What Is an SMB?
Small and Medium-Sized Businesses, otherwise known as SMBs, have faced several challenges in the past few years. In such challenging circumstances, business owners often do not have time to plan but instead turn to professional consultants for advice on marketing strategies, growth plans, market entry, customer reach, and more. With such a critical need for expertise, what does an SMB need from a marketing strategy?
One challenge SMBs face is finding a partner who will provide the resources needed to leverage the company’s strengths and minimize its weaknesses.
While SMBs may have extensive technology, knowledge of the brand name, and high-value products and services, compared to large enterprises (also called ‘Fortune 500’), they are still feeble in one area: understanding and leveraging their value brands and intellectual property. This is the reason why only a tiny proportion of SMBs have been able to raise capital through venture capital and/or angel investors. The other challenge in SMB for capital raises is in raising enough capital to keep the lights on, especially given the dearth of high-tech equipment and skilled labor at SMBs.
Another challenge for SMBs is identifying strategic opportunities in the market where they can develop their expertise and capture market share. The most significant barrier for SMBs is the perception that growth and investment in human capital and technology are risky. SMBs should develop a growth strategy based on the assumption that enterprise customers continue to invest in products and services that remain competitively relevant and of high value. Most SMBs have annual revenue of less than $10 million; many mid-size enterprises have revenues under this figure, and many have net profit margins lower than the industry average.
SMBs should also understand that it is easier to make money in small numbers than in large numbers. As an SMB, you cannot afford to have your expenses double or triple in size overnight because of extreme financial risk. Instead, focus on developing the right marketing strategy and finding the right partners to partner with so that your sales team has a streamlined sales process. Leverage scale to your advantage. SMBs should look for opportunities where they can apply their technological expertise to solve business problems.
SMBs should identify three main points which cause them major cost and time disadvantage relative to larger enterprises: overheads, skills, and expertise. The highest and most obvious cost and time advantage in terms of workloads are due to the size of the enterprise, which typically requires more personnel and more infrastructure. SMBs can reduce these costs by streamlining processes and adopting lean manufacturing principles – these principles lead to high cost and time savings, even when employing additional personnel. The biggest and most apparent pain point is cost, which SMBs can overcome through automation, better data modeling, and leveraging the enterprise’s in-house talent.
SMBs should not think that they are beyond reach and don’t need to worry about a recession. While there was definitely a recession in the SME sector at the start of the last decade, there are no signs of this slowing down, especially with the advent of cloud computing, smartphone usage, and social media apps. At the same time, organizations realize that a recession does not have to mean mass layoffs and a permanent loss of consumer confidence. Instead, SMBs should focus on making the most of the opportunities that are available to them in order to retain and attract enterprise customers.
If you’re going to succeed as an SMB, you should focus on being agile and flexible. SMBs should focus on developing tools that can help them to easily respond to the ever-changing landscape of enterprise marketing. SMBs should leverage the strengths of their portfolio and work closely with the major players in the B2B space. This will help them to ensure that they remain at the forefront of B2B consumer trends. SMBs should also leverage the value of their own R&D lab to spur innovations within their businesses.
The strategy that an SMB should adopt today is one that will work to improve its global footprint and at the same time enable it to achieve specific business goals. SMBs should not wait for an economic downturn before implementing a robust marketing strategy, especially in areas such as customer-facing marketing, data and analytics, social media marketing, and online advertising strategies. In fact, the first thing any SME should do is carry out comprehensive market analysis and develop a comprehensive marketing strategy. This approach will help the SMB to determine what steps it can take to ensure that it continues to make significant headway into the ever-changing consumer market.