It’s safe to say that smaller businesses have had a challenging time of late. First they faced the 2008 economic crisis, and more recently they’ve had the uncertainty of Brexit and a Donald Trump election victory. It’s not all doom and gloom, however. According to research from the European Commission, SME revival is on the rise. In 2014, smaller businesses accounted for 71.4% of European employment growth in non-financial companies, highlighting the significant impact that SMEs can have on a country’s economy.
Expanding into new geographical markets allows SMEs to compete with larger companies and kickstart their growth. And while technological innovations are helping SMEs to easily navigate local laws, taxes and procedures, their agility enables them to appear bigger than they are and bypass the stigma of being ‘too small to deliver’. It also means SMEs can punch above their weight and respond quickly to new opportunities.
By creating a slick system, SMEs can successfully compete on a global scale, no matter which country, or countries, they’re in.
E-commerce is your new best friend
Only 20 years ago, when the world wide web was still in its infancy, SMEs generally took the shape of physical trading outlets, largely anchored to their country of origin. However, the internet has now become the go-to platform for commerce, transforming the business landscape in the process. Thanks to e-commerce, every SME has the potential to become a global business, and with many modern businesses only having a virtual shopfront, user expectations are the same as when visiting the physical premises of a large retailer.
The benefits of e-commerce don’t stop there, however. A small business or one-man band can now sell products online, right next door to its competitors that may be light years ahead. And they can do this with equal opportunity and potential for visibility. Better still, the customer is none the wiser. E-commerce has democratized the global marketplace, and SMEs are perfectly placed to take full advantage of this.
Make the most of tech
Our latest SME barometer research revealed that well over a third of British SMEs believe that if they don’t adapt their business models, they will go out of business within five years. But conversely, only a mere 2% have done anything about it.
In this day and age, technology is a must-have for any business looking to grow. A streamlined online business system can save you a lot of time, headaches and money when it comes to administration. Moreover, solutions that leverage the cloud offer you the ability to work at any time, in any place and from anywhere. Ultimately, it’s this continually connected way of working that can help a business stand out from the crowd.
Cloud-based service providers can also take on the burden of a whole host of fragmented and costly operational needs such as local accounting process compliance. This means an SME with limited resources can free up its staff and finance to focus on actual trading. This can make a huge difference to both the bottom line and the viability of expanding into a new market for a small trader.
Be ready to scale
Naturally more agile than their larger counterparts, SMEs can pursue and respond to opportunities faster, offer new products and services quicker and bring ideas to reality at speed. This means that SMEs often experience quick and unexpected growth – and their systems struggle to keep up.
If you are really looking to future-proof your business, you need to make sure that what you’re building today is strong enough to handle a potential influx tomorrow. There is nothing worse than when you’ve been waiting for tickets for your favourite band to go on sale, only to find the website constantly crashing when they’re finally available to purchase.
Larger businesses, with layers of internal processes, reviews and legacy systems, often struggle to develop, implement and deploy new products quickly. Staying lean and implementing flexible infrastructures, services and administrative processes early on will allow you to remain agile throughout your growth journey. And when the time comes, you will be ready to scale.
Everyone loves an underdog, and SMEs really have a great chance to get ahead of larger competitors, make a name for themselves and reassert themselves as the bedrock of their resident country’s economy. They must fight the temptation to make their operating models more complex and put the right systems in place so they can easily take on bigger rivals on a level playing field.
About the author
Gavin Fell is general manager of Exact Cloud Solutions, which provides accounting and other cloud software to small and medium-sized businesses in the UK. Prior to joining Exact, Fell held management roles at Sage and SAP.