Today’s business climate is tough, competitive and fickle. Post GFC, SMEs have had to work harder than even before to stay ahead of the pack and survive the turbulence.
Prompting businesses to take a closer look at overall business performance, the GFC (and an increasingly globalised economy) has forced many SME owners and managers to review and rework their financing, financial management and marketing. No longer driven by local supply and demand, today’s economy takes no prisoners and has no leniency for the fickle.
In the past, standout businesses were distinguished by acts of ongoing self improvement and evolution. These great businesses reviewed, identified and remedied ‘gaps’ in their business on a daily basis. Assessing and measuring values, benefits and offerings, these great businesses followed a formula that formed part of their day-to-day business mantra. Today, this feature is no longer an attribute reserved for the great; it’s a feature that has become a ‘do or die’ element of every business.
Unlike their big business counterparts, SMEs cannot afford (and don’t want to afford), full-time staff and the headaches that can come with them. Notwithstanding this, recent changes to the economy and global marketplace have meant that now more than ever, specialist areas such as finance and marketing have become critical to longevity, sustainability and ongoing business success.
So how can SMEs survive without tripling their costs? The answer lies in projection planning and strategic development. Enter the new and improved business plan.
When done right, a business plan can be the best thing you ever did for your business. Providing a template for the future, a business plan should capture your short and long-term goals, where you want to get to by when, and most importantly, how you will get there. A business plan is an essential element for any business, but particularly SME businesses. With fewer staff, less checks and balances and more often than not, a passionate owner and/or investor working in the business, it is easy to lose sight of what the business originally set out to do and for your vision to become clouded by the activities of your competitors, changes in the marketplace and fluctuations in supply and demand.
Where are you going and why?
Typically flexible, adaptable and responsive, SMEs are rarely held back by red tape. While appealing on the whole, this feature can sometimes be an SME’s worst enemy. The capability to change direction quickly and make snap decisions can be of great value but sometimes, without an overarching rationale or strategy in place, these decisions can sound the death knoll. Understanding the purpose of your business and knowing where you are going and why will help protect the business against deviation, overreaction and occasionally, unnecessary panic.
As a business outgrows its SME status, it will typically take on experts to work on the business. Notwithstanding this, many business owners and managers enjoy the fluidity and flexibility only a true SME can offer, and do not want to outgrow their SME status. This leaves SME owners and managers walking the tightrope that is in the business versus on the business, with the in the business typically taking precedence over the on (usually at a high cost to the business itself). In consideration of this, it is imperative that businesses develop a truly individual, meaningful business plan that reduces wasted time (and money), keeps the business (and its leaders) focused and provides a balance between the in and on components.