SMEs need to be nimble and innovative

EXPLOIT SIZE: AN EDGE OVER BIGGER RIVALS

Develop efficient business practices and work with partners to help your small business recover.

Challenging at the best of times, the quest to stay afloat as a small or medium-sized enterprise (SME) during the Covid pandemic has been an arduous battle. The pandemic’s economic impacts have been so devastating that around 33% of small businesses have closed outright.

Others, having survived through agile pivoting, dialling back to core functions and temporary closures, have begun re-emerging into the market, as narratives around economic recovery loom large in public discourse.

For SMEs to effectively bounce back in the post-pandemic economic recovery period, it’s important to consider how they can adapt their approach to become competitive, modernised businesses.

Covid has heightened SMEs’ need to innovate to reach their customers.

Digitisation is an important starting point, but developing more efficient business practices and working with partners will play a key role in how SMEs are able to recover.

Furthermore, agile new financial technologies (fintechs) are providing the capital and platforms for SMEs to thrive in 2022 through real-time access to funding, flexible cash-flow management solutions and digital first bank accounts, designed specifically for small businesses.

Having effectively solved the credit problem – the single biggest challenge faced by SMEs – fintechs are working towards diversifying their offerings with an array of related financial services attuned to the particular needs of SMEs.

These include artificial intelligence-driven cash-flow analysis tools to help business owners make better financial decisions, as well as solutions to help business-to-business companies manage their trade credit more efficiently and with less risk.

SMEs are one of the vital cogs that keep our economy turning. They have accounted for most of the new jobs created in the past four decades and much of the innovation which has characterised these decades.

Nevertheless, SMEs are frequently thwarted by the disadvantages they face in comparison with larger, established corporations with whom they must compete.

Factors like economies of scale, purchasing power and brand name recognition work in favour of larger corporations and conglomerates.

SMEs must now innovate and exploit the benefits their smaller size allows.

Successful SMEs are bouncing back by developing differentiated solutions and harnessing their agility to solve customers’ problems faster.

SMEs can also differentiate themselves through a more human approach, their close-knit institutional cultures and family like values to provide better working conditions for staff, as well as more personalised, emotionally resonant product offerings to set them apart from the dispassionate equivalents offered by larger companies.

This can help compensate for the higher production costs of small-scale operations.

Innovative corporate social responsibility projects can simultaneously serve the interests of SMEs’ marketing objectives and leverage the power of the public’s trust.

SMEs should cultivate resilience via digitised, client-centric solutions and the ability to remain fluid and responsive in the face of a tumultuous market.