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Success Factors Necessary for SMME’s Growth: A Summary of the Narratives of Successful Contractors

Success Factors Necessary for SMME’s Growth: A Summary of the Narratives of Successful Contractors. By. Abimbola Windapo University of Cape Town . Acknowledgements. Construction Industry Development Board 16 Successful Contractors who responded to the personal interviews.

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Success Factors Necessary for SMME’s Growth: A Summary of the Narratives of Successful Contractors

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  1. Success Factors Necessary for SMME’s Growth: A Summary of the Narratives of Successful Contractors By AbimbolaWindapo University of Cape Town

  2. Acknowledgements • Construction Industry Development Board • 16 Successful Contractors who responded to the personal interviews

  3. Presentation Outline • Success and Growth Defined • Need for Success • Is there a “recipe” for success? • Study Methods: Successful Contractor Narratives • Is it Possible for SMME’s to Grow Successfully into Large Companies? • Success Factors Necessary for Company Growth • Environmental • Leadership, Company Organization Structures & System • Time • Conclusion and Recommendations

  4. Success & Growth Defined • Success: the attainment of an aim or status • Growth: the process of undergoing development or expansion (maturity & capabilities) Source:http://daimanuel.com and growth2.jpg

  5. Need for Success • There is only one alternative to success: failure • Construction Business/Industry is endangered • Skills attrition and sustainability • Employment generation Source:animals.nationalgeographic.com

  6. Is there a ‘Recipe’ for Success? • There are no hard and fast rules that can be set for commercial success • However, certain clear arrangements are evident in successful companies

  7. Study Methods: Successful Contractor Narratives

  8. Is it Possible for SMME’s to Grow into Large Companies? • Yes • Lubbe Building & Electrical Contractors was founded in 1981 • 1990 -contract for construction of high-rise flats in Israel • 2010 – Generation of Turnover + R93m Source:Lubbe Construction (Pty) Ltd Profile

  9. Success Factors Necessary for SMME’s Growth

  10. Environmental Factors • Opportunities: - • Government Policies/Regulations • Type of Market • Economic Conditions • Industry Structure • Threats to overcome: - • Client’s Unstructured Methods of Payment • Government’s unclear method of Procurement

  11. Leadership, Company Organization Structure & Systems • Strengths & • Weakness

  12. Leadership Factors • Aspirations (mission & Vision) • Capabilities/Competencies • Style of Leadership • Type of Leadership • Leadership Role • Values, Character – Behaviour and Personality • Experience Source: b2binternational.com

  13. Type & Size of Business Structure • Founding Teams – • Differentially able to navigate within the constraints of the founding environment • Past experience together in a construction company • Experience together were varied but relevant

  14. Resources Available to the Company at Inception • Weakness - • Lack of Financial Resources • Source of Finance: - • Severance Benefits • Family • Mortgaged Properties • Savings Source: myspaceantics.com

  15. Key Strategic Management Decisions made by Company Leader (s) • If there is an abundance of resources, especially finance, young organizations will grow • Without adequate cash reserves, the company only works for the bank Developing a Strong Financial Base • Good quality products & services delivered at the right time • Maintaining good relationships with clients and suppliers – paying on time Track Record Acquisition of necessary tools & equipment • Assets can be used a surety for loans • Can be used even when mortgaged • Company can bid competitively for projects

  16. Key Strategic Mgmnt Decisions essential for organizational performance cont’d • Help in effectively executing its business operations • Succession plans – right attitude & work ethos Developing & maintaining a strong work force • Companies spread across at least two different locations • Diversification into more than one service and or product area Company Diversification Geographically & by Products/Services • Leadership spanned across two steps of command/hierarchy • Responsibility & authority are given to subordinates • A path is created for followers to achieve their goals Company Organization

  17. Efforts Put into Running the Business Pushing until it gives way Procure Profitable Contracts Running Sources: guardian.co.uk; benjaminkarner.worldpress.com Rowing –Non Stop

  18. Time Dependent Factors • Time to grow, mature & obtain experience • Adaptability • Strategies are time related to: - • Economic Conditions • Recessions • Economic Booms

  19. Conclusion & Recommendation It is imperative that SMME’s put clear arrangements in place (success factors) so as to grow & develop successfully, once the door of opportunity opens. Allowing time to grow & mature, & ability to adapt to changing conditions is also important Source: magazine.enlightennment.org

  20. Thanks for Listening

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