SMEs form the bulk of businesses in an economy. The stiff competition causes a fine margin between success and failure. The ultimate goal of any SME is to increase its market share. However, ignoring key aspects of the business may make such a goal seem unattainable. That shouldn’t be the case.
As a business owner, all you have to do is to answer some soul-searching questions about your business. Let’s take a look at four core questions every SME should answer to power up their business.
1. Do we have the right talent?
The employees’ level of expertise will determine whether the SME delivers quality service. An SME will underperform if employees are inadequately trained or work in the wrong position. For example, it would be a bad idea to have your IT expert also performs marketing duties. It would reduce their productivity. An SME should evaluate whether their employees are performing the jobs they are best suited. If the answer is no, then it’s time to look for individuals with the necessary skills and experience to effectively fill these roles. This move will boost the overall output of the business going forward. If your company is particularly reliant one a certain member of staff, it may be tempting to invest in Key Person Insurance – but do your research carefully as Key Person Insurance mistakes are easy to make.
2. Do we properly manage our cash flow?
If an SME doesn’t know how to manage its cash flow, then it will soon be out of business. Cash flow management practises such as inferior accounting methods, inaccurate forecasting, bad debts and weak credit controls will lead to a shortage of cash to operate. This situation will likely lead to a negative credit score, which will significantly affect a firm’s borrowing ability.
Therefore, asking yourself if you’re properly managing your cash will help you identify financial loopholes. Such a move will guarantee that you can account for every pound you earn daily.
3. Is our marketing strategy effective?
Even if a firm has the best products in the market, the end-goal is to attract customers. To reach your customers, an SME must use an accessible medium for the target market. For example, your target may be millennial shoppers. It would be best to use online sources such as social media to reach them rather than print media. An SME needs to assess whether its digital presence is making an impact on its revenue. This will help a business owner decide which marketing strategy will benefit its brand and generate more sales.
4. Is our growth plan practical?
When an SME has no clear growth strategy, then it’s heading nowhere. The plans in place may be unrealistic and don’t take into account market trends. Many businesses which are now among the Fortune 500 companies grew from small ventures. Even retail giant Amazon took seven years to make a profit, according to Groupon.
SMEs succeed when they have a clear and practical long-term growth plan. Therefore, a business owner should analyse their growth strategy. This action should provide a clear future roadmap of how it plans to expand its market share.
So, as a business owner, ask yourself these questions and be sure your answers will show the direction your SME is heading.