5 Ways SMEs should Develop Growth Strategies
How SMEs should develop growth strategies
Growth strategies for SMEs
Every nation has its own definition of what is considered as small and medium scale enterprise (SMEs). What is your definition of SMEs? Well, to go simple, we can say SMEs are smaller businesses. The fact is that every business regardless of its size or nature needs to grow. However, this growth does not really come that easy. SMEs need to have some sort of strategy in place to achieve some level of growth. In this piece all efforts are tailored to provide some guidelines on how SMEs should develop growth strategies.
How can SMEs develop growth strategies?
Regardless of the industry or sector, all SMEs just like any other business organization have long-term ambitions of growth, success and soaring profits. SMEs may be smaller in size as compared to their FTSE 100 counterparts in the London Stock Exchange (LSE) for instance. However, it does not mean that the same growth strategies don’t apply to each. However, there are some notable differences in strategies.
The majority of firms in most economies are SMEs, so it is important that in order to have a strong economy, SMEs look at how they can become bigger businesses. There are some big growth strategies that every SME can adopt. The following are some lubricating and galvanizing ways that SMEs can develop growth strategies for their businesses.
Invest in training
Big companies spend millions providing their staff with the right training and learning opportunities. Some of these companies have made it part of their plan that every three months they provide their staff with training. The reality of this training is that it plays an integral role in everything from up skills, enhancing staff performance, staff retention and employee satisfaction. If you are being restricted by a smaller budget, then you need to take time to analyze and figure out key areas of your business that you could improve and invest in training accordingly. Taking this step or strategy will always help you seal key loop holes or lapses in your business when it comes to performances.
Adopt fast growth sector strategy
Another way that SMEs can develop growth strategy is to explore other sectors in their economy. What I mean here is that research needs to be done on fast growing and emerging sectors in which they can channel some of their resources into. During a recession, most markets shrink or slow down, so it is very important to pick your sector carefully. Business is dynamic, hence having investments in other sectors or industry can be very crucial to an SME’s growth. This can be done through extensive research on rapidly growing markets. This includes analyzing the venture capital providers in the industry and also other financiers such as banks or other credit providers that are willing to provide their support through investing in SMEs and also providing them with other non-financial support.
Hiring energetic staff
The success of every business depends on the kind of people you employ or hire. Before you hire potential staff the best key trait you must look for is the energy level. Ensure that the people you hire have the energy and potential to energize others as well. Having a healthy staff means your business can go on without any breaks that might be caused by employee absenteeism.
Investing in employee health care
SMEs should develop growth strategies in areas that relate to employee health. Employees are the back bone or in another words I would say the “spinal cord” of every business. This means that they should be handled with intense care. By investing in the health of your employees you would have a healthy workforce at your disposal.
Investing in security
It would be grave mistake and a huge disappointment to see all your efforts go down the drain. Poor security can be very damaging to businesses and SMEs are not excluded here. SMEs need to develop strategies which would ensure that their investments are secured. Security strategies include; identifying and closing loopholes aimed at mitigating theft and costly errors that may impose severe financial burdens to the business. Insuring business assets is another security strategy that SMEs need to invest in.
Limitations to SMEs growth
We have looked at some of the ways that SMEs can develop growth strategies. Now let us take a look at some of the constraints that SMEs face which hampers their growth.
One of the leading factors that hamper the growth of SMEs includes market size. Marketing is an important aspect of every business and it is geared towards increasing a business’s share in the market. However, sometimes SMEs are not able to convert their marketing resources into positive increased sales or revenue. Sometimes this is due to market constraints. The market some SMEs find themselves in is too small such that no matter how much they invest in marketing, the corresponding sales or revenue does not significantly increase.
Ask any SME manager his biggest needs; and he would tell you it is money. Many SMEs are plagued with financial limitations and this is due to either their size which undermines their credit worthiness when they approach some credit providers.
As a small and medium-size enterprise (SMEs), adopting growth strategies like the ones above will help your business grow successfully.