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Time to back to basics for SMEs
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Bikky Khosla | 02 Aug, 2011
There is a lot of talk about inflation and interest rates these days. Businesses have been reeling under rising costs for quite sometime now, and worse than that, economic indicators are signalling tougher times ahead, of which corporate profit will certainly be the punching bag again.
With challenges ahead, I feel that it is the right time for the small and medium enterprise (SME) community to go back to basics -- including profiling of customers, marketing strategies, budget and cash flow management, and advertising and promotional activities.
Most SMEs fail to define their "target market" clearly, especially while narrowing the target segment. Often they persuade themselves to think that appealing the widest possible customer base would garner the best results. Marketing and promotional mixes are designed accordingly, and as a result, success is hardly met.
So, what does a small business require to do to make marketing more effective?
First and foremost, finding your niche is all-important. It involves selecting a market segment, which you can serve better than your market competitors. A good database of your customers with their details including their purchase history can be very helpful here. It must be identified who buys what from you and whom you could target most effectively.
In addition, as the economy is ebbing confidence of everyone, it is the right time to take care of your cash flows, collect your accounts receivables, make the best use of the existing inventories, and review your expenses. A tight grasp in cash management can help you determine your fortune at tough times.
Also, putting some more effort into advertising and promotional activities is required as it can help significantly to prevent market-share erosion. Studies have also showed that when time gets tough, advertising helps most.
These small things would certainly help the SMEs to beat the back of the beast.
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Back to basics for SMEs
Allan Dsouza | Fri Aug 5 06:58:47 2011
Right on here,
finding a niche market also means polishing your core competency. Being price friendly is important if you can cost your product and arrive at a privately kept profit margin.
time to back to basic
anil | Thu Aug 4 07:25:27 2011
What is need of hour is not only marketing, but government attitude towards SMEs. Now SSI is change to SME. In fact government is favouring more to big industry, their problems are solve over night. For SMEs no body is interested. Challenge for SME sector is to make government interest in them either through vote bank or money power. SSI limit has not increased in last many years. Paper work is not reduce. Octroi Local Tax, VAT every thing is going on. VAT at is 5% Octroi is 5.5% on same item. No rational reason for rate of Octroi. We have income tax audit, VAT audit and now local body tax audit what is this? If some big company does not pay our payment on time, or don't pay can CRISIL degrade them. if we don't pay CIBIL will black list us. Why not any big corporate. They default on payment still get loan of Rs 1000 cr in a day...we have seen in telecom case...
time to back to basics for sme's
abhay ekbote | Thu Aug 4 04:37:31 2011
Its a good write up. I would like to add a few points as observations, which may help the SME's in this inflationary period.
1. Focus your marketing efforts on near by markets. do not try to reach further away markets - geographically.
2. Direct Sales Promotion Efforts will bring in both sales and benefits of advertising i.e. increasing brand awareness amongst the consumers
3. commence e-marketing activities. highly beneficial in such situations.
Abhay Ekbote
for today's editorial
suresh Gujarati. | Thu Aug 4 01:07:22 2011
Dear Sirs,
It is nice read your mail, which I always does but especially today's mail is very eye opening and gives time to think why are doing business.
regards,
Suresh.
VAT paid in the EU
Nick Aitken 44 7836 773808 | Wed Aug 3 10:24:17 2011
Many of your subscribers will have incurred VAT in the EU whilst promoting their businesses, attending courses, conferences, exhibitions etc.. Your comment above "......review your expenses. A tight grasp in cash management..."
Do your subscribers know that, subject to local rules, the majority of that VAT is recoverable without any additional expense?
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