This post was previously published on 17 January 2014. For more up to date information on the PIC scheme, please refer to our most recent blog post on Singapore Budget updates, with the latest available information from IRAS. For the full details, visit the IRAS PIC site.
The team at Blue Ocean Systems works closely with SMEs across various industries from retail to production and manufacturing, so we regularly see the pains they go through to achieve their business goals. In this week’s post, we’ve compiled:
If you’re an SME, you’ll know that 3 major areas can affect the success, growth and profitability of your business:
- Manpower – the rising cost and increasing shortage of skilled workers
- Competition – domestic and international
- Cash flow – how to ensure it is optimised to take advantage of investment opportunities
So, how can you juggle these major areas and sustain growth? Here are 8 top things to consider:
1. Is your organisation productive enough?
Boosting the productivity levels within your organisation will have far reaching effects. Investment in the ongoing technology relevant for your industry should form a prominent part of your annual budgeting to consistently improve your productivity.
With the rising cost of staff, you need to ensure that their skills are optimised too; ensuring they have the best machinery, tools and systems will help to boost this.
Local government grants and incentives are often available for SMEs so it is worth finding out what is available in your industry or area. In Singapore, for example, the PIC (Productivity and Innovation Credit) awards cash amounts and tax benefits to eligible businesses that invest in technology to improve their productivity.
[Read more on the PIC here]
If you’re trying to invest in new technology but the finances are not adding up, it’s always worth speaking to your bank who might have special interest rates for SMEs. You can also discuss with us various low-cost payment plan options that can be arranged through our finance partners to facilitate your investments.
2. Is your business model working?
Whether you’ve been in business for 25 years or 25 months, constantly reviewing the way your organisation works and how it can improve will help to ensure you’re around for the next 25 years.
Involving the whole organisation in feedback and improvement activities will bring things to your attention that you might not have otherwise considered. Ask yourself (and your heads of department) how things could be done differently, new markets to consider or new products/services to produce and sell. Provide a safe and open forum for all employees to offer their ideas and suggestions for how your organisation can be different from, and better than your competition. Empowering your employees in this way will also work towards better staff retention rates by giving them a voice and a place to grow.
[Read here how Blue Ocean Systems implemented Design Thinking!]
Also consider the end user in your business – your customer. How can their experience of your organisation be improved? It could be quicker response times, a more customer-centric selling platform or a greater range of products and services. Engage with your customers through social media and learn more about how you might be able to stand out from the noise of your competitors.
[Read more here about creating exceptional customer experiences.]
3. Do you know when to let go?
As an SME, you’re probably used to doing everything in-house and wouldn’t like to let anything out of your control. But, for organisations to grow and enjoy success, they often need to let go of some areas of their business that are unprofitable or expensive to keep in-house to allow them to focus on what they are really good at to boost their profits. This could mean outsourcing your human resources function (payroll, recruitment etc.) to focus on more sales activity, for example.
Engaging in mutually beneficial partnerships is also an efficient way for SMEs to work more effectively. You might lose customers because your organisation doesn’t provide one particular product or service, but working in partnership with another SME who does offer it, could open up a win-win situation for you both.
4. Be a growing, not a static SME
Your growth strategy should be your overall business strategy, or at the very least a big part of it. Unless you’re happy staying small, with mediocre profits, your organisation will be depending on how you plan to grow it. Whether you’re looking to grow locally or internationally (or both), or your growth plan is based on increasing your product base, your entire business plan needs to focus on this, with everyone on board who needs to be. Don’t leave it to chance that your sales manager will understand how to grow an international market – ensure you have the right people behind your growth plan. Additionally, having the right systems and processes in place should come before any plans for expansion are developed.
5. Do you really understand your business?
Leaders of growing SMEs have their head around their business systems and processes and fully understand how everything works. Having the right data available, at the right time, is key to making quick and accurate decisions and being confident enough to take calculated risks.
Failure within SMEs is often not about what they did, but more about what they didn’t do, i.e. make an investment when it was offered, take a chance on a new product when it was cheap – usually because they didn’t know what state their cash flow was in, or they didn’t have enough information to make an informed decision. Don’t leave your business to chance – ensure you have enough data and statistics at your disposal to take advantage of any situation that comes along.
[Read more here about risk taking in your business.]
6. Are your employees empowered?
Having the right team of people, using the best systems, following optimised processes and committed to the organisation’s future success is a sure recipe for success in any business. But ensuring your employees are engaged and empowered is not always easy and it often takes a culture shift from the top down.
Technology, systems and tools are one part of the employee retention equation but, often more importantly, is what’s in it for your employees – other than their pay packet of course. Is your organisation attracting the right people in the first place? Is your company an appealing proposition for the candidates you need to take the business forward? Once in your organisation, are your employees encouraged to contribute to the strategy and provide their fresh input to existing ways of doing things? Are they offered long-term opportunities to grow within your company, to continue to learn and develop their skills?
Empowered employees will not only stay around longer, they are able to act faster, reduce sales cycle times, increase customer satisfaction and open up new opportunities. A sure way to set you aside from your competitor!
[Read more here about the power of your employees.]
7. Are you setting the right expectations?
Across your entire business platform, are you setting, and measuring, the right expectations? Setting SMART (Specific, Measurable, Achievable, Relevant, Timely) goals for each employee and business unit is a simple but effective method to ensure everyone knows what success looks like, and what their role is within that.
Having everyone follow a proper evaluation metric will also help to increase productivity, maximise your manpower and contribute to employee engagement.
8. Listen to your customers; they know best
Social media is inescapable – and that is a good thing for companies wanting to listen to and engage with their customers on new levels. How do you monitor your social media streams? Are you using the information, opinions and input from customers to adapt your offerings to their needs? What is the perception of your organisation in your customer’s eyes? An organisation that ignores online comments and feedback from unhappy customers is one that runs the risk of losing those customers.
What differentiates you from your customers might not be the products or services you offer, but the way in which you interact with them through various media channels.
At Blue Ocean Systems we believe in understanding and working together with our clients to improve their business in constantly evolving ways. In future posts, we will be exploring these areas in more detail.
Note: This story has also been adapted for publication in Steemit.