SMMEs must realise that it is not enough to only have good products, decent pricing and satisfactory customer services, because their competitors can often offer the same services. Business coach and SME investor Pavlo Phitidis told a recent SMME Business Forum webinar that the success of a business was dependent on it knowing its customers, solving problems using its products or services, and constantly learning.
The webinar focused on how SMMEs could build their businesses into assets that generated wealth. Phitidis said that there were several factors that ensured a business thrived. These included positioning, creating systems that worked and having a solid team that contributed to a company’s success. “If your business has a good product, your competitors will also have a good product because if they don’t, they won’t survive. If you say your price sets you apart, then your competitors can also have a good price,” he said.
“What is important is how you position your business in a competitive market, how you create a system that can make it happen, how you get the right team on board in order to grow the business and what you need to do to lock in the value of the business.” Phitidis, who is the co-founder and CEO of Aurik, a company that works with medium-sized businesses based in Southern Africa, Germany, the United Kingdom and the United States, said that enterprises should focus on two strategies.
They should either scale their businesses so they could be profitable enough to be sold or grow and dominate a sector locally or internationally. “We should be looking at the decade beginning in 2020 by saying that the first two years of that decade were tough, but in the next eight years (the business owner) will choose to build, grow and dominate the business, and how to do that,” he advised.
Phitidis said that 88% of the 10,000 medium-sized companies that Aurik surveyed, expressed a desire to grow. “What confused me is that 12% didn’t want to grow, and it was because they didn’t have a growth-minded outcome and thought that what they had was enough,” he said. “We also discovered that 14.7% of these companies spend an hour a month talking about growth, and 95.2% of their employees are unaware that the company wanted to grow.
“When taking a deeper dive, 68.4% were misaligned with functions that make business happen including marketing to generate leads, sales to get customers on board, operations to deliver on… promises, procurement and people and financial management,” he also said. Phitidis said that a question that emerged from this data was how a business could provide a constant and reliable experience for its clientele.
“This comes from commercial functions in business… sales to generate leads, operations to fulfill customers’ needs, administrating how to create experiences for customers, procurement and people and money systems.” He warned that if these functions were not organised into a single interlinked set of activities that followed on from each other, it meant they were working in silos and the knock-on effect was chaotic operations.
“… and if the operations are chaotic, then you can never promise a consistently reliable experience for your customers,” Phitidis said.