The absence of a deliberate growth strategy remains the primary barrier preventing Zimbabwe’s entrepreneur-led firms from evolving into sustainable institutions, experts have said.
Overcoming this requires a fundamental mindset shift within the SME sector.
SMEs are widely regarded as the backbone of Zimbabwe’s economy, accounting for the majority of business activity and employing a significant share of the workforce.
Most Zimbabwean SMEs operate informally, limiting their ability to access finance, scale up operations and contribute fully to national economic growth.
In recognition of the SMEs’ importance, the Government has introduced initiatives to formalise SMEs, including simplifying business registration processes, promoting financial inclusion and supporting capacity-building programmes.
The efforts are being supported through institutions such as the Small and Medium Enterprises Development Corporation (SMEDCO).
This is designed to integrate SMEs into the formal economy and unlock their growth potential.
Despite this progress, industry experts say structural and mindset challenges continue to hold many businesses back.
Speaking at the Zimpapers Public Lecture Series recently, SMEs Association of Zimbabwe founder and chief executive, Mr Farai Mutambanengwe, said many local enterprises remain trapped at the subsistence level because they are established without a long-term vision.
“The single biggest reason an entrepreneur-run business fails to become an institution is the mindset in which it is established,” he said.
“A lot of businesses are set up for survival or as lifestyle ventures, but without a growth strategy to become national, regional, or even international players.”
Mr Mutambanengwe noted that while the SME sector has expanded rapidly in recent years, the growth is largely informal and lacks the structural planning required for scalability.
“If you start small with no intention to grow, that becomes the ceiling of your business,” he said, warning that without deliberate planning, many enterprises will remain confined to limited markets and short-term gains.
Echoing these sentiments, ACR Solutions chairman and executive coach Mr Bothwell Nyajeka stressed the importance of transitioning from founder-driven operations to systems-led institutions.
Drawing on more than three decades of corporate experience, he said sustainable businesses are built to outlive their founders.
“As an entrepreneur, you are driven by your own energy and ideas, but institutions are designed to endure beyond individuals,” he said.
“That is why companies that have existed for decades focus on strong governance, quality products and continuous reinvention.”
Mr Nyajeka added that enduring organisations evolve beyond their original business models, often diversifying across sectors in response to changing market dynamics.
“You must constantly reinvent yourself. What starts as one product or service must adapt to changing markets,” he said, emphasising the importance of hiring capable personnel to support long-term growth.
CBZ Holdings head of SME banking, Mr Batanai Mukonzo, said a key distinction between a small business and an institution lies in sustainability and independence from the founder.
“If a business cannot function in your absence, then it is still a job, not an institution,” he said. “We need a shift from individual-centred enterprises to process-driven organisations.”
Mr Mukonzo highlighted that limited access to finance remains a major constraint for many SMEs, largely due to weak documentation and informal business practices.
“Entrepreneurs often rely on handshake deals with no records. When they approach banks, there is no evidence to support their story,” he said.
“Documentation, governance and clear systems are essential if businesses are to be bankable.”
He added that a clearly defined market strategy and value proposition are equally critical, warning that many entrepreneurs operate without focus.
“Most are hustling across multiple opportunities without clearly stating what they offer the market. A strong value proposition is what differentiates a scalable business from a survival activity,” he said.
Mr Mukonzo also underscored the importance of governance structures, including advisory boards, to strengthen accountability and improve decision-making.
The Zimpapers public lecture was held under the theme ‘Beyond the Individual: From an Economy of Entrepreneurs to an Economy of Institutions’. The event’s key sponsors were Old Mutual, Minerva Risk Solutions and Zimnat-herald
