Understanding SMEs
SMEs
(Small and Medium-Size Enterprises) get a tougher deal from banks, governments
and other agencies. Ask any SME owner
what his main problems are and he or she will tell you bureaucracy and
obtaining finance. As someone who has
worked in large organisations and SMEs, this is what I have noticed
differentiates them.
Management:
In SMEs, there may be only one manager (the
owner) who does everything. His/her time
is spent selling, heading up Customer Satisfaction, managing day-to-day
operations, bookkeeping, acting as HR Manager, Legal Adviser and Head of IT. Large organisations and governments have separate
departments (or divisions) who specialise in a particular field. The SME owner/manager is a “jack-of-all-trades”
and has little time to spend on any one area.
Finance:
SME owner/managers are their own
bookkeeper, financial analyst and finance director. Don’t expect them to have the in-depth
expertise of a qualified accountant. The
good ones know almost to the last penny or cent what their total sales, costs
and profits to date are, and whether a new deal will make them money.
Awareness:
SME owners don’t have the time to keep up
with the latest legal and regulatory developments unless they specifically impact
their business. Don’t expect them to be
aware in the same way as the head of a large organisation. The latter pays others (e.g. lawyers,
accountants, specialists) to stay up to date and brief them as required.
Time:
Related to Management and Awareness
above, SME owners, as I mentioned before, are jacks-of-all-trades. Their focus is on getting business and
selling. Large organisations with
specialist Sales, Customer Satisfaction, IT, Legal/Compliance departments can
farm out tasks to the relevant specialist.
The SME owner is that
specialist and what is important to you right now may not be to them.
Decision-Making:
Is the territory of the SME owner. None of the employees (if there are any) is
likely to have any authority (or only has very little). Expect to wait.
How could banks, governments and other large official/government organisations help?
1.
Recognise the above. SMEs pay taxes and provide valuable
employment and business to the economy of any country.
2.
Have support mechanisms. Big organisations don’t recognise the
pressures and priorities of small ones - the fact is, they’re different.
3.
For banks, recognise that SMEs are different to multinationals and that
they may need specialist support. The
so-called “Small Business Units” of many banks are that in name only. I know one SME owner who hadn’t had a visit
from his “relationship manager” for 2 years!
I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in the world financial services industry running different service, operations and lending businesses, I started my own Performance Management Consultancy to offer solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
Labels: Regulation, Risk, Strategy, Teamwork
posted by William Martin @ 08:10
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