SME Business Issues
Whether you manage medium enterprise with 250 staff or starting up a new business venture ensuring the daily operational effectiveness takes time, energy and valuable resources. Not surprisingly proactive strategic planning, corrective actions and risk management are often replaced by day-to-day crisis management.
The following independent research confirms this…
The Symptoms of Decline!
According to a Department of Trade and Industry (DTI) report there are many key symptoms displayed by declining companies. Perhaps you recognise a few?
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Does your company recognise these symptoms?
- Gradual decline in turnover and operating profit
- Loss of key customers
- Reduction of cash balance
- Loss of key staff
- Difficult to recruit new staff
- Losing new business to competition
- Operating expenses increasing
Source: DTI 2002 Prodata Report
Where do SME Management get Advice From?
Yes there’s lots of business advisors but who can you trust to coach your senior management?
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* Source (Bennett R J and Robson P J A, 2005)
Clearly this is in complete contrast to major corporations, Government Agencies and NHS Trusts who regularly bring in academically qualified management consultants to coach their senior executives.
Why Do Businesses Fail?
Unfortunately even the best business ideas fail. Find out why about 40% of VAT registered businesses fail.
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According to the Department of Trade and Industry (DTI) ONLY 62% of companies that registered for VAT are still surviving after 3 years citing the following reasons…
- Lack of forward planning - often strategies that aim to be all things to all people
- Poor leadership - leaders should have followers, often the people skills for successful leadership are lacking
- Lack of investment - at the right time
- Cash flow problems
- Lack of Innovation - inability to capture and manage innovation
- Inertia - reactive as opposed to pro-active / inability to change - culture too deep-rooted
- Lack of Business Experience
- Inadequate market research - i.e. it feels good, let’s do it!
- Little or no external help
- Not customer focused - this is what we want to deliver
- Wrong product (or service), wrong price, wrong time
- Lack of Teamwork - Little encouragement for people to work together as a team
Source: DTI 2002 Prodata Report
Management Issues
What keeps you and your management team awake at night? These are typical business concerns…
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Recent research as part of a Masters Degree in Business Admin (MBA) conducted in 2007 highlights what SME management regards as their biggest business risk and concerns.
Ranking of Management Issues |
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| Issue | Score | Percentage | Rank |
|---|---|---|---|
| Customer Retention | 261 | 72% | 1 |
| Skilled Staff Recruitment | 258 | 71% | 2 |
| Sales Performance | 250 | 68% | 3 |
| Customer Dissatisfaction | 250 | 68% | 4 |
| IT Systems Unavailable | 249 | 68% | 5 |
| Increasing Operating Expenses | 248 | 68% | 6 |
| Industry Competition | 238 | 65% | 7 |
| Low Staff Productivity | 235 | 64% | 8 |
| Key Staff Retention | 234 | 64% | 9 |
| Cost of Goods and Raw Materials | 228 | 62% | 10 |
| Telephone System Unavailable | 228 | 62% | 11 |
| Increasing Admin Costs (People) | 218 | 60% | 12 |
| Cash Flow and Working Capital | 208 | 57% | 13 |
| Slow to Introduce New Products & Services | 203 | 56% | 14 |
| Security of Intellectual Property | 194 | 53% | 15 |
| Mobile Phone Network Unavailable | 190 | 52% | 16 |
| Internet Trading | 167 | 46% | 17 |
| New Entrants to UK | 164 | 45% | 18 |
| Foreign Exchange Rate | 163 | 45% | 19 |
| UK Interest Rate | 162 | 44% | 20 |
| Withdrawal of Financial Support | 160 | 44% | 21 |
| Obtaining Finance for New Investment | 160 | 44% | 22 |
| Insufficient Funds to Market Business | 159 | 44% | 23 |
| Offshore Outsourcing | 153 | 42% | 24 |
| Cheap Imports | 123 | 34% | 25 |