In business, while all bases must be covered, some things are just naturally more important to get right than others. SME’s in particular need to focus intensely on those key processes that will help ensure the continued success and growth of the organization.
Below are some of the main business processes that every SME owner will want to ensure they are well and truly on top of:
- Cashflow. Even companies that are profitable on an underlying level can soon have the grim reaper of bankruptcy knocking if cashflow and working capital are not properly controlled. Sometimes, the problem rather than cashflow itself is the fact that small business owners who are not particularly business minded don’t possess the business and metrics skills to highlight any looming problems. Aside from ensuring that a sufficient reservoir of working capital is always available, it’s equally important to line up some defenses by way of emergency funding should the need arise. At times when bank lending is notoriously shy, good SME management will look to tap into alternative models to raise short term finances – such as peer to peer lending companies (like Zopa).
- Trend identification. Don’t sit still or relax for so much as one second – the business environment is constantly evolving. Customers requirements and desires will evolve incrementally, and good SME management will continually check to see how they should respond. Methods of delivery also change. Who could have predicted just how furiously the internet was set to re-shape the way business would be conducted? Certainly not a surprisingly large number of the big boys – companies that once were considered untouchable in the 80’s and 90’s (including certain big brand high street travel and music/video chains) have been swept aside by internet based business models. Your business should always have a wide ranging plan – this should be reviewed at least once a year, and identifying and responding to emerging new trends should feature somewhere within it. Creating a SWOT analysis can help with this – a SWOT analysis simply looks at your business and the environment within which it operates and aims to identify new strengths, weaknesses, opportunities and threats.
- Metrics. Remember how in the first point, we identified how poorly managed cashflow can take down even the most promising of companies? The use and application of simple metrics aims to identify and correct exactly this sort of issue. Ideally, your SME should produce monthly management metrics which combines a variety of data from various business departments into calculations that can help determine how well the business is performing. There are a slew of different metrics available – aside cashflow and liquidity, you should be measuring inherent profitability, staff and operational efficiency, gearing and more. Good metrics will also have a yardstick against which the numbers may be measured – industry averages or versus past company metrics.
- The internet. No business is an island – in a way, we’re all digital businesses now. The internet has linked everyone and if you’re not getting a grip on the digital world, you’re both missing a trick and lie in threat of having market share stolen by your competition. There are many tentacles to getting your business online – it’s not just about setting up a website – online and social marketing and online reputation are huge components that you’ll need to address as your SME fights the digital battle.