The opportunity for SMEs during the pandemic
Updated: Jul 13, 2020
There is no doubt that the pandemic and subsequent economic consequences have had a significant impact on the business world.
Small to medium enterprises (SMEs) are no different.
SMEs often try and stretch their skills across all aspects of their business, and in doing so, can be challenged by the expanding complexity of the operating environment. SMEs without a well developed business plan find that their business performance is put at risk, especially during changes in their operating environment.
In fact, it is reported that 4 in 5 SMEs do not have a business plan, with many only writing one when they need a loan.
Of the 20% that have a business plan, only 1 in 3 regularly refine their growth strategy, with the major roadblock cited as not knowing how to create a meaningful and workable strategy.
In addition, research indicates that SME business owners are reluctant to hire a professional business consultant. This may be due to a couple of reasons such as a focus on cash flow, not understanding the value that professionals can bring to their business, or there is a belief of “working harder means more profit”. In fact, it has been reported that most SMEs that fall into corporate administration do so due to managerial issues.
When you couple this with weak economic conditions, inadequate cash flow and local capital, it becomes obvious why SMEs become vulnerable when the economy softens, and financial conditions tighten.
This is a real travesty.
Because SMEs are the backbone of the economies world-wide It will be SMEs that will lead us out of the economic recession. This is why it is so important to support our SME business owners.
Now is the perfect time for SME leaders to work on the business, instead of in the business. Working on the business will allow you to:
Deal with the issues that you’ve been avoiding (yes you know the ones);
Develop (or review) your business strategy to take into consideration the new normal;
Develop and execute a smart marketing strategy to build profile, gain customer insight and test new offerings in the market.
This will help you to position well and make sound choices for your business:
Whether you are currently thriving – how will your business perform post-covid19 when demand decreases?
Currently in hibernation – how will you manage your business awakening?
Or Surviving - what risk management strategies have you in place for different scenarios?
We all have a moment right now. We all have a choice to make in how we engage in this moment. How are you using this time?
Marion is a highly experienced and accomplished strategy, innovation and leadership professional with a focus on the enterprise and government sectors. She is a trusted advisor to CEOs and senior executives, providing practical and pragmatic solutions to the challenges they face. Marion is the Managing Director at Azolla Holdings Pty Ltd, a Board member, thought leader and member of an international entrepreneur association.