SMBs are defined by their number of employees and annual revenue. SMBs aren’t always the ten-person mom-and-pop shop on the corner. Common definitions classify companies with up to 999 employees and up to $1 billion in annual revenue as SMBs.
No matter the region, the allure of owning a business is often idealized, evoking images of being financially independent, enjoying flexible hours, and influencing meaningful industry impact. Of course, it’s not always that simple, but SMBs certainly play an important role in modern global commerce, often leading innovation and driving best practices.
What are the beneficial characteristics of SMBs?
SMBs have some important strengths that make them ideally suited for the digital era. Let’s take a closer look at seven of those attributes, some cautions, and advice on how to optimize strengths:
1. Agile. The modest size of an SMB is one of its great strengths. Anyone who has been kept awake all night by a buzzing mosquito knows that an opponent doesn’t have to be big to wreak havoc. The same is true in the business landscape. SMBs can be highly agile, nimble, and able to “fly under the radar” as they challenge market leaders, attacking their vulnerable spots with one targeted product launch or campaign after another.
–Advice: A balance between speed and smart decision-making is important. Investing in analytics software will help the idea people become data-grounded, leveraging predictive science, not whims.
2. Innovative. SMBs tend to be creative problem-solvers with innovative ideas. Game-changing concepts are often the core of their business. Driven to transform an industry, product or process, SMBs are often bold change-agents, unafraid to take on risks and test-pilot new endeavours. Recklessness, though, never has a place. SMB chief officers, loving the fast-track adrenaline rush, can sometimes over-indulge their exuberance for change. Change, without substance, can be unnecessarily disruptive.
–Advice: The SMB may need to put some safeguards in place, like requiring two signatures on purchases over a certain level, to encourage thinking before leaping. Software solutions, like Product Lifecycle Management (PLM) solutions, also can help manage that creative energy and channel it into product development, stepping the R&D team through a controlled, practical process that includes any relevant regulatory compliance.
3. Attentive. Customers tend to receive attentive care from SMBs. The customer-facing account managers or salespeople may also be the chief officers, able to make top-level decisions to support a customer’s needs. SMBs tend to intimately know their customers’ pains and decision-making influences. This close relationship often leads to a symbiotic, partnership-like bond that is collaborative and long-term.
–Advice: To help manage the relationship and overall account-health, SMBs can turn to Customer Relationship Management (CRM) solutions. CRM software helps managers focus on building the relationship while keeping an eye on profitability, next likely purchases, and long-term growth trajectories.
4. Modern. SMBs are often digitally native and comfortable with transformative technologies, like the Internet of Things (IoT), automation, and Artificial Intelligence (AI). SMBs often embrace e-commerce and use online tools to communicate with customers, collaborate, share data-driven facts, tell their sustainability stories, and support social causes relevant to their customer base
– Advice: To meet customer expectations, SMBs need to be digital masters. That means e-commerce that can suggest next likely purchases, highly personalized products, supply chain management solutions that can track and manage the network, warehouse management tools to stock the right products at the right place, and dynamic pricing science to stay relevant in today’s fast-shifting economy.
5. Growing. SMBs tend to be growth-driven, eager to expand into new target markets and geographies. The entrepreneurial spirit naturally propels key stakeholders, whether family members or investment partners, into expansion-mode, envisioning new opportunities in emerging markets and exploring options for mergers and acquisitions.
-Advice: SMBs today can opt for software solutions that are highly scalable and can expand as the company grows, adding employees, creating new divisions, or expanding into emerging markets. It’s no longer necessary to “rip and replace” when the company makes an acquisition or merges with another company. Highly flexible operating systems can help two different software solutions integrate, sharing data, and creating a common version of the truth.
6. Productive. Stakeholders in SMBs work hard, often putting in long hours. But, as the company grows, more personnel have to be added. For SMBs, stretching the productivity of each employee is essential. Today’s shortage of skilled workers adds to the stress, often forcing companies to “make do” with labour resources that are less-than-optimal. Perhaps the company must hire workers with minimal skills and provide its own training.
-Advice: SMBs should empower their workforce to make well-informed decisions that are proactive and aligned to the company’s strategic plan. Each employee should be able to work smarter, not harder, taking advantage of easy-to-use reporting tools, role-based workbenches and dashboards, knowledge bases, and prescribed workflows that push data to users, guiding them through best practices and smart, well-informed decision-making.
7. Frugal. One of the great strengths of an SMB is its frugal nature, conservative approach to investments and conscientious use of resources. Fresh memories of the start-up phase when finances were lean may be one reason. The SMB also may be trying to lure investors or prepare for an Initial Public Offering (IPO). No matter the reason, SMBs often need to monitor cash flow closely, carefully timing investments. This can make purchasing a new ERP software solution challenging.
-Advice: Fortunately for SMBs, cloud solutions, with a monthly subscription model, provide smart digital tools and end-to-end efficiency — without a large capital investment up front. This makes it easier for growing companies to step up their operational and financial processes, without over-stressing cash flow.
SMBs are ideally suited to thrive into today’s fast-paced economy. Unlike large enterprises, with layers of decision-makers and rigid approval structures, SMBs can identify an opportunity and take swift steps to respond. Agility is just the beginning. SMBs exhibit many strengths, from being innovative to remaining frugal. These strengths, though, all can be stretched beyond limitations. Fortunately, modern software technology will support SMBs' natural strengths, enhancing opportunities for growth. Software technology gives SMBs the data-driven insights they need to feel confident about their future, short-term and long-term.