We continue to look into issues that we are concerned about and whether we can have some influence to change things around. So far we have looked at a number of strategic and administrative issues of concern. Today we will look into some quality aspects of our business.
As a business owner you are responsible for delivering quality goods and services. So do you have the knowledge and the skills to operate in the sector you have chosen? Did you take the effort to be trained in the specifics of your business, the operations of the equipment and machines, and their maintenance? Do you know what to do in case things go wrong?
I know of examples, whereby investors recognised the opportunities in a specific sector and bought the equipment to manufacture the goods. However, factors related to the different altitude, temperatures, humidity, availability of raw materials, etc., caused the equipment not to function optimally. As a result the machines are now standing idle. My advice is to acquaint yourself well enough to operate the business. Alternatively, hire experts to support you here and have your workshop staff trained. When you buy equipment from abroad, it is not uncommon that the supplying factory may be able to send a technician to help you install the equipment and train your staff to operate it. You will do well to negotiate for such services while buying equipment and machineries. This way, your guarantee will probably remain valid, while maintenance and problem shooting is supported. Mind you, quality is particularly important in case of exporting. The standards of many products have been defined internationally and sub standards will be rejected. And only you are responsible in the end and you need to be consistent over a period of time. Now, in the absence of sufficient vocational training, many companies face problems in getting it right and in the end accept the mediocre level of quality for what it is. In most sectors we find products that are sub standard and customers may prefer imported goods as a result.
Now, customers are often tempted to go for the cheaper option or to bargain for the last possible price. I have learnt though that going for the cheaper option often makes me have to go back and do it again or that I have to buy another brand after all. Consumers will always look for a good deal and that is a healthy habit. Good and cheap don’t always go together though. Customers will do well to inform themselves about the products and services they are buying, compare prices and quality. Get value for money is my suggestion. Quality that lasts may be cheaper in the end. But how do you arrive at the price you ask for the goods you are selling? Do you indeed offer value for money? In other words, does the price you set for your products represent the quality you promise? What does it cost you to produce what you are selling? And how much profit are you making? What do you include in setting your price? Setting your prices is critical and yet many business owners do not do this in a systematic way. Amongst other things, the price of an article defines who your customers are. If the price is low, most people may be able to afford buying your products or services. If the price is high, then they will be available for far fewer people. Price determines what the demand for the product or service is and who will buy them. The price must be attractive to customers and must in the long run also cover the costs, unless there is a subsidy. Think for a moment about how you set your prices at the moment:
• Do you cover all costs?
• Do you make a profit?
• Do you create an up market and professional image?
• Are you competitive with other businesses who sell similar goods or services?
• Is it a fair price, representing the quality of the goods you are selling?
There is also the other side of the coin. Do we appreciate what it takes to manufacture quality goods in Ethiopia? It is not easy, when you have to compete with all kinds of cheaper, sometimes low quality imported products. If we seriously want our local manufacturers to develop and grow in this era of globalization, they need support. When I visited the recent Trade Fair in Addis Abeba, I noticed how few Ethiopian producers actually exhibited their goods, while at the same time foreign companies take the opportunity to fill the gap. We should invest in our local producers, paying fair prices, so they can maintain and improve their quality. Also here we can look for a win situation for both parties: a fair price for good quality. With the Ethiopian population growing at a very fast pace, we will need jobs for millions. Successful companies will be able to create employment for the future generation. Sadly though, there are examples of factories that are not doing well because they cannot compete with the cheaper imports. Let us buy from the local producers, we need them, while the country would benefit a lot if investors entered much more in the production of goods then mainly in the service sector. Quality goods, that is.