Challenges facing SMEs in the current climate
The challenges facing SMEs in the current climate are ones of finance, promotion, sales and marketing, HR, IT and production plus many more. Where can they get an overdraft, loan or extended credit facilities? How do they promote themselves, identify their customers’ needs and market their products to match those needs? They may have HR or IT issues? These are only a few – sound familiar?
These are the same challenges larger business are experiencing, but in the case of a larger business they will have directors, departments or probably the personnel to assist with these challenges. Group thinking to solve problems: a problem shared is a problem halved! SMEs generally don’t.
Mostly, the SME does not have such internal support. How do they cope? Most struggle. Some rely on professional assistance (if they can afford it), family or friends who will listen if they can give the time, but who may not have the expertise, others contact the Small Business Advice Programme www.smallbusinessadvice.ie, where we offer free and confidential advice to SMEs.
Over the past four years, we have heard and dealt with all the problems and challenges SME owners encounter while they keep their business going. Initially, when we launched the service in October 2009, the main requests for assistance were financial – negative financial. I owe, how will I pay? I need to reduce staff, what are the procedures? I need to cut costs, how should I do it? Latterly the problems are positive ones – how do I grow my business; how do I market or promote my business, can a business coach come and review my business and give me some practical advice to help me improve as an owner?
Financial queries tend to be for assistance with balancing the books, managing cash flow and sourcing finance. We always encourage the SME owner to engage with their accountant on a regular basis and speak with them about setting up simple, easy to use forms so that the owner can see on a weekly basis how their finances are. This should give them greater information when making important decisions.
Similarly, SMEs should keep in regular contact with their bank business relationship manager. The more information available and shared, the quicker decisions can be reached with regard to finance, loans or overdrafts. However, if bank credit is unattainable, there are other sources of funding now available for businesses to consider.
The most popular request for assistance currently is “how do I grow my business?” or “how do I market my business?” Businesses who have survived over the past few years are now looking to grow and expand and they may need assistance in identifying new markets and how to reach them. They may need to become more technically aware and find the most suitable media – web, social, print or other – in which to promote their business. We help them identify what they are trying to achieve before they engage the services of a media expert.
Another popular request is for someone to come in and review the business. A “third-eye” to give the owner some reassurances that they are running their business well, or some helpful tips that may improve their skills as an owner / manager.
So, as you can see from above, the issues facing the SME are really no different than those of larger companies and the Small Business Advice Programme is here to assist the SME with the decision making.
John McSweeney, Small Business Advice Programme
The views expressed in the posts and comments of this blog do not necessarily reflect the views of the Institute of Directors in Ireland. They should be understood as the personal opinions of the author. The content of this blog is for information purposes only and the Institute of Directors in Ireland is not responsible for the accuracy of any of the information supplied.