Technology opens up many opportunities for small and midsize business (SMB) owners to grow, serve their customers better, and ultimately raise more revenue. SMB owners must use technology to keep up with their competition or they risk being left behind.
During the recent Super Bowl, SAP hosted a live-streaming virtual community event, #SB50Disrupt, that reached millions of people around the world. During the event, they spoke with IDC analyst Ray Boggs on how SMBs can leverage new technology for maximum impact. Here are the key takeaways from this conversation.
Challenges facing small businesses today
The first challenge startups face is managing cash flow. It’s vital to ensure there is enough cash available to pay staff and suppliers. Once a small business is stable, the next step is to expand, which throws up many challenging transition points. For example, many businesses find opening a second branch very difficult, as the owner can’t personally oversee every detail. Another challenging transition might be moving overseas or into a new region.
Technology can help SMBs manage these transitions by automating processes so that the business owner or CEO doesn’t need to micromanage every aspect of the business.
Where should small businesses look for new opportunities?
Employees often have great ideas about how to expand a business, so it’s good practice to bring everyone together for an informal meeting once a month. Customers are another main source of ideas for growth. Many businesses have a fixed idea about how their product will be used, but customers may have other applications in mind that could open up new opportunities for developing the business.
However, Ray Boggs warns: Not all ideas are good ideas. There needs to be a process in place for vetting ideas and deciding which ones to adopt.
Opportunities in the cloud
Many SMBs already use the cloud more than they realize. Most begin by using cloud storage as a convenient way to manage files and data, and then they move on to using a cloud-based Web hosting service. From this point, small and midsize business leaders can consider moving other important operations into the cloud to make their organizations run more efficiently.
For example, Software-as-a-Service (SaaS) can be extremely useful for SMBs, as it allows them to pay for software via subscription rather than having to raise the cash to make a large initial investment. Through smart leverage of cloud technology, SMBs can make their operations more efficient, helping them compete with much larger competitors.
Competing with big companies
According to Boggs, the key to competing with the big boys is never go head-to-head. That means never trying to steal a larger competitor’s market by competing on price. A better approach is to choose a niche within that market and go after it by offering more specialized products or more intimate customer service. For example, a small bookstore can’t compete with Amazon on price, but it can provide the personal touch that some customers crave.
Strategies SMBs should avoid
“Don’t pretend to be a big organization,” Boggs advises. In many industries, customers are attracted to small businesses, particularly those in their local community, and are prepared to pay more for their products and services. On the other hand, very small businesses should avoid sticking rigidly to the way that things have always been done. Instead, they should use analytics technology to find out which customer accounts bring in the profit and focus on keeping those customers loyal.
Technology opens up opportunities for SMBs to compete with larger organizations. SMB owners can leverage analytics and cloud technologies to run their companies more efficiently and bring in more profit.
Building a successful company is hard work. SAP’s affordable solutions for small and midsize companies are designed to make it easier. Easy to install and use, SAP SME solutions help you automate and integrate your business processes to give real-time actionable insights. So you can make decisions on the spot.
Source: Ursula Ringham, for Digitalist Magazine by SAP.