“Let’s work ON the business and not IN the business.
Today competition of SMEs is with big Corporates and MNCs but SMEs don’t have level playing ground. MNCs work in a systematic way and have cash balance strength. MNCs have best practices employed which SMEs lack. Many of the SMEs are family-owned businesses which need to be managed by professionals but currently, they are not.
Today MNCs have grown to unimaginable levels. So what are the Secrets of success which MNCs know but are not available to SMEs? We will discuss 6 such secrets in this Article.
So you really want to get started? Here are the 6 Secrets that have helped big MNCs succeed:
- Improve Sales with Customer Relationship Management (CRM) System:
First things first!
The sales function is the backbone of any organization and the sales process has to be managed in the best way possible.
Use of software save on time and improve efficiency and reduce mistakes. As human interaction reduces, errors tend to be lower. More control rules can be defined and executed.
Sales without service are like putting money into a pocket with a hole in it. Supporting the sales team with the CRM software works best for any organization.
Use of CRM is the foundation for growth.
You can sell more not because you know the product well but because you know your customer well. CRM helps you to observe the patterns and habits of your customers well and sell better. It helps you reduce revenue leakages, leading to more profitability.
- Efficiency and effectiveness through Systems
The essential lesson here is you need to work ON the business and stopped working IN the business.
Systems in form of Flow charts, proper documentation, standardization helps to scale business.
One needs to Delegate but Monitor which is possible if you have strong systems in place.
Systems are most essential to run any business. They are the building blocks of the business. If systems are right, the business can be run on autopilot mode. Systems help in expansion; it ensures consistency and provides clarity. By increasing the efficiency and controlling costs it helps to increase customer satisfaction. It results in increased profitability and it helps to reduce risks in business. With strong systems, the businessman can focus on the core functions of the business.
Internal Controls are an important part of systems. Internal controls help to maintain continuous growth without breaks; it Controls errors and Risks and safeguards the Assets. It helps in reliable financial reporting and also ensures high efficiency.
To share another example, we had worked on the billing system of a company and we reduced the cycle of billing and we could save the interest of lakhs of rupees. It had a tremendous effect on the cash flows of the company.
One needs to follow systems throughout the business lifecycle.
- Get a direction with Business plans and right KPIs
Many entrepreneurs are busy working on day to day routine things and they need to have a strategy, they need to know their market positioning. They need to have a 5 years Business Plan.
One big question is how do we measure success? One needs to have the strong Key Performance Indicators (KPI) system. Measure critical aspects of your business which is essential for the success of your business. Every department, function of business has various KPIs. It gives a clear understanding of the way of assessing performance. It is the consensus of all parties concerned on what is important. It provides clear direction for action. KPIs improve when they are monitored regularly. There are various software tools available which help to define, analyze KPIs. Please understand that WHAT GETS MEASURED – GETS DONE! KPIs should be SMART, i.e. Specific, Measurable, Attainable, Relevant, and Time-bound.
- Control Finances with Budgets
A businessman needs to be absolutely clear about what they want. Where do they stand in business?
One has to begin with one’s values. What do you really care about? What is your mission for your business? You need to have a clear vision. Between you and your goal, there will always be constraints. One needs to curb the impulse to spend on things which are not budgeted.
Business owners tend to get influence with current fads and end up incurring expenses in areas which were not relevant for business growth. At such time budgets come in handy which keep you online with your objective and planned expenses.
Cost control measures
Every business needs to save unnecessary costs. Every business needs to be disciplined with their money. Every rupee saved is rupee earned. Most of the businesses fail due to financial issues as they can’t handle cash flows. They fail to earn profits even after a few years into the business.
Cost cutting has to be attempted strategically and with proper thinking and plans. It should not be in a haphazard manner which will affect business in the long run. Top management should be involved in costs-cutting. To make it successful, even incentives may be given away. Accountability should be created for cost cutting function and targets should be set.
Engaging employees and taking suggestions from them is the best idea as motivation to cut costs is ensured and chances of successful implementation are more in such cases.
Each expense may be considered in detail about what it really contributes to the business, whether or not it is furthering the business.
- Importance of Regular Internal Audits
Internal Audits are compulsory for listed companies. Importance of Internal audit cannot be undermined. Internal audit helps in Quality control, to increase productivity, it gives Confidence to stakeholders. It unearths frauds, helps in Cost control management and Achievement of business objectives. Internal auditors need to be an expert in the industry so that he can add real value.
- Manage Business Risks
A businessman can have peace of mind by identifying the risks in their business and mitigating them in a systematic way. A strong Risks management is very essential.
In the end, it’s very important that SMEs need to have businesses on autopilot mode. They need to create a second line of management. They should focus on the area of growth.
The only real secret is that its action, not knowledge, that fosters true success. No matter who you are or what you are trying to do as an entrepreneur you can find success by inculcating these secrets.
Maybe you are great at ideas but bad at implementation, so you have to take care of it.
Which of these success secrets will you act on today? Please write to us if you have any comments or queries.
About the Author
CA Jayant Kadge, Founder and CEO, Biz Brains Systems, Experts in Internal Audits
As Internal Auditors and Consultants for Business Growth, he has been worked with hundreds of SMEs, Start-ups and also some listed companies in the past fourteen years. He is responsible for managing the firm, formulating and executing long-term strategies, and interacting with clients, employees.
