SMEs make up for the majority of businesses in Malaysia. However, there are various challenges which hinders their growth and contribution in the country. Here are several reasons
Starting a business requires extensive research on the particular industry you’re going into. There are various factors to consider when taking this leap, such as “How saturated is the current market?”, “What are the spending behaviour of your potential customers?”, and “What key features are most important in acquiring & retaining customers?”. Having an understanding of the environment allows a business owner to strategise their approach in terms of product positioning, target segments and value. Ultimately growing market share and profits.
Understanding which areas in the organisation needs more resources is key when it comes to growing your business. Although some expenditures are unforeseen, the planning helps in removing most of the unnecessary spending. Hence, allowing more resources to be allocated to other priorities. Failure to do so often leads to poor cash flow and may cause a financial debt to the business.
Financial problems are often the root problems a business can have. With the help of technology, there are a number of alternatives available to an SME when it comes to financing. Researching and knowing what is in the market may be useful when it is needed.
The biggest misconception about running a business is the ability to generate profits immediately. When things do not work out as planned, often times many businesses venture into activities that might not be sustainable in the long run, such as pushing for sales but not serving existing clients. Hence, failing to attract new customers and losing loyal ones.
No surprise for a business to sow rewards quickly. This is where the sustainability of a business is then overlooked. It takes time to built a successful business. After all, Rome was not built in a single day. Taking it slow and setting a good foundation for your business is important to sustain in the long run.
Growth, obtained by many but kept by a few. This is no surprise as most SMEs concentrate on increasing profits and reducing cost. More often than not, SMEs underestimate their capacity which leads to a lack of support system resulting in high dissatisfaction rate among customers. Understanding and planning according to your organisation’s capacity and capabilities are essential to achieve sustainable growth.
Embracing change is often uncomfortable but necessary. Most SMEs fall into a trap of being too comfortable in their current space where they neglect potential threats or even opportunities for their products or services. In the age of technology, there are unconventional solutions that are able to help small businesses. Accepting and adapting to these changes can help SMEs to stay ahead in the market. Those that do not jump in the bandwagon will soon find themselves losing sales, market share and spending a lot of resources. Being open-minded and learning continuously