For UAE’s SMEs, it’s a time to get rolling

Will 2015 be billed as the year of SMEs (small and medium enterprises)?

Somebody once said that you cannot do today’s job by adopting yesterday’s methods to be in business tomorrow. I am sure the person was referring to innovation and adapting to change constantly taking place around each and every industry sector.

Constant innovation therefore is necessary to stay ahead in the corporate race and it is the case irrespective of the industry sector. The same rule applies to SMEs as well. SMEs drive economic growth by stimulating innovation, acting as a competitive edge to existing businesses and make a large contribution to job creation.

Recently, while in India, I saw a new development with regard to raising financing opportunities within the SME sector. A portal called SMEcorner.com is a free online platform that enables SMEs to access loans easily from banks and other financial institutions. The online marketplace provides SMEs with an easier, faster and more efficient access to resources that can help them innovate, grow, expand or finance a project.

This unified platform combined with a robust network of banks assists businesses in fulfilling their funding requirements. Now that is a brilliant idea where everything is being streamlined on one platform and the financial institutions are not working in isolation. Such novel ideas can be introduced in this market as well based on our industry’s requirement.

Formulate a growth strategy for 2015

SMEs have shown great resilience in the face of challenging economic conditions in recent years. There are SMEs that are conducting business out of necessity, but there is also a high increase in UAE-based start-ups that are opportunity driven. It is crucial we make best use of the potential of these businesses in 2015 and further support the economy.

It is widely accepted that SMEs don’t have a standard formula for business development as their growth is complex and, typically, sporadic. Periods of high growth can occur at any point in the life cycle of the firm.

The challenges and drivers of success will vary from business to business and cannot easily be predicted by business characteristics such as size, age of the organisation or sector. It needs to be prepared and backup strategies must be in place for external market emergencies such as falling oil prices or plummeting global stock markets. A concrete strategy will always ensure that the organisation is in good stead and scale new heights.

SME employers looking to grow in 2015 can also achieve growth by improving the skills of their employees. Employers experiencing skills and knowledge gaps — i.e., where employees are not fully proficient in their role — should be provided the right training at the beginning of the calendar year.

Many SMEs in the emerging markets and developing countries pursue a cookie-cutter strategy that implies a clear limitation to growth. The typical case is an SME that offers standardised products and services on a local or regional market. For instance, these could be in the retail or restaurant sector. In a majority of such cases, the business strategy chosen by the owner revolves around a local market niche large enough to satisfy their own income expectations.

Growth beyond this level would mean a radical transformation in the basic strategy of the SME and also incorporate changes in the business objectives. It implies a fundamental reorganisation of the company’ structure in all areas, whether it is production, marketing or customer service.

SMEs need to go beyond boundaries and set an example for others to follow. The best example that comes to my mind is Just Falafel, a Dubai SME that today has a presence in several countries. It’s important to be different and create your own niche in the market to stay ahead.

Go back to basics: SME resolution for the New Year

When a player loses his touch, the coach advises him to go back to the basics and focus on core fundamentals. Sometimes the focus is lost and the whole company is functioning like a machine and in an auto mode.

One should take a step back and analyse the progress made and incorporate corrections wherever necessary. The Year 2015 will come with loads of opportunities for the SME sector — capitalise on it.

The writer is the Managing Director at Dulsco LLC.