MANAGING SUCCESSFUL SMALL AND MEDIUM ENTERPRISES (SMEs)
Like David Richards says, it is not an easy time to be a “small or medium sized enterprise (SME)” owner since the cost of living is high, people are spending cautiously and investors are becoming increasingly conservative. Being an entrepreneur requires worrying about cash flow management among other things to compete effectively.
SME is a business segment term used differently in different countries, sometimes differently in different industries in the same country. In the US, any firm from a small-office home - office (SOHO) to a large corporation may be called a SME.
The European definition of SME follows: "The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro."
In 2008, the Uganda Investment Authority (UIA) introduced the first Small and Medium Enterprises Business Guide. This guide provides information and contacts on business licensing, access to finance, entrepreneurship skills training, business development services, and taxation/incentives.
Challenges of running SMEs
Sometimes in most employees life one gets frustrated at the hustle and bustle and mind-numbing regularity of paid employment. You just want to take initiatives and responsibilities that would bring about a successful enterprise – “your enterprise”. The dream is to be your own boss. But then, it’s one thing to dream, and another to see such dreams materialize to reality.
One of the biggest challenges is the fear of failing. It’s important to appreciate the regularity of salaries/wages and consider scenarios if “your enterprise” doesn’t make it quick or in the intended direction.
Truth be told, being a business owner comes with challenges unique to the size and function of the business. The small business owner, for example, has to handle all the challenges of selling, delivering, financing, managing and growing the business with little or no staff, while trying to make it a success at the same time. This can often prove to be intimidating but not altogether unachievable. No one ever said it would be easy running a successful small business. But then, when you get it right, the rewards can be hugely amazing and remarkable. It should interest you to know that most big, successful and legendary businesses today started off as small businesses.
It is important to retain the interest of all stakeholders like customers, partners, vendors, your best staff and team to build momentum in a short span of time. This takes vision. It also takes courage and belief – belief in your ability to steer your ship to success.
Here are some of the secrets to run a small business that can make these challenges easier to handle and make a successful business venture.
Secrets for SME Success
Secret1: Have a clear vision of what you intend to do and the business you wish to run.
Vision is a key hallmark of success principles in business and other aspect of life. Vision gives you a vivid picture of what you want to accomplish. It makes you see the end from the beginning. This picture will illuminate and motivate your mind throughout the course of your business journey. By having a clear vision for your business, the mission takes shape and business objectives and goals emerge.
Secret2: Define clearly what you sell and also to whom you sell or render service
Defining what your business does from the word GO, as you set out into the business world, is always one of (if not) the most important step to running a successful business. This makes it a whole lot easier to manage your company going forward. In addition, this enables you to explain your business clearly, without ambiguity, to investors or partners when the need arises.
Secret3: Source for funds security and sustainability
Running a small business requires financial backbone, prudence and efficiency. Explore all available financial options open to you, such as family, friends, business associates, investors, banks, etc. However, the choice of the right financial option for your business' financial plan and support is vital. Also, bank with the right financial institution that will give you the best deals, helps you stretch every shilling and provide for financial prudence in management of the business.
Secret 4: Get business information and technical guidance/advice from Small Business Development Consultant(s)
Today, a number of businesses and professionals give expert business advice and services at a token fee for individuals and groups wanting to go into new businesses or diversify their existing businesses into new areas or line of products and/or services. These professionals provide help and sound business support and solutions services during all stages of the business life cycle.
These include legal advice and consultation, business development and strategies, recruitment and management of staff from business psychologists, and so on. Their business support and development services help business to mature by making the right business calls that won’t only serve in the immediate and short term, but would strategically assist in positioning the business for long term success.
Secret 5: Create a workable business and marketing plan for your SME
One of the keys to running a small business enterprise is having a detailed and workable business plan that outlines the objectives, goals, target market and projected growth. In addition to having a concrete business plan, ensure that you work out a detailed business marketing plan to go with it. Without this, it’s necessary to rethink why you are in business in the first place.
Secret 6: Go ahead and start a business
Once you have established the vision and mission of the company, defined clearly what type of products and services your business wants to offer, contacted your financial sources for funding and secured your business funds, consulted business professionals for necessary legal and business strategy building aspects such as registration, documentation, business structure processes building, then finally built a creative and detailed business and business marketing plan, to drive and carry the business, it is now the time to start! Don’t waste another moment idling and wishing. Just start!
Secret 7: Build a strong brand identity that will stand the test of time
Actually, branding the business should start the very moment you articulate and conceptualize the business idea. This involves creatively building a business identity that would appeal to the target market in a continuous manner. It includes but is not limited to the choice of business name, type of business engaged in; and the personality you want the business to have. Be very creative and innovative with graphic designs, business colours, taglines, business logos and other communications. Everything must be organized and attractive to the targeted customer to bring about more sales and continued business patronage.
Secret 8: Prioritize on making profit
It’s amazing how many times people start up business enterprises and then forget how to make profit. It is a known rule in economics that the chief aim in business is to make profit. When that is no longer the case, it becomes difficult to sustain or grow business. Therefore, the moment a business is set out to be successful, it’s important to understand the golden rule of money - “make sure more comes in than goes out”. Once this is achieved, there will be enough to re-invest in the business and to make you feel it is all worth it going into business.
In addition, prioritizing profit making also involves optimising cost management to minimise waste, maximise productivity and profitability. Where you can’t seem to get it right yourself, hire or consult an accounting professional to help you keep your books in order, manage your finances properly and professionally to ensure your business remains profitable!
Secret 9: Network and connect with other businesses and business minded individuals as much as possible
To grow business for a wider reach and approachability, ensure you network with other local small businesses and small business owners on overall business vision, shared business strategies and opportunities. Attend regular business events; they present great opportunities and avenues for small businesses to come together, rub minds, share business ideas and experiences. Also, join small business associations and participate in local events to raise awareness, promote your business and its brand.
Secret 10: Never leave a single customer dissatisfied
It may be very difficult to keep every one of your customers happy. That is a business fact. But you must try to keep every one of your customers satisfied. That should be your business reality. Having a pro-customer orientation – whether you run a small business alone or have employees working for you – is as vital a decision as the decision to go into running a business in the first place. There can be no business without customers. The more customers patronize your business, the more the chances of making a profit, and actually building something successful and wonderful. Therefore, businesses must emphasise customer satisfaction through effective customer service and relation. Make use of positive and negative feedback from customers to improve the quality and desirability of your products and/or services.
Secret 11: Be Passionate about your business and commit to continuous improvement
Never settle for less. Always go for more. Renounce average. Beware of comfort. Avoid complacency. Live by belief. Every day you should desire your business to be in a better position than it was yesterday. This mindset should permeate through you to your staff. Even when hiring, ensure focus on those who can do more, bring more, create more, live more, give more, sacrifice more, believe more, support more, relate more and accomplish more. Emphasis should be on more, more and more - constant improvement, no room for stagnation and redundancy. Remember, most of the iconic businesses you see today like Coca Cola, Apple, etc. didn’t start big. In fact, most of the Fortune 500 companies started small. But they made it to the top because they keep going and keep improving and wanting to be better. They still do today, and some of them are over a century old. You too can do it, if you try and believe you can!
Secret 12: Feel the winds of change in the air
To be a successful business, you need to be able to change and adapt your products and services as situations dictate. What was successful last year may not work for you this year.
Be ready to try new ideas, expand your business and bring in new people. In order to fuel such radical changes, you may well need to consider exploring new avenues of funding in order to enable your growth. A measured risk often pays off in business growth.
Secret 13: Taste the exotic fruit of unexplored markets
If you are looking to grow and expand your business, you may not find enough clients with money to spare in the existing markets.
This could be the year in which you reach out to new markets, bringing in eager new clients and taking your goods and services into territories you’d never considered before. Consider expanding geographically as well as into new niche areas of business.
Remember, running a successful small business may be tasking and at times just plain frustrating, but the eventual rewards of running a business successfully are too numerous to mention. The benefits you reap ultimately will be boundless. And the financial rewards? Well, you may just turn out to be the next Aliko Dangote or Bill Gates!