Small and Medium Enterprises (SMEs) make up a large portion of every country’s economy. Although the competition amongst SMEs is intense, most SME owners remain positive and optimistic that they’re looking at a bright future ahead for their businesses. It’s a thriving sector of the economy and that is why financial services providers like Beyond Merchant Capital (BMC) are in the business of funding SMEs.
According to a white paper released by Australian bank, NAB, sixty-six percent of Millennial SMEs plan to expand their businesses in the next three years. Compared to business owners from the Gen X and Baby Boomer eras, the millennial generation is more adept in using technology to their advantage. They’re also more adaptive, experimental, and possess a growth mindset.
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Here are 5 important pointers worth digesting for SME owners who want to thrive in their selected market.
1. Know the Market of the Business
Knowing the business’ strengths and how to use them to favor customers helps in solidifying its foothold in the industry. Customer satisfaction should always be the top priority, especially for SME owners who have a smaller audience compared to industry giants. Studying what type of customers often avail a business’ services will help determine which direction the company should steer.
For example, if a business is in the food sector and their menu consists of quick meals, the working class may be its ideal market. Take a look at how Subway and Quiznos operate their businesses. Their meals take only a few minutes to prepare which is ideal for those who are always on the go.
It may take some time for a business to determine and capitalize on its niche market to strengthen its customer base. From there, once a solid customer foundation has been established, it becomes more efficient and cheaper for the business to encourage customers to try new products.
2. Study Your Competitors
There will always be competition whatever industry any business owner dives into. SME entrepreneurs should look at this as a positive reinforcement to further improve their products and services. Aside from knowing their own business, it’s important for them to also have knowledge of how others do business and what are the things that make them successful.
Smart businesspersons learn from other people’s mistakes, adapt their marketing strategies, and replicate successful management methodologies they employ. However, they should be careful not to exactly copy all the things that other businesses do so as not to lose their own originality. Only the positive values suitable to the business and those that can bolster its growth should be embraced.
Competing head-on against bigger and more established businesses right off the bat is bad for SMEs. Not unless they have solid ground to stand on and they’re introducing a game-changing product or service, they’ll get swiftly swathed away when they compete with giants. Although some owners would take this high-risk, high-reward play and pray for it to work in their favor, it’s better to establish the business’ base first and slowly work its way up the food chain.
More read: advantage of business tools
3. Invest in People
SME owners who have just started their business may not need staff yet, but eventually, as the business grows, they’ll seek help from others. Getting good people into the boat is vital because these people will be the business’ core team. They should share the same passion with the business owner and they should possess the skills needed to make the business successful. These people should be loyal and trustworthy too – traits that are sometimes hard to come by in these times.
This BMC blog page provides more tips on how to further strengthen a team and make them an invaluable asset to the business.
4. Embrace Technology
In this digital world, it’s considered a taboo not to use the advantages brought about by technological innovations. They can help save money by making work easier, faster, and more efficient. There are a lot of tools one can use to help their business stay competitive and relevant. Some of them are free while some require only a small cost to operate.
Social media platforms also continue to become instrumental in marketing strategies. Their popularity and ease of use have given SMEs a huge advantage in terms of advertising. They’ve made it possible for small business owners who don’t have the money to promote their business through traditional methods reach a larger audience through social media marketing. These platforms allow business owners to better engage with their customers, improve their brand recognition, and gain consumer insights regarding their products and services.
Take a look at how Amazon.com surpassed brick-and-mortar companies like Walmart in terms of market value. According to an article from Business Insider, Amazon.com’s value surged by a whopping 1,934% over the last 10 years, beating Walmart’s 2016 value by more than a hundred billion dollars. Amazon.com’s innovative business model and their capacity to take advantage of the internet led them to where they are now.
5. Diversify and Innovate Your Products
Anyone can come up with new ideas. More often than not, businesses owners will find competitors who use similar concepts they’re operating in. This makes the competition more challenging as it forces businesses to innovate and come up with more interesting concepts to win the market.
Flagship products that become the pillar of a business are always good to have. However, as time goes by, people will look for more and something new they haven’t tried before.
Offering additional services and new products help keep existing customers become more loyal to the brand and capture the attention of new customers at the same time. More products entice more customers, increasing the company’s sources of income. Having more products/services to offer also means the business can capitalize on seasonal fluctuations and become more adaptive to the ever-changing environment.
Targeting a niche market is the better option over wading aimlessly in the ocean. It’s okay if a business is swimming in a small pond as long as they’re the biggest fish in the pond. Later on, as the business grows bigger, it will take more space in the market and there’s no other way but to move to a bigger pond. This is the best path SMEs can take to keep on growing in this highly-competitive market.