Ninety percent of Saudi small and medium enterprises (SMEs) are prone to fail in their first year due to the absence of durable planning and reluctance of their owners to make feasibility studies, local media said quoting an economic expert.
The SMEs are facing multiple obstacles, including weak capital, competition, non-availability of skilled manpower, and government bureaucratic measures, Mohamed Sulaiman, member of the Saudi Management Association (SMA), said in a lecture at Riyadh Chamber of Commerce and Industry (RCCI) recently.
He said the SMEs constitute 90 percent of the economies of the developing and developed countries and, further, represent the biggest employer of manpower in these countries.
The SME sector has a number of financing agencies in the Kingdom but each owner of the SME should undertake his responsibility toward his firm, including planning, organizing, directing, and controlling, he added.
The existence of a six-month operating plan of an SME firm is a necessity, which will help determine the project environment, its points of failure or success and, therefore, take appropriate decisions, he said.
He stressed the need for good planning in the SME projects based on credible information, which will lead to the success of the company’s targets taking into consideration that such targets have to be measurable and linked to a specific time limit for implementation.
The expert admitted that planning in an SME project faces a series of obstacles, including non-availability of aiding means and absence of a clear-cut vision.
There is a close link between strategic and operational planning, he said, adding that they carry similar steps but vary in details. Many of mega companies in the public and private sectors give no care to operational planning and only focus on strategic planning, he said.
The RCCI’s Riyadh Center for Development of SMEs organized the lecture on skills of operational planning, in coordination with the SMA.
Expert: 90% Saudi SMEs fail in first year due to lack of planning
