“The journey of a thousand miles begins with a single step”, said Lao Tzu, a philosopher from Ancient China. He did so around the 6th century BC, but this profound statement has withstood centuries, and I am sure, many of us apply this thought in our daily lives.
I would like to apply the same approach to the SME sector. Look at corporate giants like Microsoft and Facebook. They had humble beginnings and this highlights the fact that small businesses can evolve without having robust assets and grow into large businesses.
All large multinationals were once SMEs. This journey from being a start-up to being an SME is the most challenging phase for any organisation.
The SME ecosystem in the country is currently witnessing exponential growth. Several people are joining the sector, including many UAE nationals who have shown a considerable amount of interest in becoming self-employed and have set up their own entities.
This enthusiasm will surely grow further. Setting up of the Business Village was another great step in the right direction for Dubai’s SME sector. With engaging investment propositions and government’s support, prospective entrepreneurs will feel more assured and willing to take risks and take the industry to another level.
It is estimated that there are approximately over 200,000 SMEs in the UAE that accounts for a significant per cent of private-sector employment. Another definite boost to SMEs in the UAE is the flood of business opportunities that Expo 2020 is going to usher in.
This exponential growth in the SME sector over the years will help steer UAE’s economy far ahead.
In a developed economy, the key drivers of economic growth are SMEs which usher in employment and prosperity. A thriving SME sector is a positive indication that self-employment is gaining acceptability and is sustaining.
There is ample scope for SMEs to diversify into more profitable sectors and thereby set up a trend in creating more jobs and wealth in the coming years.
The Dubai Chamber Sustainability Network — a business-driven, action-oriented network for CSR and sustainability — has initiated a campaign to raise awareness on CSR and its benefits among SMEs.
As part of the initiative, the task group will also look at developing and disseminating user-friendly, tailor-made tools for SMEs to facilitate the adaptation of CSR practices.
A small enterprise has a great potential to transform itself into one of those large successful corporations provided you are able to manage your business intelligently while also anticipating your expansion needs. An SME’s long term health and viability depends completely on its ability to adopt the right technology, maintain employees with the right skills, knowledge, capabilities and attitude to support its envisioned growth.
Motivated and highly skilled employees surely equate to a superior company performance.
Determining your company’s path to growth requires you to visualise where your company is headed five years from now. Do you foresee your business landscape evolving and do these changes bring growth and market expansion opportunities?
If “yes”, then you need to conduct an in-depth analysis with regard to the changes that your company will go through over the long term. It is very important to identify how the company can benefit from these changes.
This analysis will help you determine the resources you will need for the future and align your business as per the market conditions.
Outsourcing surely does bridge the gap between small and large firms. The key challenge in comparison to the larger cousins is the limited resource availability.
By adopting outsourcing, SMEs become competitive and are able to compete effectively with the larger enterprises. Outsourcing can be a game-changer for SMEs who can match their strength and walk at par with larger enterprises.
Outsourcing does come with its own share of risks. SMEs need to take stock of the risk factors before outsourcing the responsibility.
But the critical first step is to choose the right partner. SMEs need to look at the credentials of the potential outsourcing partner and then take the leap of faith. SMEs considering outsourcing need to evaluate their partner’s core competencies, ensure that proper agreements are signed and projects implemented as per schedule.
Therefore, outsourcing with the right partner can put SMEs in the company of many world-class businesses. A business-focused outsourcing partner will support strategic introductions that may evolve into new business relationships in the future.
Outsourcing is the next step to increase productivity in a given short span of time as it boosts international competitiveness. This definitely serves as a great business advantage for SMEs to curb costs, free up limited resources and focus on the customer.
Take some of these strategic first steps and — you are half way there.
The writer is the Managing Director at Dulsco LLC.