What can we learn from the small business community?

Andy Nash looks at three key areas in which SMEs lead the way: managing growth, reacting to topical issues and sustaining strong leadership.

With 2016 beginning to wind to a close, small business owners up and down the country – and across all industries – will be reviewing their year. The last 12 months will have been full, in varying degrees, of growth, setbacks, success and surprises. Consequently, many of those business owners will be trying to predict what the next year may hold and considering which lessons they can carry with them into 2017.

However, it’s not just small business owners who can learn from the trials, tribulations and triumphs of the SME community in 2016. Larger businesses constantly seek development and there is always room for improvement. Indeed, large enterprises can learn a great deal from the vibrant small business community.

In my opinion, there are three key areas where SME businesses are forging success: business growth, business leadership in today’s (economic/political) climate, and the issues currently facing UK businesses.

The small business community can offer a great deal of insight on these areas to larger organisations, but there is one particular lesson which will improve their operations: an increased willingness to adapt, not only to the world around them, but also to the needs of the business itself. This is one of the principles which have been so central to the healthy growth, and ultimate success, of businesses in the SME community this year.

Embrace potential growth

World events shouldn’t put your business on hold

2016 may have brought more change than we’re used to, but life goes on. A tough political and economic climate doesn’t mean that businesses have anything to worry about; our Brighter Business report has shown that nearly one third of respondents feel more confident about their business now than they did prior to the EU referendum. 59 per cent of respondents are expecting to increase their headcount, and 61 per cent of decision makers expect the income of their business to increase over the next two years. Such positive attitudes fly against the pessimistic narrative which has overshadowed much of the last six months.

Be prepared to be flexible

SMEs don’t have the option of being complacent; when the business landscape begins to shift, small business must learn to adapt, change their plans and approach, and make the current climate work for them. Larger organisations, which are widely known to be less flexible in their approach, can learn from SMEs in this respect. The flexibility of small business can act as a signal of sea-change, indicating changing consumer trends which large businesses may not be able to identify as quickly or efficiently as SMEs. Adaptability is key.

Notice the warning signs

Canaries down the mine

In the same way that SMEs can identify changing consumer trends, they are often also the first to experience serious issues in the business world. Whether it’s a case of skills shortages or low unemployment rates, SMEs are on the front line. In terms of skill shortages, every employee counts in a small business and it’s much more difficult to hide an unskilled worker. In this sense, large companies can learn a great deal from smaller businesses to focus on improving in their own operations, such as identifying weak links in the workforce.

Back to basics

In smaller organisations, one employee can quickly become the face of the brand; because of this, employees in smaller businesses need to be able to get their customer service right, every time. While an employee at a larger company might be more or less anonymous to a customer, small businesses don’t have that luxury. Getting customer service right can lead to return custom and brand loyalty, and getting it wrong can cost a small business dearly. To get employees to buy in to this philosophy, SMEs need to ensure that their employees are happy and engaged with their work. Being an employee in a large organisation can lead to disaffection and a lack of employee engagement, which can in turn lead to poor customer service. Larger businesses can learn that getting back to the basics – with mantras such as keeping employees happy will keep your customers happy – pays dividends in the long run.

Teamwork makes the dream work

Don’t be a lone wolf

You may be the head of a small business, but that doesn’t mean you have to do everything by yourself. Having a close-knit team around you means you can take some of the pressure off and spread the responsibility round a group of capable people you trust. Equally, large organisations should be able to identify where and when their processes are weak or unsuccessful – shifting responsibility around will give key players a rest, while also giving other team members a chance to rise to the occasion. Placing trust in employees is one way of keeping them engaged and happy at work.

Streamline your processes

A smaller company which is only a few years old is capable of making changes to crucial areas, such as senior management, much more quickly than larger organisation may be able to. For example, the CEO of technology company, Four Square, stepped down from his role in early 2016. He did so after realising that his experience as the leader of a start-up sized organisation wasn’t sufficient for a growing business. A decision like this would undoubtedly require much more time and be subject to a lengthy approval process in a large company, however, streamlining these processes can save time and money.

It’s clear that large businesses can learn a great deal from smaller organisations. However, the relationship between SMEs and large businesses is a symbiotic one; if small businesses can teach lessons, they can also learn a few from other successful businesses. There are processes in place at large organisations which allow for transparency and clear communication, and SMEs may be able to implement some of these strategies, developing good practices in the workplace.

Andy Nash is director of operations at Opus Energy

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