There is no doubt that small and medium scale enterprises(SMEs) are top contributors of GDP and provider of employment, particularly in the developing economies. SMEs are part of the responses to development in most developing countries and have proven to play major roles of development in both developing & developed worlds. But, it is reported that 6 out of 10 businesses in developing countries like India fail in the first year and close down before they step into the next year. Whereas, it is seen that only 1 out of 10 businesses fail in developed countries. So, why do some fail, while some make so many profits that will eventually lead to business expansion? This is what this article is all about!
There are reasons to fail and there are reasons why some SMEs are successful. Some of the common & terrible mistakes SMEs make are as follows:
On the other hand, SMEs in developed countries do better than the ones in developing countries in terms of sales, profit, growth, etc. The top 10 countries that have got the best running SMEs in 2019 are Denmark, Hong Kong, New Zealand, Ireland, Sweden, Canada, Norway, Singapore, Switzerland, and Finland. These countries are better than others when it comes to starting and running a business according to Forbes.
Let’s look at what measures each of these countries taken to be at the top 10 places for ease of business.
The government has made it easy to start up new businesses. Denmark is considered as one of the world’s most entrepreneurial countries.
Belonging to China, Hong Kong has the least tax burden on businesses that one can think of. The money saved can be invested in working capital that helps in more sales and hence profit.
Known for its free-market economy. The county is heavily industrialized that gives them a global competitive advantage.
This country ranks at the top for freedom, and has a relatively low tax burden on businesses.
This country has a highly skilled labor force makes the best place for doing business.
The land is mostly urban and industrial–and with great personal freedom and negligible red tape–Canada ranks high in ease of doing business.
With a strong tech sector along with a strong social safety net for its citizens, making business easier to establish.
Singapore is a free-market economy, and its Govt is notably free of corruption.
Switzerland has a high per-capita GDP. It is also famous for its stable government, its highly skilled workforce, and strong service industries.
Finland has a highly skilled workforce and is considered as an innovative country, a strong manufacturing base, and a flood of technology exports.
These 10 top developed countries have taken a huge step in building a better future by encouraging their SME segment. Measures are taken in terms of lowering the tax burden, providing high skilled labor force & corruption-free environment. Their Free market economy makes it easier for SMEs to buy and sell better giving them all the personal freedom to perform at their best and make maximum profits.
It is true that the government in these developed countries makes it easy to start up new businesses. But for the business to be up and running successfully for a longer duration, it is not just about the country they operate in that matters, the reasons for their success are many!
Do you know what gives SMEs in developed countries a competitive advantage? Their technology forward! They rely on technology to communicate with their customers. Whether it is about new deals and discounts, transaction messages, or just the bill details, everything is digitalized. They are paperless and more efficient and instant. They serve customers better and on time with the help of modern tools and software. Digitizing improves working conditions and customer experience.
Tracking inventory, creating bills, payment collection happens digitally using Billing App. They use software that’ll help them monitor their business even while they’re away from their office/store. They monitor their sales, staff, stocks right from their smartphones, that’s how smart they are!
With tech at their fingertips, they automate business processes wherever possible, and with this comes efficiency and productivity. Cool, isn’t it?
The market is all about risk and instability. It is quite important to keep a watch on evolving trends. A lot is changing every day: people are changing, their likes and dislikes change, the economic condition of the market changes. A small change in the trend can make or break your business.
SMEs in developed countries know this, they always keep themselves competent under current trading conditions. They always keep an eye on the changing trends. They keep a watch on what’s Happening Now & What Will Happen Tomorrow. This trait is helping them make improvements in their business and get better business ideas.
Quality is what differentiates you in a crowded market. Regardless of what business you’re involved in, your customers aren’t going to choose you solely based on price, but often on quality. If you fail to meet customers’ expectations, they will quickly look for alternatives. They might even go to the extent of giving negative reviews on your products and services on the internet. This is the worst thing that could happen to any business as it reduces the business’s reputation.
That’s why we see SMEs of developed countries concerned about the quality of their products and services. No matter what, they don’t compromise on quality. They believe that’s the only way to build trust with customers, that’s how they keep coming back. They try their best to come up with good quality products/services no matter what.
Everybody likes to be treated well, your customers are no exception. Successful SMEs never let their customers down. They provide top-notch customer service. They ensure customer satisfaction. Because, when customers are happy, they become your loyal customers and continue to buy from you. It is found that 6 out of 10 happy customers refer their friends and family to your business. It becomes a chain reaction.
This is one of the traditional marketing methods that is applicable even now and forever. Also, Customers are willing to pay more to companies that offer better customer service.
Most of the SMEs in developed countries have Clean business records set up by their accounting software. Not because they fear Govt. They believe, having records organized helps them track bills, cash-in-hand, payments, taxes, and working costs. This is critical for any business owner who wants to grow. Not just that, it also helps you to,
This is why it’s very important to keep good accounting records. This is what successful businesses do.
Successful SMEs constantly promote their business. That the way to sell more of their products/services and attract new customers.
Advertising your business will help you in many different ways:
Here are the ways to do it
If you don’t do everything you can to promote your online shop, who will? So, want to sustain in the competition? One of the things to do is to promote your business consistently.
Successful businesses use money wisely. They invest in growth, they buy the right tools to improve business efficiency, to be at the right place, to buy items that are fast-selling. They also invest in hiring staff to handover routine tasks to free up their time and conserve their energy.
SMEs in developed countries put their money into advertising their brand. The more popular the company is, the more money it will make in the future. They invest in Anything that contributes to the growth and improvement of your company. Anyhow, investing in business looks different for every business owner and it can change over time. The key is using your money to improve the source of your income.
Here’s what Indian SMEs who wish to succeed should be doing
Introduction: A New Approach to Debt Repayment Paying off debt can often feel like a…
Nowadays, prioritizing self-care has turned out to be more essential than ever. Amidst the chaos…
Test-taking is a fundamental aspect of a school student's life in Australia. From NAPLAN to…
Experiencing a lockout can be a stressful ordeal, whether it’s from your home, car, or…
A crucial aspect of harnessing real-time insights is leveraging integration between essential business tools, such…
AI image generation is one of the fastest-growing fields in artificial intelligence. In South Korea,…