Thursday, 17 June 2021
The SME owner who doesn’t question whether they could be doing things better runs the risk of floundering – so we asked six business experts for some easy-to-implement ‘tweaks’ that could save time, boost morale and increase profits.
Sarah Shreeves, head of training and consultancy at Exemplas Performance Improvement, says that these can take just five minutes to set up and they will give you invaluable commercial intelligence. “You can quiz customers on a wide range of issues, from asking what new products they would like, to finding out what they think of your product or service, gathering real-time market intelligence,” she says. “It could really give you that competitive edge.”
Shreeves says smart SMEs will be committed to the development and training of their team, and that the 70/20/10 model provides a good framework: “70% of development should come through learning on the job,” she says, “20% through learning best practice from others – so make sure you’re ‘buddying’ employees on tasks to ensure knowledge is shared – and 10% should be from formal learning.”
A meeting with ‘the enemy’ may sound strange, admits entrepreneur and alldayPA CEO Reuben Singh, but he says it’s common practice for large enterprises and PLCs to meet up to share ideas. “Naturally,” he says, “entrepreneurs are hesitant to do so for fear of a hidden agenda, but you’ll have the opportunity to make improvements to the industry as a whole – and who knows what it could lead to for your business?”
SME owners sometimes forget that staff can be their greatest allies, and Richard Tidswell of Business Doctors says it’s easy to get them involved. “Give everyone a voice and ask them: ‘What’s working well?’ ‘What’s not working so well?’ and ‘What should we start doing?’” Ask the team if there was one thing your business could do in the next 90 days that would improve your customers’ experience, what would it be? “Similarly,” says Tidswell, “if there was one thing you could do to make the business more efficient, what would that be?”
“The reality is that many businesses don’t charge anywhere near the tolerance point – the level at which customers will begrudgingly accept without leaving”Carl Reader, director, TaxGo
When a business is productive and things are ticking along nicely, it’s easy to miss all those threats that could hit like a juggernaut – be they cyber, competitive or financial. Tidswell recommends sitting the team down and coming up with a list of all possible risks that are facing the company. “Score each on a scale of one to five for the likelihood of it happening and also for the impact on the business if it did happen,” he says. “Then, multiply each score, rank the answers from high to low, take the top five and see what actions you can take to reduce the likelihood of them happening and/or reduce the impact if they were to happen.”
They are the lifeblood of most companies, but emails sap your time, too. Carl Reader, director of TaxGo and author of The Startup Coach, advocates the idea of checking in only at specific times, and keeping your inbox closed for the rest of the day. “If you find you can’t resist going back to check, do what I do and consider having them redirected to an assistant who can filter them to you at set times,” he says.
OK, so perhaps not for everyone, but Reader says we should hear him out: “Too many businesses worry about inflating their prices to cover their increasing costs,” he says, “but the reality is that many don’t charge anywhere near the tolerance point – the level at which customers will begrudgingly accept without leaving.” He says that businesses like Sky are great at increasing prices enough to make people grumble, but not enough to leave. Some interesting maths: Reader says that for a business with £200,000 turnover and £20,000 profit, a 10% increase in prices will double profitability. “Unless you’re at the tolerance point,” he says, “this will almost certainly not result in a 10% loss of customers.”
This, says Ian James, entrepreneur in residence at business incubator SETsquared Surrey, will help you to define and record the steps that prospective customers take that lead to a successful sale. “For example, measure unique hits to your website, email inquires, face-to-face meetings, requests for proposals, orders received, and so on,” he says. “You will start to build a picture of the volume of activity, the conversion rate to orders, and the average time this takes – meaning that you are then set up to run experiments to test the impact of a new marketing campaign, for example.”
Many SME owners work exclusively ‘in’ their business, meaning they never find time to step back and see what they should be doing strategically ‘on’ their business for long-term success. James recommends setting aside time every week to address this. “If a business is to grow, it is critical that you set aside at least half a day each week reviewing progress, looking for ways to improve efficiency and working on your plans for future growth and new ideas to generate revenue,” he says.
Failing to understand the figures that underpin your business is one of the worst things an SME owner can do, says business coach Stuart Allan. “People delude themselves,” he says. “They look at their annual accounts, and that’s it. But what you need are detailed costing templates, cash-flow forecasts, an understanding of your margins and a lot more.” A business adviser can help, though there is software such as PlanGuru that you can use, too. “If you’re running a business and don’t know the numbers, it’s like watching a sports match and not knowing the score,” says Allan.