5 Ways for SMEs to Succeed in a Down Economy

Despite the difficult times the SMEs are facing these days, there are a lot of opportunities for them to capitalize on with the right business model and strategy in place.  

1. Do What You Do Best
More often than not, SMEs have a tendency to do too many things to clients in an effort to retain customers. This is not good and can derail the business.  They should refrain from launching new products and rather focus on its area of expertise.

2. Niche Markets – Think Outside of the Box
Finding a niche market, one that s relatively untapped, requires out of the box thinking, but is the key to gaining an edge over one’s competition.

Small and medium sized companies may not have the cash flow and expenditure allowances that large corporations have, but they are still willing to pay for quality services that cater to their operational needs. 

 3. Client Retention - Know Your Audience
However, simply identifying a niche market is not enough to be successful in any economy. In order to attract and retain customers, small business owners must get to know their audience and deliver something that their competition isn’t, whether it be a reduced price for services, bundled packages or one-on-one client attention.

In knowing and adapting to the needs of one’s audience, excellent customer service will always be provided and customers will remain loyal to such levels of commitment.

4. Know Your Competition - Be Bold, Be Different
Even in niche markets, knowing one’s competition is paramount to successfully driving the growth of a business. Regardless of whether this information is gleaned through first hand experience or by careful market research, small business owners must be willing to get their hands dirty by working hard to unearth the services or products that are not otherwise available in the marketplace, thus differentiating their company from the competition.


In essence, particularly in today’s economy, small business owners must be willing to go above and beyond what they normally would offer clients in order to survive. This might include bundling and expanding upon one’s services, offering reduced rates for packages or customizing packages to meet the needs of each individual client.

5. Hire Key Talent – You’re Only As Good As You Employees
In every business and across all industries, a company’s worth is only as good as the people that it employs. In a time where customer retention and account management are essential to maintaining a profitable business, it is imperative that small business owners look to hire only the best of breed, requiring a workforce that is experienced, productive and results oriented.

By offering a broader talent pool of employees – ones that are ready to answer any and all questions presented to them by customers, based on industry knowledge and experience – clients won’t have a reason to walk away and find better service elsewhere.

6 Steps to selecting the Right Supplier

If you asked a food manufacturer 20 years ago how they selected an ingredient supplier, they would have likely said it was based on price, flavor or the supplier location and preference. However, as government and industry put a stronger emphasis on food safety and quality, evaluating and selecting the right supplier today has become much more critical and complex.

Selecting the right supplier may seem like an onerous process for your supply chain. While having a more simplistic supplier selection process may be helpful for some smaller supply chains, a more involved process of selecting the right suppliers can help many food and nutrition companies meet or exceed regulatory standards, drive customer demand and build a strong brand reputation of quality products.
Quality and safety of our ingredients, products and packaging are paramount to our success at Abbott Nutrition, so choosing a good supplier is a critical business decision. Consequently, our supply chain team has identified six steps for choosing the right supplier, as well as several best practices in the industry.

Reflect back to your last home project. Your focus was probably to keep costs low. You may have used a lower quality, cheaper material to save money, and upon completion, were satisfied with the result. Unfortunately, over time, the project did not look as nice as it did at first. Similarly, if you used the same criteria when selecting ingredients for your manufactured food products, it’s possible that the produced food would look good when it was first manufactured, but it may not meet shelf-life expectations. In addition, if you needed to go back to the supplier for replacements, they may not have the specific materials, or in some cases, they may no longer be in business. At this point, you are probably thinking, “If I had used higher-quality materials from a reputable supplier, my finished product would have met my expectations.”

Selecting the suppliers who can meet your consumers’ demand for higher quality ingredients may bring some initial costs, but it will pay off over time through consistent, high-grade materials. However, the process to find the ideal supplier is often not easy and requires discipline and hard work.

STEP 1: Identifying a Supplier
Before selecting your supplier, it is important to gather the opinions of stakeholders and define the criteria for the selection process. This list of stakeholders may include members from research and development, purchasing, marketing, quality assurance and any other area of your organization that touches the supplier selection process.
During this time, it is important to identify a few suppliers to assess their capabilities and compare pricing. The supplier selection team should work with the potential suppliers to establish specifications. For example, they should explain how the supplier’s materials would be used in your products and within the manufacturing process. Keep in mind that the ultimate goal is a win-win situation for the supplier and manufacturer; therefore, open and transparent communication is extremely important. A key criterion in selecting the right supplier is value. Cost should not be the lone driver; you should instead look at the total cost of ownership, which looks at the supplier’s:

• Customer service
• Delivery commitments
• Reliability and responsiveness
• Resource savings (hard and soft)

STEP 2: Measuring Supply Performance
Another important step of the supplier management process is developing an audit and assessment program.

Best-in-class supplier programs conduct audits throughout multiple stages of the manufacturer/supplier relationship. You should always conduct an audit before the contract is signed to confirm that the supplier does not have any significant compliance or quality system failures that could affect your ability to produce top-quality products. Another reason to conduct the audit beforehand is to understand the supplier’s strengths and weaknesses before the relationship becomes official.

Even after the contract is signed, you should continue auditing, basing the frequency of the audits on the criticality of the supplier. To determine the frequency, all suppliers should be categorized into a level of risk or importance. This prioritization will help you be smarter and more effective with your resources and place a higher focus on your important, high-risk suppliers, while continuing to monitor second-tier suppliers.

Beyond an established audit program, you should continuously monitor and assess each supplier’s performance. You can track positive or sustained strong performances, as well as negative trends.

STEP 3: Gaining Supplier Feedback
Another tool you can utilize with suppliers is a self-assessment questionnaire. The supplier self-assessment can be used to identify performance gaps, as well as discover how the supplier understands their own operation.

In addition to audits and assessments, it also is beneficial to monitor informative metrics that direct value to the business. You should discuss and select the appropriate metrics with suppliers to receive their input and understanding of purposeful measurements. Examples of these metrics include rejected lots, perfect shipments and documentation errors. The metrics selected should measure the total cost of ownership, as well as improve performance toward the maximum finished product performance.

STEP 4: Achieving Certification
As your supplier relationship grows stronger, and both parties feel they are receiving positive performances, the supplier may be able to achieve a certified status. This occurs when you establish a set of selected criteria to be met by your suppliers. Certification must be obtained with sustained successful performance and can be lost with poor performance or a negative compliance outcome from an audit.
As the relationship continues to grow, the supplier also will become more integrated into your manufacturing process.

STEP 5: Developing Partnerships
Ultimately, the manufacturer/supplier relationship is at its best when a strategic partnership is formed, allowing full knowledge of the source of materials and ensuring high quality.

With a stronger business partnership, a supplier is more likely to:
• Anticipate what is needed from the manufacturer and begin to take the leadership role in communication.
• Notify the manufacturer if problems occur that limit production availability, or a quality issue is   identified.
• Communicate production delays when downtime or maintenance is required.

This type of partnership allows for an increased understanding and mutual benefits for both parties. It cultivates stronger commitments and encourages a greater interest in success for the material and finished goods. This type of relationship is your ultimate goal.

However, there are risks associated with forging this kind of partnership. Trust in both parties becomes paramount, and both entities must ensure no potential or real conflicts of interest occur. When both parties become more reliant on each other, if there is a breakdown on either side or the relationship dissolves, there is much more to lose.

STEP 6: Ensuring Quality for Consumers
Depending on the number of materials and ingredients needed, developing a supplier quality management program can be a complex and upfront investment.

However, once you choose to build strong relationships with reliable suppliers, you will have peace of mind, knowing you’re delivering high quality to your consumer.

The benefits are realized when your supplier quality team is focused on issues other than material quality, and your satisfied end-users have confidence in the products you provide.

Source: Food Safety Magazine

Domestic Airlines in Ghana to reduce fares

Patrons of domestic airlines in the country are likely to start enjoying fares as low as GhC 30 from Accra to Kumasi by the first quarter of next year following increased competition in the domestic aviation sector.

The sector which has four airlines, Citylink, Antrak, Starbow and 540, currently operating is expected to see more airlines joining the industry by the first quarter of 2012.

This is expected to push domestic fares down. Already, fares between Accra and Kumasi are hovering between 90 and 120 Ghana cedis.

The president of the Ghana Association of Travels and Tourist Agents (GATA), Hillariius Macash Akpah Snr. has said though industry players are hopeful the prices will drop significantly due to the competition, flyers must also demand a drop in fares.

"During this Christmas, they can bring the cost down to about 30 or 35 Ghana cedis for those who want to go to Kumasi and Koforidua for the holidays,” he stated.

The entrance of new airlines, Starbow and 540, are reported to have contributed to a drop in current fares.

How to boost your company’s business-to-business sales

B2B customers say they care most about product and price, but what they really want is a great sales experience. For sales reps, that means getting the basics right.

When it comes to building valuable relationships with customers, sales representatives are critical players on the front lines. But are they getting the basics right? Customers want to be contacted just enough, not bombarded. Sales reps should know their products or services intimately and how their offering compares with those of their competitors. Customers need information on exactly how a product or service will make a difference to their businesses. And while they may say price is one of their biggest concerns, a satisfying sales experience is ultimately more important.

Trashy Bags stand at Accra Mall.

© EnterpriseAfrik

These were the key findings of a survey we conducted of more than 1,200 purchasing decision makers in small, medium, and large companies throughout the United States and western Europe who are responsible for buying high-tech products and services. The insights were consistent across simple to complex products and apply readily to most business-to-business (B2B) industries, which also have complex, multi–touch point sales processes involving both end users and purchasing professionals.

We found a big difference between what customers said was important and what actually drove their behaviour. Customers insisted price and product aspects were the dominant factors that influenced their opinion of a supplier’s performance and, as a result, their purchasing decisions. Yet when we examined what actually determined how customers rated a vendor’s overall performance, the most important factors were product or service features and the overall sales experience. The upside of getting these two elements right is significant: a primary supplier seen as having a high-performing sales force can boost its share of a customer’s business by an average of 8 to 15 percentage points.

Cellphones at a stand

 That makes the next finding all the more important. Of the many habits that undermine the sales experience, two that are relatively easy to fix accounted for 55% of the behaviour customers described as “most destructive”: failing to have adequate product knowledge and contacting customers too frequently. Only 3% said they weren’t contacted enough, suggesting customers are open to fewer, more meaningful interactions.

Fortunately, both damaging habits can be fixed. Companies can address a lack of product knowledge by centralising content development to guarantee a uniform message and creation of compelling value propositions for customers. And to ensure deep understanding, sales reps can receive experiential training and on-the-job coaching, preferably side by side with the content-development team. Finally, sales reps don’t need to know everything. When it comes to specifics, we found customers were more than happy to use self-serve or online tools and selectively tap specialist support for the most complex situations.

South Sudan Brewery.

Striking the right balance between contacting customers too much and too little requires understanding their stated and actual needs. There should be a clear strategy for reaching out to customers based on needs and profit potential, with schedules dictating frequency. The best contact calendars centre around events that create value for customers, such as semiannual business reviews, which provide an opportunity to assess customer needs and ensure satisfaction. The key is to recognise that customers are also looking to lower their interaction costs, so any contact with them must be meaningful.

The sales experience matters, and a good one starts by getting the basics right. Companies should examine exactly how they are performing by asking the following questions: What are the most influential drivers of the sales experience? What things are your sellers doing that could damage relationships? How does the perception your customers have of your sales force compare to how they view your competitors? It is only by knowing and understanding the answers to these questions that companies can begin to identify and pursue the right fixes.

Source: How We Made It In Africa

How to Get Customers to Help Build Your Brand

Lead generation for any business is expensive. Brand building even more so.

But when it comes to a choice between building a brand or getting more leads, always opt for leads, because they, in turn, will help you build your brand. How exactly?

By developing your reputation as “the go-to” place or person that consistently delivers excellence to new and repeat customers.

That way, you can build your brand on the experiences your customers have with your company based on their own perceptions.

An emotionally satisfying customer experience can be powerful, especially these days when service expectations are so low.

Nothing is more valuable to your business than a great impression that lasts beyond a single purchase or transaction. Remember that today’s exceptional service means customer loyalty and repeat business over time, and better yet, great word-of-mouth for your company.

The key, of course, is being able to deliver what you say you’ll deliver, when you say you’ll deliver it, whether it’s your product, service or some kind of positive result.

It also helps to start thinking in terms of the type of value you can deliver in exchange for the prices you charge.

• Could it be value up-front or added value on the back-end?
• Could it be value based strictly on service, delivery or another factor, such as innovation, design, packaging, a unique location or business model?
• Can you leverage that value five or 10 times (either actual or perceived value) compared to what your prices are?

Setting up and planning your business this way can shift your priorities dramatically, and can save you a lot of time and expense for the up-front costs of branding that can waste a lot of your precious start-up resources.

Simply put, you can have a great logo, signs, business cards and website, but until you have a customer, you don’t have a business.

Start with a simple “type treatment” -- meaning your company name staged in a simple, or even unique font -- for your logo or brand identity, and start focusing on how you can add value to your customers’ experience.

Then, focus on a systemized, low-cost way to generate qualified leads that can be replicated.

This may mean setting aside your preconceived notions of advertising that “looks good” and generates a response, or considering online or social media channels of lead generation versus conventional or off-line methods.

It could also mean creating some informational or educational "white papers," case studies or brochures that focus less on the products or services you have and more on what those products or services can do for your customers.

Your focus on these two areas will not only save you money upfront and set you up for ever more profitable business down the road, but you’ll also be able to:

1. Develop an exceptional go-to reputation that will go further in building your brand than any expensive ad campaign could ever do.

2. Establish the basis for a referral-based business, because old-fashioned word-of-mouth is the least expensive and most effective advertising you could ever want for your business.

Can this approach work in any industry or category? If you don’t think that it can, you may just need to find some key points of difference you can offer that will immediately set you apart from the competition. Consider the following:

•  Are you in an industry that prides itself on complexity and customer indifference? Offer simple solutions and great service.

•  Are you in an industry that doesn’t offer a guarantee? Be the first to offer one.

•  Are you in a category known for pushy sales people and expensive add-ons or fees? Find ways to streamline delivery and hire the best, most personable sales people you can find.

No matter what you do, make it unique. You’ll not only effectively position your company against your competition, you’ll also successfully anchor it in your customer’s own mind. There’s no better branding strategy than that.

Better yet, you’ll reap the benefits of your campaign not with high scores in some focus group, but with profits you can literally take to the bank.

Source: The Enterpreneur

When Your Income is from Only One Customer

The "Eggs in the Basket" Dilemma

Having all your eggs in one basket is always a dangerous situation, especially if that customer is a slow pay. It's devastating because by extending credit, you're becoming their bank. And if you're tied to one customer and that customer is sold or runs into a problem they'll take you down. You can't fix the one-customer situation overnight. You need to set plans or goals to attract additional customers and then slowly work towards those goals.

Having one customer is a balancing act. On one hand, you're rooting for the customer and hoping they will continue to like your service. On the other hand, you have to work very hard at building your own enterprise so that the failure of the one customer will not put you out of business. Edeburn suggests having regular meetings with the customer to monitor how their business is going and to find out if there are ways you can be of more help. Edeburn also advises that before making any major investments try to get a long term commitment from the customer, one that allows for price adjustments.

Small Accounts Can Help

If you find yourself growing quickly with one customer, you may be tempted to terminate smaller accounts. Smaller accounts give a business a constant, reliable source of income even if it is dwarfed by large orders from one customer. “These secondary sources of income can be particularly helpful to a manufacturer who's dealing primarily with one large retailer,” says SCORE counselor Larry Lakin. “Often these retailers can help you establish a market or test-market a product. Testing like this can help you determine whether to commit to the manufacturing. And if the product succeeds in the smaller store, or with a niche retailer, the manufacturer has more of a story when he wants to take it to Wal-Mart.”

• Run periodic credit checks on your prime customer.
  Don't rely on assumptions and data from last year. You owe it to yourself to stay abreast of your big customer's credit worthiness.
• Create a survival a plan if your prime customer goes under.
  Your plan may include cost-cutting, hibernation, or borrowing. No plan is perfect, but—like keeping a flashlight under the bed—it's good to know it's there.
• Understand exclusivity.
  Exclusive arrangements—sometimes common with large accounts—prohibit you from supplying to others. These arrangements can be very profitable but they can also be a ball and chain. If you are tied to an exclusive deal, ask for a written agreement with regular guarantees—for example minimum annual guarantees, and if possible price adjustments.

Source: SMEToolkit