a family business, the limitation is the number of family members. In a peer established business, the limitation is the number of peers in the business. To grow the business beyond these inherent limitations, there needs to be a better mechanism for start-ups and companies to train better personnel to hand-over the business in the future.
Improving transparency in business would follow ease of compliance. The challenge of compliance limits the amount of information that companies are willing to share to the government — it is a case to preserve your right against self-incrimination. However, transparency is also a growth mind-set which start-ups and MSMEs have to begin developing — our employees in the future will want to be better partners of the company rather than mere actors behind the scene of the business (see: Future of work— Part 3).
Building sustainable mind-set
The world as is it right now is resource restricted and companies have to begin thinking outside the box. What’s exciting is the growth of companies that aim to help resolve food supply shortage, excessive garbage and power supply shortage. These are interesting moves for companies who can see cash in trash, but more collective effort needs to be done.
Building a sustainability mind-set for the future of business should be a priority for start-ups and MSMEs. The ability for smaller-sized companies to adopt more efficient use of economic resources is a lot faster due to its size compared to large corporations.
However, the sustainable mind-set is not just about being green — it’s also about making your business more resilient and the ability to think ahead. There are a lot more things to consider as we step into 2017 on growing your business. It might be rethinking how you do business as a sole proprietorship, how you can boost mutual trust and confidence in your partnership, and how you could expand your corporation beyond your current size.
These are just a few items which business owners have to begin thinking about as you enter 2017, there’s more work than excitement, but that’s what makes New Years exciting. To all, Happy New Year!
Filbert Tsai is an accounting advisor based in the United Kingdom. Professionally, his sector specialisation is power and utilities and provides technical advice to companies and governments. Personally, he is an advocate of start-ups and small businesses, his Facebook page — Ask the Accounting Advisor — provides free business advice to budding Filipino entrepreneurs.
