Growth is about becoming the 'M' of the SME; taking a grown-up approach and thinking big. Growth isn’t always easy, even for fast growing SMEs. Getting the balance right between fast growth and long-term sustainability is a real challenge, as is recognising the right time to grow. John Antunes of SAP UKI, explains why now is a great time to explore business growth.
So, is it the right time to grow your business? In short, yes. There is no doubt that in these post-recession / post–credit crunch years, SMEs have felt the brunt of economic instability and business challenges. The Government’s rhetoric regarding its support of UK small businesses has always been strong, with David Cameron stating that SMEs lie at the heart of the UK recovery. But in the recent budget announcement, the Chancellor unveiled a number of initiatives designed to hopefully give genuine support to the country’s SMEs, making it an ideal time for SMEs to evaluate their growth strategy.
It’s worth considering, while these initiatives provide much needed - short term - support and encouragement, SMEs need to be strategic in their approach to ensure long term success. It is not only about the support received from the government but also about leveraging opportunities at the right time according to their long term objectives.
In order to succeed in a relatively flat economy, small businesses need to ‘think big and grow fast’. Flexibility lies at the heart of the most successful SMEs and enables them to achieve quick, sustained growth. Research conducted last year, analysed the Times Fast Track 100 and found that one in five of the UK’s fastest growing companies in 2000/2001 are no longer in business today. Those that are still in business demonstrated specific attributes that have led to their long term success and growth – flexibility being a key trait.
But, the ways that SMEs invest to achieve this flexibility and growth is crucial. They need to spend resource wisely in key areas which will have maximum impact on their business. For example, facilitate more innovative ways of working, establish processes to manage money effectively, invest in the most appropriate technology, and, adopt a leadership and management style which address the current working challenges. More specifically, what do SMEs need to consider within these key areas to help achieve sustainable growth?
Long term sustainable growth is driven through making strategic and timely investment decisions. When and how should investment decisions be made? What areas of the business would benefit from investment in the long term? Recognising the right time to make investments can be challenging, however, SMEs hold an advantage over larger organisations in that – despite relatively limited cash flow - they are able to adapt their finance strategy more readily, making faster decisions when the time is right.
SMEs are encouraged to create intellectual property and be more innovative – as a facilitator for sustainable growth SMEs need to keep innovation high on their radar. It’s simple; those organisations that do, are doing well. There is never a bad time to innovate, providing the resources are in place. It’s an area that should form part of an underlying, long term tactic allowing SMEs to move one step ahead of the competition.
Fast growth requires fast management and the willingness to embrace new approaches, without getting too carried away. Smaller businesses especially should ensure recruitment decisions are tactical for the business and fill areas where expertise may be lacking. To grow, good quality people are crucial. In a very competitive market it is easy for SMEs to get lost and fall behind larger competitors – retaining employees through good management and packages are important.
Small businesses are in a great place; with agile, bespoke technologies at their fingertips, they can maintain a high level of efficiency through quick integration, without the need to develop a comprehensive integration plan. The right technology can go a long way to improving productivity. For example, technology such as business analytics and mobile applications support SMEs in maximising opportunities and making quick decisions, therefore, allowing timely investment decisions to be made.
By embracing these focus areas, SMEs can develop attainable growth strategies. SMEs are key to the UK economy, bringing innovation and jobs to the country whilst delivering some of the country’s best customer service. Clearly, in today’s world, growth takes more than just ambition, but by capitalising on the government initiatives, SMEs have the opportunity to succeed and, ultimately, grow.
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