An SME Guide – Three things you should do to survive the slowdown.
One of the great benefits of being an SME is having the ability to react quickly. If you are the entrepreneur driver, you are undoubtedly plugged into your market, can see the twists and turns that are coming towards you and can react and thrive, whereas the bigger juggernauts cannot!
Some 30 years ago, a leading management consultant commented on the impact that the internet would have on business (yes that’s right, the internet has not always been there!), and he said, “You will be competing with the best in the world, in your own backyard!” And that has been the world you have lived in ever since. You need to be nimble and bright to survive, and you have!
1. Let’s first think about supply chain disruption. It has happened before, it is happening now, it will happen again.
Back in 2011, Ford production stopped because floods in Thailand impacted one of Fords second tier suppliers. Ford first became aware when parts failed to arrive. They didn’t know enough about their supply chain! Nowadays they do. All the majors understand the risks in their supply chain and have mitigation plans for disruption. They audit their supply chain, vet it, approve it and monitor performance keenly.
Not so easy for you, the SME, but a good place to start would be at least to understand your supply chain. Do you know who your supplier’s suppliers are? Do you know where your supplier’s suppliers are? Don’t you think you should?
2. Apart from spending some of this slowdown time in analyzing (and hopefully improving) your supply chain, another thing to watch is a change that has been creeping along for a year or two, and that is the move from B2B (business to business) and B2C (business to consumer) to B2B2C, i.e. how do you interact with your end-user customers?
If you are in B2B, you probably don’t know your end user customer or consumer, and indeed you might not want to if you have a great distribution network selling your products for you. There is a growing trend for customers to try to jump straight to the source of the product, and if you are the manufacturer, that is you. Why? Because you have all the domain experience, you know all the planned developments and you have all the answers! So how should you react. Well, provided you respect and preserve your distributors, then the increased brand awareness is good for both of you. So please do promote yourselves and build your brand on the consumers eyes; just make sure the orders generated flow through your established, valued and successful distribution channel and it’s a win win for all.
3. The third thing you should consider is conducting a business process review, while you have down time.
Sit down in your conference room/dining room (probably the same thing at present) and call a ZOOM meeting with the key people in your business.
Notice I said ‘key people’ in your business. I did NOT say ‘management team’, because for this vital/business changing exercise you need people in the meeting who truly know what is going on the business at the grass roots. So, having Pete from Personnel there is expected, having Mary from the warehouse will be much more valuable, as she truly knows what is going on.
To conduct a business process review, you need flip chart paper, flip chart pens, sellotape, and probably permission from your partner to stick things on the walls.
Then using your Zoom conference, with your team, you follow an order through the system, in detail, not missing any point!
It might start with an enquiry, that becomes an estimate, that becomes and order, etc.
Map on your flip chart paper every bit of information flow, every bit of paper, every spreadsheet entry, and stick them up on the ONE SIDE of the conference/dining room wall with sellotape (hopefully removable or another downtime task might include involuntary redecoration).
As you do this, I promise that you will be astonished at what you find: “We send a blue copy to finance, why on earth do we do that?” or “If we advised ‘dispatch’ as we received the order, goods would be ready for shipment 2 days earlier, and we could invoice earlier”.
At the end of the exercise you will have mapped your ‘as now’ business processes, messy as they are!
Then you, as the boss, will ask the killer question, “If we could start again, would we do it this way?”
Then, on the other conference/dining room wall, model your dream business, from start to finish, as good as you can envisage it. These are your ‘go to’ processes.
Implement these changes over the quiet time, and this will transform your business from GOOD to GREAT.
And because the key people in your business have been party to building it, they will be empowered and motivated to deliver it. Why? Because you have made it THEIR IDEA!
So, in summary 3 ideas to improve your business during the Lock Down:
1. Look at your supply chain. Do you fully understand it? Can it be de-risked/improved?
2. Look at how you service your customers. Are you a B2B who would benefit from greater access to the end customer/consumer?
3. If you want a catalyst for change – conduct a Dining Room Business Process Review. You might choose to change nothing, but by involving your key people in the discussion, they will be massively empowered and motivated as a result.
Andy Makeham has enjoyed a lifetime in software ‘business development’, as a programmer, implementor and entrepreneur. He has grown, bought and sold many business software companies and floated one on the public markets. He has worked with private and ‘private equity’ owners. Today Andy acts as a business development advisor to the software sector. In that capacity he is working with SOS Inventory.