SMEs - tips for the strategy process

SMEs are generally terrible at planning. I use an example with my students. Would you leave work, go home, pack whatever clothes are in the cupboard, take whatever cash is in your pocket, get in your car, drive until you run out of petrol, and then have a holiday wherever you run out of petrol. The answer is always no. And yet most SME owners run their businesses in this way.

They simply arrive each day in the hope of sales arriving. There is no plan. No strategy. No direction. There is simply ever-fading hope.

You need to read as widely as possible in order to ensure your strategy is informed by your environment. A PESTEL analysis is not a once-off annual event, but rather a way of life. It is about knowing and understanding what is happening at all times. How often do you hear businesses who are in trouble state "I just did not see it coming. Suddenly ....". Remember nothing is "suddenly". It is always announced in advance. Even the current global financial crisis was being talked about in advance.

So read a book or two on strategy. Gary Hamel is a strategy author who can give you some good tips and insights.

Read, read, read!

SMEs - becoming opprotunity aware

SMEs generally survive big business, simply because they find niche markets, or because they are innnovative. Research shows that innovation is generally driven by SMEs. So how do you become innovative? Is innovation about coming up with creative ideas? Not really!

First off you have to know what is going on in the market place. So to do that you need to read, and obviously if you already trade within the industry, it is a lot easier to know what is going on in the industry. Often reading customer complaints in trade journals and other magzines, as well as internet websites that are specific to the industry, often provide an insight into customer needs. Never lose sight of the fact that innovation is generally driven by customer dissatisfaction.You need to read very widely. not only to find problems, but also to find solutions.

Remember that much innovation comes from other industries. A good example is Dell and Amazon. Dell sarted selling stuff locally in the USA using telesales and then moved to selling internationally on the internet. Amazon thought, if they can sell computers, why can we not sell books? Two very different markets - one solution! So get reading and find your next big opportunity!

SMEs - does it help to read

I am an avid reader of books, magazines, websites, blogs, you name it. I have now added a book list on my blog. No I do not believe everything I read, and most often you might walk away from a book with only one or two thoughts.

But they are very important thoughts more often than not.Gerber's e-Myth has so far given me two thoughts.

Firstly there is the importance of starting businesses to sell them.

Secondly there is the importance of good systems. It was the second one that gave me a wake up call. A friend of mine who I do not see often enough, will invariably tell me how, many decades ago, he was always so impressed with how well I ran my systems, and I have been his role model ever since.Gerber made me realise that I have grown cocky with time, and I rely less on systems than I used to. In other words I have become sloppy.

Gerber gave me a timely wake up call. I have already started getting my systems in place. How good are your systems?And that is why I love to read. Reading alerts me to what I am doing wrong. I normally know what I am doing wrong, but often only subconsciously. Reading makes it conscious thought, and that leads to improvement.

Rob Smorfitt