The economy is changing for small to medium enterprises (SMEs). Taner Kilicarslan, the founder and chief executive of SME Rebuilders, a small-business consultancy, speaks about the new norm and explains how firms can continue to grow.
You recently held a workshop for SMEs. What did you talk about?
The purpose of the presentation was about business growth for SMEs. I named it "A Flat Economy" because I think a lot of people don't realise that this is not a part-time condition. This is the new state of the economy, so [SMEs] have to shift the way they think.
So how do SMEs achieve growth in a flat economy?
There are a number of different things. One of the things that's great about SMEs is that they are flexible and they can innovate faster than large companies. They're not under the same overhead pressures and having lots of staff. But, essentially, they can use various things to their advantage.
Such as what?
The majority of the first conversations we have with either SMEs or divisions of large companies that aren't performing is strategic planning. There are really two factors to success in any business, regardless of the size: first, strategic planning, and then executing that.
What do you put in your strategy?
A strategy is really about understanding the benchmarks and the goals. It has to be a smart goal and it has to be specific, measurable, achievable, realistic and time-bound. It could be about … understanding the timing of market penetration, when to walk in. Sometimes SMEs have to allow some other companies to penetrate a market [and] make the mistakes to let SMEs see they can go into that market.
Can you give an example?
A lot of people don't realise that Friendster was out before Facebook. Why did Facebook succeed where Friendster failed? Facebook understood timing and focus, so its business model was to hit university students on a specific campus at a specific time following a certain model, and they would grow from there. All they needed was a few hundred people to gain traction, which they did, whereas Friendster just didn't capture that model properly.
What else should SMEs consider?
The ability to manage change is one of the key facets of success. Change could be innovation or flexibility. Since the economy has shifted, so has the way consumers [use] products and services. Mobile apps are the easiest [example]. A friend of mine owns a forex company … They have decided to create an app whereby you can actually now do some of the online trading through the app. They have just decided to go mobile since consumers have gone mobile.
Are there any other ways to grow in a flat economy?
Company-wide coordination and cooperation. So, clearly defined roles of everyone within the company, and then, of course, responsibilities have to be agreed upon.
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