Combining entrepreneurial spirit with an infrastructure that is scalable will help SMEs create resilience and maximize opportunities in the face of uncertain economic conditions and increasing costs
Despite the risk of’stagflation that is the result of low economic growth with high levels of inflation increasing energy costs as well as a unresolved Brexit and the Russian incursion into Ukraine creating supply issues worldwide and a widespread shortage of skilled workers however, it’s not good for small businesses at the very least. As per the British Business Bank (BBB) it is positive signs. Equity investment for UK-based SME’s was up 88% in 2021 , to PS18.1bn in comparison to last year. The IoD has been positive, claiming “the future is bright” for SMEs and SMEs, with 60 percent believing that they will see continued growth in revenue this year.
Many thousands of firefighters and personnel in control rooms will decide whether or not to strike
The reality is that Debbie Bowen-Heaton as partner as well as Kirsty Braines, COO and Partner of business transformation specialists Oliver Wight explain that nothing should be considered as a matter of course. The times are becoming more challenging. There are SMEs who have emerged triumphantly from the Covid epidemic, defying the trends of the 80 percent of UK SMEs who claimed they had been adversely affected, should be cautious. The strategies that worked last year will not work this year, given the rate of change and the increasing problems.
The issue is that these rapid-growth SMEs gained from the rapid growth of online ordering as well as an evolution in the way people live and work practices, triggered by the closure of offices and lockdowns. The sales soared above expectations. However, we’ve witnessed businesses stretch themselves too far. What’s in the next few months? The whole talk about”a new normal” was just a bit naive. Normal is the environment that you’re living in right now the one that has relevance to you company and customers. For SMEs this means uncertainty.
As Facebook, OECD and World Bank Global State of Small Business Reportclaims, “despite their agility because due to their smaller size and less availability of resources SMBs have a variety of issues. Even in a stable economy, they might be confronted with unique distribution chain and network and resource limitations.”
This is the problem. Without the capacity and scale in planning and forecasting as larger organizations, SMEs by their very nature, are more susceptible to rapid expansion and changing market conditions. The most important issue is the lack of planning. SME’s rarely think about planning. They are more reactive. If a business can be small, agile and small, it is able to be able to quickly move, however as sales increase and expectations rise, there are more issues.
Controlling inventory and supply chains especially in the face of massive logistics issues, is difficult without the ability to prioritize and plan. Cash flow is a major issue because the finances are spread out. Changes in the business culture with more employees joining the business, can result in low morale while customers’ expectations are extremely high and are becoming more difficult to meet.
Prioritising isn’t easy with no knowledge the way that certain actions have an impact on each department and process. In short, a rapidly growing SME without a plan is operating in a state of confusion with no idea of what’s just in the next corner. In today’s unstable economy it’s a big chance to be taking.
What SMEs must do is to find the right balance between implementing fundamental procedures that improve visibility and aid in decision making as well as preserving the methods and culture that helped make the company an success initially.
This is a leadership problem. How can SME leaders enable their organizations and take more responsibility and better choices regarding the direction for the company? They must organize, efficiently and effectively in order to achieve their goals.
Integrated planning: The key to supply chain resilience and resilience of businesses
One of the most significant problems facing businesses everywhere is resiliency and agility. The outbreak has brought about problems that existed in SMEs specifically with regards to cashflow, but it also has been an underlying factor for new problems to arise. Supply chains are now under increasing pressure, with the latest methods of managing inventory and customer service being scrutinized due to shortages of products that have disrupted business.
Events around the world continue to threaten supply chains, not just the conflict in Ukraine however, this is something all SMEs must deal with in order to sustain their growth. This requires a lot of reflection and understanding the fundamental operations of the company as well as the areas where they’re working well, and what is creating difficulties.
A key aspect is data. As Gartner states in its white paper Gartner forecasts that the next generation of technology for supply chains “most supply chain organisations are functionally siloed and therefore measured within their respective domains and roles.” This means that there is a limited opportunity to plan and forecast in the event that any information related to inventory, suppliers as well as future availability of products and the like, are not utilized to the fullest extent.
Furthermore, many SMEs still rely on paper-based procedures and it’s no surprise that how many SMEs are unable to predict the future. Addressing outdated processes is vital. To allow SMEs to enhance their flexibility, decrease risk, and empower their business and take responsibility it is essential to have an organized direction. The improvement of the flow of data, analytics, forecasting and planning is essential to this structure.
Every department has a job to perform and every sector will face its unique requirements in terms of expertise and finances, however with information and planning, decision makers can know better the best places to invest in order to facilitate growth. Which markets will be more profitable? Which customers will expand and continue to buy? Which are the most sustainable suppliers and dependable?
It doesn’t mean that the entrepreneurial spirit should be curbed. Absolutely not. In fact, a more well-organized and resilient SME with a clear plan that is based on accurate forecasting will only boost innovation, flexibility and motivation. When competition is growing as a result of a recession this can only be an advantage.