They recently analysed the characteristics of 291 West Midland SMEs in the two years before the Covid-19 pandemic and uncovered a variety of barriers to SME growth and performance in the region. The CEIG report no.2 details their findings.
Their report highlights seven key messages that are particularly important for regional SME leaders in steering their business to greater success.
Dr Yoruk and Visiting Professor Prof Gilman provide their insights on how SMEs can implement this advice in their business planning and processes below:
1. Aspiring to grow isn’t the same as planning for it
All businesses aspire to grow in some form. But we found through the business analysis research that while aiming to grow was popular amongst West Midlands businesses- their plans, processes and habits didn’t always reflect that.
Our report showed that structured reflection, time dedicated to learning, consistent planning and focus on strategy were all key practices that were missing from many small businesses and even where businesses had them, they were not always linked to their aspirations.
Businesses need to ensure they’ve built this time in and connect this activity to their aspirations to truly make a difference.
2. Don’t rely on solely your own abilities
We’re not all perfect, and in fact getting support from others isn’t a weakness, it’s a strength – and a key element of successful strategic management.
The findings found that a general lack of understanding of this led many to place a heavy reliance on managing the business on their own, rather than involving those with certain expertise to support.
3. Having a business plan doesn’t mean you have a strategy
The business strategy focuses on strategic planning and implementation not only around your markets but also around your resources, networks, technology and innovation activities. Our findings indicate that businesses that have a written strategy grow rapidly as they set the direction they want their business to go.
Don’t keep your business strategy to yourself. The sooner you share it with your employees the more they can get involved in the process of implementing, and even helping to improve your business strategy. That way you will ensure that your plans and goals are followed through good management.
4. Value short-term and long-term focus equally
It’s important to ensure you have short-term goals to drive marketing and sales. However, high growth is more likely to come through long-term approaches. We found that growing businesses engage in value-creating relationships with both customers and suppliers, creating a value chain rather than a supply chain.
We also found that an internal focus on strategic investments in purposeful technology use and human resources practices ensures that the quality and wellbeing of employees allows for skills and resource development necessary for business growth in the long term.
5. Complement your differentiation strategy with the right cost-leadership approach
Many regional businesses focus on making a profit through reduced operational costs while delivering high quality products or services in their market. Our findings show that growing businesses also pursue product or service differentiation strategies in tandem with cost leadership.
However, we found that in growing businesses, cost leadership manifests more through process innovation and wider technology use to stimulate achieving higher productivity than through a focus on tightening belts.
6. Turn your employees into a competitive advantage
Our report findings show that making the most of your employees is an area that regional SMEs could improve upon. Growth is more likely when employees become a source of competitive advantage, which in turn helps overcome issues with your business productivity.
Currently, SMEs are less likely to communicate their strategies with their employees, to invest in hiring qualified skilled employees and in training their existing employees. There is free support available to help with this.
7. Seek advice strategically
Getting help and support is seen as a sign of a strong business, but seeking advice strategically is what separates growing West Midlands SMEs from those less so.
To do this most effectively SMES should be thinking about how they operationalise the information they receive and build this into their existing business strategy.
Looking to get greater insight into your own business?
Complete our business analysis survey today!
The Sustainable Business Growth Research Cluster in the Centre for Enterprise, Innovation and Growth is continuing to conduct research into understanding the minds and challenges of regional SMEs to help support their business growth.
The Centre has a business analysis survey that provides insight into your individual business performance. Play your part by completing the 20-30 minutes survey linked here.
From this, you’ll get a personalised report and a comprehensive review of your business with a BCU academic taking you through the growth opportunities your business can seize today. All support is subsidised and part-funded by the European Regional Development Fund through the GBSLEP Enterprise programme.
Need support and assistance to complete the diagnostic or want to find out more? Click on our link below: