SME Survival – Game on!

Over a rather longer than usual coffee break, a life-long buddy, in a moment of insight, restated the old axiom: tough times require tough measures!

As an SME owner, his expressed insight was that the SME community will be under incredible pressure to survive over the coming 12 months (some say 24 months).

Doom and gloom!!!!

As we traversed all the realities, myths, biases and stereotypes of the current economic climate, including the survival prospects for the SME community over the coming year, all the problems of the world were solved!

So, what did we conclude?

Well, we concluded that for the SME community, the first challenge is to not only survive the economic downturn, but also to buttress the SME owner’s sagging self-confidence!

An SME owner knows full-well that they get hammered from all points of the compass!

In difficult times, the big corporates cut rates, target the vulnerable SMEs, (e.g., particularly those in a position to steal market share by doing things more efficiently) and play the political ‘game’ with aplomb – like the SME finds difficult to replicate!

In addition, the Tax Office/IRS thinks the SME community are screwing them blind! Enough to want to make one less than optimistic!

So, the old adage was restated: When the going gets tough, the tough get going!

What does ‘get going’ mean and how does the SME compete with the corporates?

Simple, do it better, more efficiently, more personally and with passion! Don’t forget, ego kills SMEs.

Which competitor has the most complementary product/service to yours?

Well, put the ego in the hip pocket; assess which competitor you can work with best; partner with them – operate a strategic alliance – and share administrative and operational overheads!

Don’t forget, 2 + 2 sometimes equals 5!
Rubbish!

Check the recent acquisitions of late by corporates of vibrant and efficient SMEs.

Remember, no corporate can ever match your agility and your cost base! They are not your enemies; they may even be your retirement fund!


5 thoughts on “SME Survival – Game on!

  • Lin,
    Yes it is frightening, but there is now a third option for raising capital for SMEs, that is, the ‘Secondary Board’ facility where equity is traded for capital injection. Capital from $250,000 to $5,000,000 can be raised via this platform. However, many SME owners agonise over this option as they find it most difficult to trade equity in their ‘baby’ (i.e., the business they created) for growth capital. But, this is just a natural progression in the business growth process.

    Kenneth

    Comment from: Dr. Kenneth Preiss

  • What is frightening to a lot of SMEs, is when they cannot sustain their operations financially, they have no other option but to finance their purchases and partly their overhead expenses either by getting expensive loans from familiar sources or use their credit cards for small purchases. This often ends up being the start of the end for many sme’s.

    Comment from: Lin Hodgson

  • I remember reading somewhere recently that SMEs in China, which contribute to 60 percent of China’s industrial output and create 80 percent of the country’s jobs, are facing a unprecedented crisis. Their reasons however are a little different, shortages of electricity, capital and labor have led them to this predicament, and the soaring costs have made things worse.

    Comment from: Eric Chan

  • Kel,
    Thanks for the response.

    Kenneth

    Comment from: Dr. Kenneth Preiss

  • Bravo Dr Preiss! Unfortunately, ego is the death of many SME’s. Business owners that want to do it their way.

    Kel

    Comment from: Kel Charlton

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