Creating a success story for business, Year on Year growth, every year is not easy to accomplish. Yet large companies do it, growing at 8-10% every year on a large base. Why then do SMEs stagnate after a period? Whereas, the big organizations not only prevent themselves from being plateaued out but also are able to maintain 10-15% growth every year. What sets them apart? Scaling up business, growing customer base while maintaining the current growth rate – these need to be a key focus area for SMEs.
Large corporates have a set of processes that are growth-oriented and time-bound. The clarity in processes and clockwork-like repeatability of these processes set them apart from SMEs. However, most of them are simple and easy to adapt for SMEs.
How can SMEs create and implement such processes? Do you have YOY growth – mapping to your potential – on your mind? Read on to know what you might be doing wrong!
LACK OF PRIORITIZATION
As an entrepreneur, it is difficult to have the time, sit down and chalk out a plan of work– but it is directly proportional to the success of a business. By getting in the right frame of mind and nailing down not only what you aspire to achieve, but also how it can be accomplished, business goals becomes much easier to attain.
While large corporations are used to the rigmarole of annual and quarterly planning, these exercises shouldn’t be restricted to the big players. Goal setting, prioritizing and following a plan can help small businesses to set a course for success. A detailed plan and close monitoring against the plan can help you and your team to stay on track. It helps you to approach your business as per a well thought out plan and not as per ad hoc decisions taken as knee jerk reactions to some development.
NOT BACKING PRIORITIES WITH BEST TALENT AND MONEY
Building a strong team at the top should be the utmost priority of SMEs. It should always be acknowledged that a top team can take you places. Attracting quality talent, retaining them, and giving them suitable compensation progression should be on an entrepreneur’s mind. It can take the business places. Unreasonable level of trust in the entrepreneur’s own capability to handle senior and multidimensional functions often leads to chaos and complex situations. If the SME is too small to have a full-time senior employee, several hiring models (on-demand) have come up recently which allow the SME to hire top talent without spending a large amount on the compensation. On-demand hiring model transforms businesses by optimising both – time and money.
OPTIMIZE TALENT VS COST CONUNDRUM
Undeniably, having the best talent is one of the keys to achieving success and costs are generally not an issue for large corporates as they do a cost-benefit analysis for everything. Yet, the large corporates outsource their projects. Why?
The large corporates outsource mainly to bring in specialised skills and manage the costs of projects which may or may not be long term in nature. Often, they don’t hire resources for the projects or skills that will be required in the short run.
It is important to understand where to spend money and where the costs can be saved. Getting in-house talent for functions like production and operations of the company can prove helpful whereas marketing, finance, accounts, etc. can be outsourced to get access to specialised skills and hire as per the requirement. CFO on-demand, CMO on-demand and Marketing on Tap have proved to be a successful model for SMEs.
Doubtlessly, these functions are very important to the success of the business but a specialised team is required to take care of these functions. Hire a team that has successfully delivered results that you seek previously and hence need not do a hit-and-trial for achieving the desired results. This makes the entire process more efficient as compared to the hassles of hiring and managing a team where the leader doesn’t have experience in best practices and available tools.
COST OF ACQUIRING NEW CUSTOMERS VS. SHARE OF WALLET
Pursuing new customers single-mindedly or focusing upon retaining the existing customers and increasing share of wallet?
No matter what industry you cater to, the cost of acquiring new customers is 25-40% higher than the cost of maintaining the existing customers and increasing share of wallet with them. Makes sense? You will be under less pressure to keep adding new customers if you can keep increasing your business with the existing clients. For sure, an organisation needs to find new customers, but an equal or morning focus should be on acquiring more business from existing customers.
Companies should maximize the revenue by upselling or cross-selling to existing customers. Good customer care and actively proposing products or services which will help your existing customers improve will get you more business and hence higher revenues. Existing customers will also recommend you to new customers and you already have a foot in the door then. Increasing share of wallet is a much more efficient way of improving your topline as well as the bottom line.
POOR IMPLEMENTATION OF TECHNOLOGY
In the past few years technology has been a game-changer for entrepreneurs. Technology enables even the smallest businesses to compete on a level playing field with much bigger organizations. But, how long has it been since you last explored new technology or upgraded your existing tools?
Poor and lengthy implementation of technology not only slows down your business, but it also costs you money in lost productivity and missed opportunities.
WHAT CAN YOU DO?
So what can you do to ensure your enterprise is on track to realise its true potential?
Work on your business as much as you do in your business. Often SMEs get bogged down in day-to-day running and operations and forget the bigger picture. It’s important to be clear on your long-term vision.
Adopt the best practices from the industry leaders. Focus on timely reviews, prioritization, optimizing talent, and nurturing existing customers. Big players have made it to the top by keeping the ‘customer’ in the centre of all activities and you can do it too.
Have you found the right balance yet? For more marketing insights, mail us at firstname.lastname@example.org