Running sustainable businesses in a challenging economic landscape: The case of small and medium businesses in Ghana

In an era marked by economic uncertainties, running a sustainable business is not just an ethical imperative but a strategic necessity.

This article explores the intricacies and strategies involved in maintaining a sustainable business model amidst a challenging economic landscape, examining how SMEs can thrive while upholding their commitment to sustainability.

There is no gain in saying that Small and medium-sized enterprises (SMEs) play a crucial role in Ghana’s economy and are engaged in many economic activities.

They contribute significantly to employment, GDP, and industrial development. These businesses span various sectors, including agriculture, manufacturing, services, and technology. Agriculture is a significant sector for SMEs in Ghana, with many engaged in farming, processing, and trading of agricultural products. Manufacturing SMEs focus on areas like textiles, food processing and craft-making, contributing to both local consumption and exports.

In the services sector, SMEs are active in retail, hospitality, and ICT, often adapting to changing market demands and technological advancements. The rise of digital platforms has enabled many SMEs to expand their reach and improve their operations.

In recent years, the Ghanaian government, international organisations and various well-meaning institutions including Graphic Group and Access Bank deliberately provided support to SMEs through training, funding and policy initiatives, recognising their importance in driving economic growth and development.

For these reasons, most SMEs in Ghana have become more dynamic and diverse, reflecting the country’s entrepreneurial spirit and its potential for further economic development.

That notwithstanding, the recent global economic slowdown is impacting the operations and sustainability of many SME businesses globally, not excluding the Ghanaian businesses.

Sustainability, traditionally viewed through an environmental lens, has now expanded to include social and governance aspects. However, in a volatile economy characterised by downturn fears, supply chain disruptions and rising operational costs, businesses face a paradox. The cost and complexity of implementing sustainable practices often conflict with immediate financial concerns. This scenario demands a nuanced approach to sustainability, one that aligns with both ethical responsibilities and economic realities.

In view of the challenges facing the SME community in Ghana, this feature has presented a few areas of concern that SMEs must consider improving in order to ensure sustainability in this challenging economic landscape.

Cost-effective sustainable practices:
In times of economic strain, cost-effective sustainability initiatives become vital. Practices such as energy conservation, waste reduction and recycling can lead to significant cost savings. For example, reducing energy consumption not only cuts costs but also decreases the carbon footprint.

Innovative business models:
The circular economy model, which focuses on reusing and recycling materials, provides an opportunity for businesses to be sustainable while managing costs. By designing products with reuse in mind, companies can reduce dependence on raw materials and mitigate the impact of price volatility.

Leveraging technology for efficiency:
Technological advancements, including AI, blockchain and IoT, can be harnessed to improve efficiency and sustainability. For instance, AI can optimise supply chain operations, reducing both costs and environmental impact.

Stakeholder engagement and collaboration:
Building strong relationships with stakeholders — from suppliers to customers — is crucial. This involves open communication about sustainability efforts and collaborating on shared goals. In challenging times, these relationships can provide critical support and innovative solutions.

Long-term Investment in Sustainability:
Despite economic challenges, long-term investment in sustainability can lead to significant returns. This includes investing in renewable energy sources or sustainable materials, which may have high upfront costs but provide long-term savings and resilience against market volatility.

Balancing short-term pressures with long-term goals

The key challenge for businesses is balancing the need for immediate financial stability with long-term sustainability commitments.

This requires a strategic approach, where decisions are made with both current economic realities and future sustainability goals in mind.

Businesses that manage this balance effectively can achieve a competitive edge, as consumers and investors increasingly favour companies with strong sustainability credentials.

Conclusion

Running a sustainable business in a challenging economic landscape requires resilience, innovation and a commitment to strategic planning that encompasses both immediate and long-term objectives.

By integrating sustainability into their core strategies, businesses can not only navigate through economic uncertainties but also emerge as leaders in a new era of responsible and sustainable commerce.

The journey is complex, requiring continuous adaptation, but it presents an opportunity to redefine the role of businesses in creating a sustainable future.

Disclaimer: All quotes, extracts and excerpts are duly acknowledged.