Small/medium Business owner, how to Compete with Startups

October 23, 2016

small business compete

If you are small medium business owner, and you seem to have hit a road block, and you have to compete with large organisations and startups, then read on.

You started a business or inherited one. You want to take it to the next level or just compete against the competition. You had a huge growth, mostly chaotic. You kept on adding things or doing things to improve your business. Now you are pushing the accelerator hard but the company is still not accelerating. It seems something is stopping your company. If you look closely, the company will be a reflection of you. It may be a mess, or a well-oiled machine, depends how you are.

Startups have the advantage that their promoters are good at computers and IT. They don’t face the problems immediately. Also, they get enthusiastic and motivated people easily, and everything works out initially.

So, if you are a small/medium scale business owner, you may be facing these problems.

1.Funding/ Working capital management– Many businesses fail because they don’t manage their working capital properly. Employees don’t get salaries on time, they leave and affects the business further. Everyone knows this, and still we see businesses fail. There are easy to use software to manage this, but how many of you know about it? To get funding for small/medium scale is a problem

2. HR/IR– Doesn’t exist. It is mostly reactive, and normally operations handle people functions. It will be very difficult to attract good people and keep them.

3. Payroll– You will be lucky if you get a decent pay slip. It is either outsourced, or done by a basic payroll software.

4. IT and communications– As with all other departments, hard to get good people and keep them. There will be no IT policy, computers may be of different make, online security will be non-existent.

5. Marketing/Sales– It will be person dependent, and you will be losing a lot of clients because of your poorly developed website or lagging behind in adapting to fast changing digital world. CRM may not be there, or poorly implemented. It will be hard for your customer to reach you, if he loses your phone number. Preparation of quotations and other such commercial activities may be inefficient and may waste a lot of employee’s time.

6. Finance– This may be properly managed, as the final profit or loss figure is what matters to you. You may have a loyal and dependent accountant who you trust. ERP if any will be poorly implemented or not properly used.

7. Projects– You don’t follow any project management methodology. Excel may be used by only few enthusiastic employees who you hired recently.

8.Operations/Services– Will be operations person dependent, or customer dependent. It will be reactive, and lot of issues will keep getting escalated. Processes will be hard to find, and not documented. Technical people may do well, but are limited to the experience they gain.

9. Admin– There will be a dependent person who will manage all day to day work, and he will do all work as he thinks best.

10. Training– Mostly on job training. No planning or monitoring.

11. Analytics – No Data available, or hard to find and consolidate. Analytics possible?

12. Strategy– There is only one person making the strategy. You can go only as far as you can see.

What you can do about it?

1. Hire a consultant? There are not many available for small/medium scale businesses.

2. Hire good people? They may be difficult to find and even difficult to keep. Giving them a reason to stay invested in your firm may work.

3. Do it yourself, step by Step- Focus on one problem at a time and solve them on your own. There are lot of resources and companies available (may be small themselves) who cater to small businesses. It will take up lot of your time, but you have to do it, if you want to cross the line. Also, it will be difficult for you to be good at everything.

4. Follow a proven methodology – Six sigma, prince2, PMP, kaizen etc. have been proven around the world. Find what is good for your business, and tailor to your needs.

It amazes me that even after so many problems, companies achieve such high growth. But mostly are in the service domain, and there is such a big market available, that there is something you can always pounce upon.

If you want to increase the life of your business, you need to continuously monitor your business, maintain and get better. Also, there are other porter’s forces you have to worry about.


Strategy Boffins Team

Strategy Boffins is building India's own strategic intelligence platform.


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