10 real benefits of Standards to Micro, Small and Medium Enterprises

Maurice Musuga

Are you a Micro, Small or Medium-sized Enterprise (MSME) looking to expand your business?

There is no global agreement on the definition of MSMEs, but one thing virtually every country does agree on is that they are essential for economic prosperity.

Small companies make up the vast majority of businesses in most countries and employ a significant percentage of the global workforce. World Bank estimates that MSMEs form around 95 % of existing businesses and employ approximately 60 % of private-sector workers across the World. It is also estimated that they contribute about 50 % to world gross value add (GVA).

According to the Uganda Investment Authority, Uganda has an extensive MSME sector which accounts for approximately 90% of the entire Private Sector with over 80% of manufactured output contributing about 75% to the gross domestic product (GDP) and employing more than 2.5 million people.

Standards can transform an MSME into a large Enterprise through the following ways;

 1. Standards help MSMEs to improve the quality of goods and services.

A standard is a technical document designed to be used as a requirement, rule, guideline or definition. Standards enable MSMEs improve the designs of their products, give guidance on the appropriate raw material for products, streamline the performance of various services, improve the manufacturing and hygiene systems, design appropriate testing requirements,  use appropriate packaging and use the right labels on their products.

2. Standards help drive growth, cut costs and increase profits

Today’s Customers buy quality! Uganda standards help MSMEs find new markets for their quality products and therefore their ventures become more profitable.

3. Standards give businesses a competitive edge

Are you certified by UNBS? What proof do you have to show that you are implementing Uganda Standards? Are your clients aware that you implement Standards? Well implementing Standards will keep you at the cutting edge with regard to the quality of our products and services, which in turn maintains good customer relations, business confidence, output and profit.”

4. Standards open up export markets for goods and services

Uganda Standards are harmonized and equivalent to Standards of other countries so if your product is certified in Uganda, it is acceptable in other countries.  Take advantage of Uganda Standards and expand your export market potential.

5. Standards open doors to new customers and strengthen your existing business

Using standards can offer a set of powerful business and marketing that can help your business demonstrate quality to your customers hence winning you new ones and expanding your market.  Uganda Standards can help MSMEs fine-tune their performance and manage the risks they face.  This will enable them operate in a more efficient and sustainable way consequently strengthening their business.

6. Standards help you compete with bigger enterprises

An MSME with only large competitors can have a rough time finding market for their products, most especially in this age of relentless marketing and advertisement.  The Uganda Standards that must be adhered to are the same regardless of the size of the enterprise. To encourage MSMEs to embrace quality standards, government is providing support especially in training and advisory services as well as certification through UNBS and its parent Ministry of Trade, Industry and Cooperatives (MTIC). These two institutions have been preparing for this task and have both established departments responsible for MSMEs.

7. Standards enhance credibility and secure customer confidence

It goes without saying that while Poor Quality will kill an enterprise, Good Quality pays.  We all need to understand that producing and selling substandard products is not sustainable.  MSMEs producing products of poor quality products runs a risk of protracted losses. Furthermore, if authorities like UNBS, KCCA, DDA, etc. find out that your products are a health hazard, they will stop the production in order to protect the consumers of the products.  Imagine the losses you will be counting not only in terms of investment but also endless lawsuits and fines from the various industry regulators.

Consumers today are looking for quality and safety in products. Consuming Quality products will enhance confidence in a product and confidence in the manufacturer.

8. Standards sharpen your business processes and increase efficiency

Quality improvement is not magic!  Quality improvement for MSMEs is not very difficult but requires concerted effort and consistency. The first step is to approach standards experts at UNBS. They will explain the required standards and give you guidance on quality improvement.

The key quality control requirements include: good hygiene practices, inspection of raw materials, control of the production processes, proper hygiene, proper use of personal protective equipment, equipment calibration, proper labeling and packaging, testing of product samples in UNBS labs or any other recognized labs, keeping appropriate quality records, training workers, and control of non-conforming products among others. When an enterprise implements the above, the products will meet quality standards and on applying to UNBS for certification, however small the enterprise is, it will get the certification.

9. Participate in the Development of Uganda Standards

A study conducted by the International Organization for Standardization (ISO), indicates that for many small businesses, making the decision to participate in a standards development process remains difficult, as managers are typically reluctant to allocate resources to a long-term process that promises, at best, intangible benefits. However, if the company is committed and participates actively in the process, the return on investment can be substantial.

The case is not very different for the Uganda’s case as it is mainly the big companies that are involved in the development of Uganda Standards.

The principal benefits of participation in standards development include visibility, in-depth understanding, innovation, competitive advantage, networking possibilities, and opportunities to access potential customers. In other words, non-participation in standardization hands decision making over to the competition.

10. Standards help you comply with regulations

Uganda has a multitude of regulators for the different areas of the economy. The process of developing Uganda Standards brings together all the stakeholders in a particular sector which includes regulators.  What standards provide is an opportunity to demonstrate that you are doing things by the book.  The certification to the different Standards is your chance as an MSME to exhibit the quality of your products and systems not only to your customers but also regulators in various sectors.

 

The Writer is a Senior Information Officer at Uganda National Bureau of Standards.