It is often said how important small businesses are to the UK economy but it is also true that corporates have their voices heard more easily. Additionally, it is believed that the corporates have a lot to give in terms of educating the SMEs on how to do things. This is undoubtedly true – however what are SMEs doing which would be worthwhile corporates observing?
Tighter control over costs
Being smaller can afford the benefit of having a simpler organisation structure with less devolved budgets, less opportunities for inefficiencies and less management checking required. Having a smaller structure means lower overheads and ideally should lead to lower, more competitive pricing. Many larger companies grow their infrastructure and have unused space for example which can be exacerbated if the business reduces. This can lead to accommodation larger than required with a fixed term and hence a cost liability which has to be recovered – potentially through increased pricing. This can then create more problems because the pricing becomes less competitive which results in less business and more difficulty in recovering the overheads.
Rapid decision making
Generally there are less people in the decision making chain so decisions tend to be made quicker. This means that opportunities can be taken and not missed because competition has jumped in before your business can react. It must also be said that governance is important within a SME in order to keep efficient management control.
Closer to customer requirements
Many SMEs speak to their customers on a daily basis and get first hand the feeback on products/services. In larger businesses it can be a tendency for the feedback to go though a number of people before getting to management. Quite often the feedback has become filtered and processed which can result in the message getting diluted or sanitised. So there is a danger customer views are watered down, misinterpreted and delayed.
Quite often with small businesses the customers views are more direct and immediate which give the opportunity for the business to take action if necessary more rapidly.
Clearer and more ‘in-tune’ dialogue with customers
SMEs tend to be communicating in the customers’ language which give the impression to the customer that they are more in tune with customer needs. Contrast this with the ‘corporate speak’ used by some large company spokespeople in the media. Phrases like ‘customer centric’, synergy, customer journey etc.. Sometimes this language confuses people internally never mind customers. There is a backlash against business jargon and a demand for authenticity so using simple clear language helps.