IT’S what everyone who’s ever wanted to start a business or already running one aspires to achieve - to grow big. But growing a small business is riddled with challenges.
The following, though not exhaustive, are some examples that will set you on the path to growing your still minuscule venture.
Technology
SMI Association of Malaysia president
Teh Kee Sin acknowledges that technology adoption is often an issue for small companies.
“It’s always a challenge. They see technology adoption more as an
expense rather than an investment. It’s something that they would rather
avoid.
“But adopting technology into your business should not be seen as an immediate expense and rather, a long-term investment.”
Teh admits that one of the biggest nitpicks of small companies is the
inability to secure financing to “move to the next level.”
“Many
small firms complain that financial institutions demand a lot of
unnecessary documents and information that is difficult to be fulfilled.
So they get stuck and are not able to move forward.”
Teh says there needs to be more Government involvement so that support from financial institutions can be improved.
Branding
Branding Association of Malaysia (BAM) president Datuk
Eric Chong says branding is extremely important for business organisations, regardless of the size of the organisation.
“Big and medium-sized businesses usually understand the importance of
branding. They would not be where they are had they not understood and
practised the art of branding along the way.
“Small businesses,
however, usually struggle tremendously in this area. It is a chicken and
egg situation for these small guys - should they make money and
maximise profits first, or invest in their brands from day one?”
Chong adds that what a lot of small and medium-sized enterprise (SME)
operators fail to understand is that branding isn’t just about spending
money on advertising.
“While advertising is an essential part of
branding, it takes much more than just splashing money around if one
wishes to brand something properly. It is just like gardening - you need
to sow the seeds and nurture the plants with consistency. A beautiful
garden reflects the absolute commitment of the gardener; similarly, a
good brand reflects the absolute commitment of the CEO and his team.
“It is about finding the right brand positioning, creating the right
image, building a great brand culture, ensuring superb customer
experience, communicate effectively with the market, etc. So is branding
essential for SMEs? Yes, it lays the foundation and paves the way for a
small entity to, someday, become a respectable player in the market.”
Talents
Leaderonomics chief executive officer
Roshan Thiran notes that for many SMEs, leaders want growth but do not want to invest their time or energy to grow their people.
“This ultimately results in their company not growing either. Every
company, even SMEs, are limited by the growth of their people. So, as
long as your people are not learning and growing, don’t expect your
organisation to grow exponentially either.
“As the business world
changes, even small companies have become more attractive to young
talents. Many start-ups can attract great talents in spite of their
size or funds.”
Roshan says that many youths view working at start-ups more attractive than multinational companies.
“SMEs need to leverage this by their own personal inspirational
leadership. People are attracted to work in an SME not because you pay
well or have a big reputation.
“Instead, it is because of the
leader. A great way to attract talent to your organisation is for the
leaders and the leadership team to develop their own leadership skills.
If you become an inspirational leader, the likelihood of you attracting
talent rises significantly.”
Training
Peoplelogy group founder and chief executive officer
Allen Lee says many small firms first complain that they have “no time” for training.
“Whenever they say they have no time, I always tell them to ‘make time lor.”
The next complaint, says Lee, is “what if I send them for training and they leave?”
“My response to them is always what if you don’t send them for training
and they stay! If this is the case, how could these employees help
small business to improve productivity and efficiency, cost savings and
customer retention, for example? This also means that you will not have a
chance to improve on your sales, cost efficiency, profitability and
even your competitive edge.”
Lee believes most companies spend 60% to 70% of their money on people’s salary.
“And yet, they spend less than 1% of their total budget to develop the
people. And most companies, in fact, spend more time and money on
maintaining their buildings and equipment than they do on maintaining
and developing people.
“If people get results, then it certainly
makes good sense to invest in people. People are an asset to
organisation anyway, regardless if it’s a big or small business.
Diversification
Established in 1974,
PKT Logistics Group Sdn Bhd initially offered only customs brokerage services - but is now providing total logistics services.
PKT group chief executive and managing director Datuk
Michael Tio believes that diversification was they key to how the company transformed itself into the total logistics provider it is today.
“As we started to diversify our services, our revenue grew. So the
first step of growth was to continue to diversify services within the
logistics industry by providing more services.
W started off as a custom agent, then subsequently expanded to freight forwarding, haulage, warehousing and so forth.”
Tio says the next step was to look for foreign partners to grow the business.“We found Japanese and Korean partners.
The Japanese provided us with a cushion during the currency crisis and
the Korean partnership gave us entry into the automotive logistics
sector.”
He adds that PKT started to observe how other multinational logistics companies expanded their revenue.
“We ended up competing with them in the fast moving consumer goods
(FMCG) segment because 60% of the industry, or RM2bil, were controlled
by them.
We had to overcome several challenges in order to
compete with these companies, namely know-how, acquiring new technology,
modern infrastructure and most importantly, moving up the value chain.”
- Contributor: EUGENE MAHALINGAM eugenicz@thestar.com.my