RCPA CA - ECUADOR
RCPA CA - ECUADOR
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Four Practical Strategies for the Growth of Small and Medium-Sized Enterprises
Successful SMEs are those that choose to have strategic partners.
Theory has often been discussed in times of crisis, but now is the time to put that theory into practice and seek strategic alliances to grow towards success.
Now we must answer : how do people and companies function in times of crisis?
Simply put, everything is geared towards saving costs and controlling the level of financial debt , but this implies knowing how to take risks.
Great! Now we'll talk about how a person behaves in a crisis in general terms. This ends up affecting the decisions they make in a company, so understanding this nature will help you make better decisions and know what risks to take.
One of the main decision-making mechanisms (if not the main one) that we humans usually use is that of expectations.
Essentially, we have two basic decision-making mechanisms: based on what has happened to us (if we have been burned in the fire, we don't put our hand in again) and based on what we believe will happen in the future, that is, taking into account our expectations.
The first drawback is that expectations are almost never the product of reasoned analysis, but are essentially colored by our emotions and desires.
That's neither good nor bad; people are like that, not computers that coldly calculate by only looking at the number.
The second problem is that we are incredibly bad at predicting the future.
This leads us to engage in inefficient practices, believing they are the most appropriate, but NO! These practices will only cause our business to fail, suffering the devastating effects of decisions based on hunches. This is serious; we must accept that expert help is necessary, and this isn't a bad thing—it could even serve as an example for the business community.
Now that we know what we're bad at, we must focus on how to avoid it and, above all, how to keep the ship afloat in a high-level storm.
4 Practical Strategies for Success in SMEs
Operational efficiency
One of the main challenges for the growth of medium-sized companies is the complexity of administrative tasks and functions, such as the use of personnel management and payroll tools.
"The increased administrative burden and manual processes create major difficulties for medium-sized businesses," says Greg Bloom.
These administrative burdens also deplete finance and HR resources, "stealing" time that employees could dedicate to more strategic activities, such as data analysis or business collaborations.
"To achieve the expansion and growth of mid-sized companies, whether organically, through mergers and acquisitions or by initial public offering, financial and accounting functions must be outsourced as a more strategic activity," says Bloom.
Automation
Technological advancements allow mid-sized organizations to automate many time-consuming processes. Enterprise applications that utilize in-memory computing, integrate business process frameworks to improve efficiency and scalability, and are cloud-based solutions are particularly well-suited for these tasks.
Sophisticated technologies that once seemed unaffordable for many medium-sized companies are now within their reach and are easier and faster to implement than legacy systems.
Let's now look at the functionality of HR, where automated processes can have a considerable impact on the business's growth capacity.
Adaptation
Midsize organizations have a unique advantage over large ones: agility. "Midsize companies have room to grow and aren't bound by the law of large numbers," says Stewart. "That allows them to move more quickly and capitalize on emerging trends."
In today's environment, companies must recognize change and be prepared to face it, whether by identifying potential disruptions or competitive threats, complying with new regulations, or keeping up with evolving customer expectations.
Financial and Accounting System
SMEs can focus time and human resources on more specific business tasks; therefore, accounting, tax, or financial tasks can contribute to ongoing planning and adaptation to the crisis environment in which they operate. There are some examples of financial strategies that some SMEs internationally have adopted to concentrate on business growth, including:
• Promote competitiveness in SMEs based on benchmarking and productivity.
• Establish innovation periods per line or product, no longer than one year.
• Conduct periodic evaluations of financing options and determine the Weighted Average Cost of Capital monthly.
• To reduce financial risk, investments should be diversified periodically.
• Conduct a monthly analysis of financial ratios to measure the company's economic performance.
• Similarly, analyze the financial statements monthly.
These strategies help to better guide the company by having two important approaches, the financial and the strategic, to protect and improve the necessary accounting functions and increase competitiveness in the market that the SME provides its services or products.
These types of strategies can help you take risks and deal with them better, especially if you know how to choose the right ally. Of course, this should be an expert in different areas such as accounting, legal, financial, etc., who could help you overcome crises through something as simple as giving you more time.
