The SME death toll piles up- Rethinking the one-man army mentality
There is absolutely no argument when it comes to the fact that the SME sector is the backbone of the current Indian economy, the current SME output contributing 45% of our GDP.
When one ponders over the demons haunting these enterprises, these are the points that first come to mind:
1. Lack of adoption to technology
2. Lack of access to A level talent
3. High employee turnover rates
4. Lack of Capital
5. Poor infrastructure and utilities resulting in low production capacity
6. Lack of innovation
7. Technology and digital knowledge gap
Although these points stand true, something we often don’t pay attention to certain issues which applies to a large percentage of these enterprises is they are mostly a one-man show or dare I say a one-man army.
The argument of “Access to cheap capital is key to growth for an SME” does stand true to a large extent as there are multiple constraints an entrepreneur faces due to a lack of funds.
All of this being completely justifiable, one can argue that when the end result of “growth” is measured by being broken down into daily tasks, we see a considerably large amount of time, effort and energy being spent by the captain of the ship focusing on the small repairs of the ship rather than navigating it.
Every organization, however large or small faces a range of issues that are multi-faceted, many of them relatable and few of them intricate and very personal to that particular entity.
When we break down the multiple functions of a business regardless of the industry, size, sector or segment, with the advent of technology the playing field is now leveled.
Although a one-man army can be extremely effective and focused, there is only so much ground they could cover as an individual, through our intricate and in-depth conversations with many of these entrepreneurs we have come to realize that the solutions to these problems are quite simple in theory but require large mindshare to execute.
This is where our enterprise Astor Walker could be of great value to such companies, explained below are 5 such quick fixes you can make to see an immediate boost in overall efficiency:
1. Build effective communication channels- Many of the companies that we have been lucky to work intricately with have multiple channels of communication, most of them if not all are informal, the simple process of documenting, creating and monitoring set Roles and Responsibilities and Key Process Indicators has improved efficiency in some of the companies we worked with by close to 45 % — 60%
2. Integrate technology to reduce the workload of mundane tasks- Customer Relationship Management tools are widely available nowadays, something as simple as implementing the right CRM could do the following things for you:
· It allows for consolidation of customer data and the basis for deep insights
· It speeds up the sales conversion process
· It increases staff productivity and reduces cost
· Improves customer experience by allowing personalization
3. Build an A-Level Team — Now don’t get me wrong, there is a very apparent catch 22 situation when it comes to hiring, everybody wants the best but can’t necessarily afford them, in this regard, there is a lot that effective tech startups can teach us about team building and co-founder chemistry.
4. Be more open to change — Innovate or die, a generic term we seem to hear in every business discussion although it is repetitive, the saying does hold some water.
Taking a closer look at the likes of Blockbuster, Polaroid, Toys “R” Us and Kodak we come to the realization that in today’s ever-changing world being the masters of our industry is not enough, there is always scope for growth and error and if you want to nip this problem in the bud, “Innovate”.
5. Build structures people can and want to be a part of — the rise of the startups we read about in the news every morning, raising large amounts of capital at humongous valuations does not happen by mistake.
Although startups are a completely different discussion altogether I would urge you to read more about how they operate and are comparatively more investor-friendly.
On the positive side, these challenges should be perceived as untapped opportunities for the SME sector. These challenges offer a broad scope to strengthen the foundation of SMEs in India.
I would like to thank you for taking the time to go through this article and hope this added value to you, for any more information on how Astor Walker could be of help to you, please reach out to me at sumair@astorwalker.in
Furthermore, Astor Walker has been appointed by Provenio Group, an entity that is looking to fund SME’s in India, you could read more about them at www.proveniogroup.org
