There are many benefits of SMEs for business owners, consumers, employees and communities. Small and medium enterprises, as they are also known, are able to do things that can be difficult for larger companies. From creating unique products to offering custom services, SMEs are a vital part of the economic fabric of the world.
Identify and Satisfy Specific Niches
SMEs are in a unique position because they have the ability to spot unique niches about which bigger companies may not know or may not be interested in covering. Identifying a local or very specific niche allows an SME to specialize in that area and provide customers with a product or service that not many other businesses can.
For example, an SME may notice that there is a need for a car detailing service for new mothers and mothers of young children. Children’s car seats can get messy with food and stains and are hard to remove and reinstall in the car once cleaned. If an SME was able to provide this service in addition to doing a full car seat inspection once the car seat was reinstalled after cleaning, they would be able to satisfy a need in the marketplace that larger companies would not be able to cover due to their size and need for greater revenue channels.
React Quickly to Marketplace Changes
Larger companies often have multiple layers of management. Decisions that impact the strategic direction of the company take weeks or months to make because of the many people involved and the different facets that need to be overseen. In a smaller company, however, strategic changes in the direction of the company can be made more quickly because there are less layers of management and less operational oversight.
As a result, SMEs are able to react to changes in the marketplace to take advantage of emerging trends more quickly. For example, if an SME restaurant notices that a local competitor is offering a new product that is very popular with customers, they may see that as an opportunity to create a similar product with a new twist. Due to the simpler organizational structure of their enterprise, they can conceive the idea and offer the new menu item in days to take advantage of the consumer demand.
Build Better Relationships With Customers and Employees
One of the major advantages of SMEs over big companies is that SMEs are able to build strong relationships with customers and employees. Small and medium enterprises are able to offer a more personal touch with customers. In many cases, the business owner knows many of the customers by name and is able to tend to their needs and make them feel like part of the family.
Employees can feel a sense of camaraderie working in an SME because there are less staff members and smaller departments and more chances of getting to know co-workers and managers on a personal level. As a result, the employees may feel more invested in their work because they can see how their performance directly affects everyone in the company.
Advantages of SMEs to the Economy
Small and medium enterprises help to fuel local economies. With a considerably lower investment cost than large businesses, SMEs can help to lower poverty in communities by offering meaningful employment to locals in addition to enhancing the standard of living. Developing new local technologies, services and products also benefits the communities in which the SMEs are located. New SME businesses help to create infrastructure in local communities, which again creates more employment opportunities.
Regardless of whether your SME employs one person or 100, you benefit the economic landscape of your neighborhood. By enabling someone to make a living, you help him take care of his family and spend money within the community at other businesses, which further benefits the local economy.