Sunday, March 1, 2009

What are the issues of running a small enterprise in Sri Lanka - Purely a local perspective

Starting a small enterprise in Sri Lanka is not a big problem. You can register it as a unlimited or limited liability company, with very little capital. With latest changes to the companies act now it is possible to start a company with even a single director.

This article is not about the process of registering or start up of an enterprise but about few issues you may face running the same on shorter term. This article is purely written based on my personal experience and may view differently by academics (as there are only few theories we have developed locally to suit ourselves).

The biggest issue as I see running an enterprise is managing the Human Resources. Our children from the small age are being thought to take a book based approach where more than half of them leave the standard education stream by O/L or A/L's to join the workforce without having any idea of the challenge ahead. This aggravates by the ideology of most entrepreneurs who couldn't comprehend and understand his most valuable asset the Human Resource.

Some areas that need to fix your ATTITUDE as an entrepreneur for the success

* Remember your employees have their own problems.
* This starts with transport, imaging they spend 1/3 of their work life on the road. If you can help this smoothed out they have one less problem to worry. An average of 2-3 hours being spent in traveling for most employees in urban area
* Meals, generally employees cannot afford eating out as well they find it difficult finding places closer their offices or factories and therefore try bringing meals from home. This again would require few more hours of their time.
* The result is an employee working 8 hours a day would fairly spend closer to 12 hours on achieving their work goals. This is not counting any overtime or extra work they need to do if demanded.
* Employee attitude - This is not your problem (at least until they joined your organization) but is the biggest drawback on leading a successful enterprise. Your time and money should be spent largely on this if you need to be successful in the business


you need to integrate yourselves to your employees life style and see how you could make their life more comfortable (I am not discussing here salaries and other benefits which are the basics). If you can provide transport or local accommodation (specially for young workers) , meals you will notice the amount of absenteeism would largely reduced. Strong polices on attendance timing and lunch hours etc will put negative impacts on employees on unavoidable infrastructure situation.

Attitude, on work ethics, customer satisfaction, quality, interpersonal communications are the next major challenges, that you may need to pay attention. Try having informal get together s , team building trainings and some quality time understanding your employees problems. Don't read so many books on too many principles on how to create structured organizations, well structured organizations do requires substantial number of employees with specific job functions (of course you can do this when your organization become bigger). Spend as much money as possible in training your people (don't sign contracts for training them) but make sure they apply what they learn (only you can make it happen).

Spend some quality money in your finance function, nothing will run without the help of a good finance function. But remember finance function is not book keeping, it is beyond that and I would write a separate article on that later.

Finally, if it permits you need to keep your total workforce below 30. Beyond this point you need professionals in HR to take your role, which also require reorganization of your complete operation, and keep watching the 3rd Year, 5th Year and the 7th Year, these are the time frames many companies loose their focus.

Good luck!


  1. This post is none related to the topic.
    I am looking for a Sri Lankan working in a video display technology development and manufacturing. This is to help out an inventor in Sri Lanka. If you can help, let me know how to get in touch with you. - Thanks

  2. sanercomic
    Thanks for writing your experience. If I am MR, I'd make you a minister right away and make you use your experience to rebuild our industrial sector.

  3. Thanks for the comments bro, I think we can do lot of work without getting there. But keeping our people focused in the biggest issue.

    We will try


  4. What is the best way for a Sri Lankan inventor to display his or her products? Is there a government initiative to support that aspect of our society? What can expat Sri Lankans do about it? I have invented things and filed for patents through my employer. I haven't gone beyond that since I am not a typical entrepreneur. I can only help to market inventions in my field of focus only. Sri Lanka needs to hire a successful inventor and learn and apply his or her experience in marketing some of our new inventions. There are some bright technical minds in Sri Lanka and it is a matter of time we give them some hope.

  5. SanerComics,

    I have been living in SL and was subjected to many different levels of the issues mentioned here. I can say I had both perspectives of it. Myself and RC had this discussion a while ago on how to run enterprise in SL.

    Yeah mate, you're right. Employees are the best asset, and they should be supported. Apart from your good points I hv the following addistions.

    - Make it a win-win: Make sure that your employees are always given a chance to build career in their desired path while making that the best use of them for you.

    - Balanced Team: Do not hire 25 fresher and 5 10 yr experienced guys [especially if you are dealing with graduates]. The balance of teh team and hierarchy would work like an oiled machine

    - Do not preach Americanism: Some who lived in west [and received third degree brain wash] try to make the company a territory under US law. You ought to support SL way of life. One of my bosses almost lost a valued employee as he once said "show your F**King document" in a public meeting. This is not America.

    - Be profitable: Some run centers for tax cuts in west. Some run them to have a base to visit SL. But ppl who work will find it hard to accept. You have an obligation to have a genuine business that means profiting and benefiting employees.

    - Do expand: As I mentioned above some companies do not have big strategy. Employees suffer most.

    - Do business no charity: Some western investors think that they do a favor by bringing company to its employees. They think IT IS DUTY of SL to hsupport them. WRONG. You ought to come and start a company to earn money, other objectives are secondary.

    - Do not cry: Some expat investors complain from mosquitoes to check points. They are right, SL is not the most perfect nation. But what is the point. SL remains SL. If you open a cafe in SAudi Arabia, you can't complain for having to clsoe it on Friday.

    - Be objective, do not let minor hurdles to take you down: Running business in SL is tough as systems are not best. You may face issues in customs, power supply, municipal, taxation etc. But tackle them in SL way and do not let them take over your goal.

    - Be Be strategic: Do not expect you SL employees to run it for you. Usually they look at you with a higher view and respect. Generally they expect for your guidance.

  6. Mates!!

    Great support, do you like to be a co authors of this blog. if so please send me your emails

  7. Sujeewa Kokawala

    I live in US now. I have never worked in Sri Lanak (except for an year in a university nominally as a temp teacher). None of the SL companies hired me so I headed west. I have no complain about US business culture. US is like a person with one hundred heads. If you don't like one, there are 99 to choose from. I will never verbally abuse an employee in public.

    If I run a business, my philosophy will be completely different. For me, running a business is all about doing something I love to do and money is secondary. If I want to open up a restaurant, that is because I like to cook and treat people than making money (of cause I won't run it to a loss).

  8. sanercomic, thanks for the invite. I am happy with you as the main writer and supplying random comments once in a while.