Survival 101 for SMEs in 2009
By Chupsie Medina
INQUIRER.net
Filed Under: Marketing, Economy and Business and Finance
“What’s in store for me in 2009?”
With the current global economic downturn, “not a day passes without me receiving a call or two from owners of small and medium-scale businesses asking the question,” says marketing consultant Herbert Sancianco.
In the midst of all the talk about the Philippine economy likely to be hit next year by the recession bug that has already whipped the First World, and lately, even such big emerging economies like China, owners of small and medium-scale enterprises (SMEs) have not been having fitful sleep these past weeks.
For many of them, the threat of closing shop is all the more real.
As president of Market Bridges Philippines Inc., a medium-sized marketing services company that also gives advice mainly to SMEs and startup businesses, Sancianco knows only too well how any turbulence in the local economy could affect next month’s payroll.
“I have had to face the question of whether my business needed to be shuttered up twice,” he says.
The first time was during the Asian crisis when Market Bridges was barely four years old; and the second was in 2004 when there was too much political noise negatively affecting business, Sancianco says.
“The word now is survival,” he says. “And the key to surviving these days is how well you are able to review and reinvent your business,” Sancianco says. He should know, having actually been through the wringer twice, and seeing others hurdle such challenges.
“Understand your problem,” he says. “Then figure out what could be the right solution.”
Every SME owner must be able to get a good grasp of what his customer is up against in the coming months, the 52-year-old marketing consultant says. If the business can afford to get professional help, a good solid survey would immensely help.
Otherwise, simple and inexpensive backyard surveys that can extract unbiased views as well as suggestions would be very helpful. “Just don’t ask your friends for their opinion,” Sancianco warns. “Talk to your customers — know what they’re looking for and what they’re not looking for,” he adds.
There are also some basic tenets that need to be re-remembered. For example, if you’re in the retail business, customer service is key. Presentation is also very important, says Sancianco. Many businessmen, with the passing of time, tend to relax their watch on these important marketing principles.
On the housekeeping side, a review of how lean and mean your operations is, and acting accordingly either by slashing operating costs or downsizing human resources, is a very real option. Reviewing the central management system is also important if the business is bent on getting that second wind.
The other important key to survival is being able to reinvent the business. A change in the business’ operating environment resulting from the economic slowdown should challenge businessmen to find new opportunities or products to replace otherwise compromised sources of income.
Using the basic information derived from your survey, decide on which new direction the business would pursue. Again, Sancianco says, it makes sense to consult a professional who would be able to validate and even financially quantify the feasibility of any new venture.
“A third party will always have the vantage view of someone looking in and assessing the situation with open eyes,” he says.
At this point, creativity is highly valued. An example, says Sancianco, is the birth of the beverage C2, a product that the Gokongwei business empire introduced some years ago that successfully ate into the market of carbonated drinks.
“Many businesses are also not using the Internet as much as they should,” Sancianco says. It does not cost much to sign up with Yahoo Small Business, and yet the rewards can be so much more.
Some new entrepreneurs who find they do not have the right skills to run a business should set aside time for a diploma or even a certificate course from any reputable business school.
For many family-owned businesses, on the other hand, now is the time to give really serious thought to professionalizing their management.
“Many owners find that their children have grown up and away from the family business, and there is no one with the youthful energy to follow through on expansion plans,” Sancianco says.
Hiring competent people who can do the job would free the owner precious time that could be used to study how to bring the business to a higher level, thereby avoiding stagnation.
Lastly, Sancianco says, it does not help to put in more prayers and hope that this global crisis will be kinder to Filipinos.
In parting, Sancianco reminds us that hard times will only happen to people who lose their vision. Even before times get tough, it is best to be prepared.