Coaching, the best method to energise SMEs for new normal

Money is only a part of business, knowledge is the most vital and through coaching the SMEs will go in-depth and study more about their business and will come up with their own strategies to overcome the present dilemma

A large number of SMEs are facing a dilemma at present on what to do next to recommence their businesses to cater to the new normal situation. The reason for this is their lack of knowledge on how to face such a situation as this situation was never expected. On top of that many SME entrepreneurs lack proper management, technical and financial expertise – an inherent risk in the industry.  

Why SMEs?

Given that 75% of the total enterprises in Sri Lanka are SMEs which provides 45% of employment in the country, it is of utmost importance that the Government take a clear path in educating these entrepreneurs on how to handle this situation with the idea of creating better scope for them an opportunity we should not miss. This will make or break the Sri Lankan economy in future and our assessment is that if properly handled it will create a set of battle-hardened SMEs who will rise to any occasion, thus a better Sri Lanka in future. 

Who should sponsor?

‘Who should take the lead to energise these SMEs?’ will be the next focal point. Commercial banks in Sri Lanka despite tough times have made good profits as per latest half yearly results published. In fact, many of them have over 25% profit after tax compared to the corresponding year. Hence it is a duty for these banks to rise up and give back something to their loyal SME customers who have stood by them despite tough times. Further these banks should take the lead in this aspect and relieve the Government and other related organisations who have been involved in one of the toughest battles of our time, the COVID epidemic.  

Why coaching?

Coaching is a process to support effective progress of a coachee (in this case the SME entrepreneur) in which the coachee’s role is to do the hard thinking and to stretch him to move rapidly and effectively to the achievement of a defined goal within a short period (ideally within three months). 

Why we are not using counselling in this situation is that refers to the past and outcome is based on a problem and the duration of counselling varies. We should also not use the mentoring process as it is an ongoing process based on advice by the mentor. Coaching is forward-thinking and looking for solutions within a fixed period of time. 

 How does coaching work?

Coaching starts with a dilemma and in this case the dilemma is the SME entrepreneur wants to recommence his business to cater to the new normal but does not know how to handle it due to lack of knowledge to face such situations. The steps in coaching after finding the dilemma is as follows:

1. Clarify the current reality

This refers to the current status of the business. Let’s take the example of a proprietor of a hardware shop operating in Gampola. Their revenues which were around Rs. 3 million p.m. before COVID has come down to Rs. 1 million p.m. and that is a huge concern for him. He has tried different options to overcome this situation and thinks that once the lockdown situation improves there will be substantial demand for construction material, especially tiles. Further, he is aware that the Lanka Tiles agency for the areas of Gampola and Nawalapitiya has fallen vacant.  

2. Help develop a SMART goal 

SMART refers to Specific, Measurable, Achievable, Realistic and Time-bound. In this case a smart goal for the proprietor of a hardware business of Gampola would be to get the agency of Lanka Tiles for the areas of Gampola and Nawalapitiya within two months in order to increase his revenue by Rs. 3 m per month.

3. Help develop a couple of strategies    to achieve the  set goal

Strategies refers to the overall approach to achieve the goal and in this case let’s assume the proprietor of the hardware has come up with the following strategies:

Get assistance from a friend who is the current agent of Lanka Tiles, Matale for an introduction to Lanka Tiles.

Get the current banker, Pan Asia Bank, to assist in getting a bank guarantee for the agency.

4. Help develop about 3 SMART  actions to achieve the goal 

The following will be some of the SMART actions;

• Meet the friend who is the Lanka Tile agent within one week and obtain the necessary introduction to Lanka Tiles.
• Meet the National Sales Manager of Lanka Tiles within one week after meeting the friend and obtain all necessary details to become the agent for Gampola and Nawalapitiya. 
• Meet the Bank Manager within one week and get details on how to obtain a bank guarantee for the agency.

5. Help create structures (reminders)  to achieve actions 

Reminders for actions can be set by way of a calendar note in the phone, a diary note or requesting the cashier or another worker to remind so that nothing is missed out.

6. Monitor and follow up the progress

During the coaching period continuous monitoring and follow up is required in order to achieve the set goal, a trusted method for this is to maintain a coaching progress work sheet. In fact, 96% who have undergone professional coaching have indicated that they would repeat the process for the same circumstance.

A banker’s role in coaching SME customers in current context

Coaching is a professional job, either the bankers should get the necessary qualifications on coaching or get professional coaches to assist the bank in setting up a program to assist the SME customers in achieving the defined goal within the next three months. 

The suggested method is group coaching under business coaching. Banks can define groups based on different types of businesses such as traders, manufacturers, service providers, etc. or different levels of businesses such as micro, SME, mid corporate and corporate as the goals will be similar in such groups and taking one on one coaching will be a tedious task. 

Money is not the only source to energise an economy

Professionals know how different it is when you step in to any new classroom at any age and what a difference it makes to our lives. It’s like we are re-emerging and that is what we need to do to energise the local SMEs. 

Money is only a part of business, knowledge is the most vital and through coaching the SMEs will go in-depth and study more about their business and will come up with their own strategies to overcome the present dilemma and will emerge better businessmen, thus making Sri Lanka an economic powerhouse in the new normal – let’s assist them!

[The writer, MSc Mgmt. (USJ), FIBSL, FCPM is a Certified Life and Business Coach from the Sri Lanka Institute of Training & Development and is a Banker by profession.]