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Staying in the Helicopter™ -The Seven Secrets for SME Success

99.8% of all companies in the UK are SMEs (defined as companies with less than 250 employees) and I imagine similar statistics would apply in many other countries. It is clear therefore that SMEs are simply vital to the future of any country and its economy - after all, as well as their sheer numbers, what do large companies start out as?

I have worked with SMEs of all sizes across many sectors worldwide and for me there are seven absolutely vital secrets to success.

The first is perhaps the most obvious but equally that which rarely receives the attention it needs. What is your purpose? - and by that I don't mean your mission statement or vision or objectives. It is a much more fundamental question than that - what are you in business for?

When you start out with a new business it may be merely as a result of a bright idea that you want to exploit, or you may have decided to get out from corporate life and are looking for a "living" or something similar - but those reasons are not enough. It is actually very important that you define exactly what it is that you are seeking to achieve.

More often than not the business (and personal) purpose is financial - it might be for example to sell the business in the future for the highest price or it might be to create something of value that you wish to pass on - or, of course, might be a wholly altruistic.

Larger SMEs might be second or later generation family businesses and here it is even more important for the owners to define the purpose of the business they have inherited.

If you've read Steven Covey's book The Seven Habits of Highly Effective People number two is: "begin with the end in mind" and that is really all we're talking about here - defining exactly what the is that you have in mind for your business.

Even for SMEs at the top end in terms of size - which may be private or publicly quoted businesses – I often find they have not defined precisely why they are in business and what their purpose is – but maybe just assumed it which can be very dangerous!

My recommendation is to work very hard at refining your purpose down to one sentence and then get it to half a sentence – and do you know what? If you can get that kind of laser beam focus on your purpose you will stand a very good chance of achieving it.

The second secret for success is very simple: have an exceptional financial person alongside you.

Exceptional financial people look forward, not just backwards to prepare the figures, they anticipate the future and give you early warning and advice. Whether a new start-up or a large, mature SME I have seen many companies get into trouble simply because they did not have this type of forward-looking numbers person.

I cannot emphasise enough the importance of finding such a person to either work for you directly - or in a smaller business from an outside accounting firm. You must have someone who regularly looks forward and anticipates from the numbers and also has the strength of character to be prepared to "kick your door open" and give you advice that on occasions you may not be wanting to hear!

Number 3 is: never believe the money lenders.
How many times have I heard CEOs say to me "My bank is not supporting me with, lets say, an increase in overdraft I desperately need - despite offering me one in the past, despite the fact that we've been with them for ten years, and despite that fact that I play golf with the bank manager every week"

I don't think it matters who the money lenders are - whether they are highly reputable banks or financial institutions they can, and do, change their opinions on a whim and you must be prepared to that. You should not forget, however, that it is your job to keep them informed of your business progress and your future needs – and don't give them any surprises as they alone may make them view you in a different light.

The next secret is to make it easy for people to do business with you.
Very few businesses these days, very few SMEs these days, are mediocre at what they do. The business world is now so brutal that those people simply disappear. This means that you are probably very good at what you do - the product or service that you provide - and so are your competitors.

It is increasingly the case, therefore, that the way by which you must differentiate yourself from your competition is in the service you provide and the ease with which people find they can buy from you – and it is often the smallest detail that may make the difference.

I often quote an experience I had earlier this year when I was looking to buy a product and went to the company's website. I was very happy with the product but I had a couple of questions so I asked these through the "contact us" button. 10 days later I had received nothing from them and so I called them and they said "yes we keep forgetting to check those e-mails from the website". That’s not good enough - I bought from elsewhere.

It is that attention to detail which is so important and, by the way, it is where a start-up business can have a real advantage by developing an all-embracing customer centric culture from the very beginning.

Next - be outstanding at sales and marketing.
You cannot avoid it - it doesn't matter how good your product or service is, it doesn't matter how small the market niche is that you address, it doesn't matter that it is not your forte and that you feel you have to spend time on, let's say, the technical aspects of the product -- you have got to find a way to be outstanding at sales and marketing.

These days neither sales at all marketing need to cost you a lot of money. Your marketing needs to be targeted on those who are most likely to buy, creative above all else, and never the same as your competitors. There are 10 knowledge is and vehicles for marketing and available these days which can fulfill all the above at minimal cost.

You should develop a culture in your business that every single person who ever had any dealings with customers views themselves, and is trained as, a salesperson. Remember the two greatest success factors for salespeople are enthusiasm and product belief -- not highly developed sales skills and technical knowledge.

The penultimate secret for your continued success is to be acutely aware of, a plan for the business growth "tipping points".
Businesses have to change character as they grow and this can be very painful unless planned for in advance.

For some time as a business grows from start-up the MDO (Managing Director Owner) or CEO will find that it is easy for him or her to know everything that is going on in the business and to keep their fingers on the pulse. There comes a point however - and this may be when employee numbers get over 20 to 30, or when there are multiple sites, or when the MDO spends a majority of time away from the office - when two things have to happen:
• the MDO/CEO must delegate more
• formalised disciplines need to be introduced into the business. These might include, for example, setting up a regular ‘Management Meeting’ for everyone to be aware of what is going on and also provide strategic direction.
Failure to do either of these may inhibit the growth of the business on the one hand and put it at risk on the other.

There is a second tipping point which may or may not coincide with the first. This is when the people in the company find they have to start writing to each other rather than talking directly. This can be quite traumatic unless handled properly from the top.

Throughout both the above phases you can see that the business will, inevitably, be moving from a "right brain" entrepreneurial, creative, possibly laissez-faire culture towards one with a good deal of "left brain" structured, disciplined, underpinning. Whilst this migration is essential it is important to get the balance right throughout and ensure that the "right brain" creativity, flair and entrepreneurial spirit is not then lost in a sea of bureaucracy.

The key to success throughout these periods of growth revolves around people. As we have just discussed, CEOs must ensure that one the one hand they have in place the disciplined “completer finisher” type of individuals, whilst retaining the essential creative, entrepreneurial individuals – who often react badly to the imposition of structure and discipline.

Finally CEOs must developed finely honed skills and a tough skin to recognize when, maybe long service and loyal, employees reach their ceiling and take the really difficult decision in the interests of both the business and all those who now work in it.

The final secret of success for any SME is to ensure that you have access to regular, objective, and unbiased external advice.
This needs to be from someone who has "been there and done it" – not your accountant, banker or lawyer. They may be either a business adviser or a Non-Executive Director but you should see them at least monthly as a matter of course.

They will fulfill a number of roles not least that of bringing the all-important outside view to the business, giving experienced objective advice, providing extensive contacts and finally be able to act as a mentor/coach to the CEO and possibly his team.

So there we are - my 7 Secrets to Success for SMEs.
Running an SME is not easy but if you really can "get in your helicopter" and keep a constant eye on these seven key areas you will significantly improve your chances of achieving the success that you deserve.

© 2007 Roger Harrop Associates

Article Source: http://www.bylamoarticles.com

Speaker of the Year with the Academy for Chief Executives, Roger Harrop is a former plc CEO, international speaker, author, business adviser and consultant who inspires and entertains his audiences with his acclaimed Staying in the Helicopter ™ series. Over 3000 CEOs and others have achieved massive growth in profits and sales through his thought provoking and entertaining talks laced with real-life stories, anecdotes and humour. He is an expert on sustainable profitable business growth. Get your free e-book "Everything you wanted to know about profitable growth but didn't know whom to ask" at www.rogerharrop.com

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