There has never been a better time to run a small business than during
this turbulence in European economy.
SMEs are the favourite whipping boys during the periods of economic
uncertainty. Traditionally, they face the maximum brunt from all
SMEs often work as vendors to large organisations. These organisations
use SMEs as an indirect source for short term financing by delaying
payments. Using their larger size often they are able to put pressure
to negotiate unfair settlements.
Larger organisations are able to leverage their size, number of
employees, market dominance and local strength to negotiate bailouts,
tax exemptions and other incentives from the government. Smaller
companies do not have the resources to get any special privileges.
SMEs need to be realistic and understand the challenges that they will
face in the changing market scenario. They can leverage on their
inherent strengths to use the turbulence to their advantage.
While some favour and propagate protectionism to compete against
cheaper imports and outsourcing, globalisation is a permanent and
irreversible development. The essence of running any business is the
entrepreneurial spirit, innovation and an ability to take calculated
There are a host of benefits associated with the nimbleness that comes
with a small business. A large business, like a dinosaur, finds it a
lot tougher to negotiate with difficult changes.
The inherent business and domain expertise is something that no one
can replace. Cheaper imports and outsourcing may seem like a challenge
but they open up portals for higher business advantages. Eurozone
itself is a place of great opportunities where British SMEs can
explore new avenues of doing business. There are also opportunities
across the Commonwealth and other countries.
Government has also realised the role and contribution of SMEs in
boosting economy. In February 2011, Secretary of State for Business,
Innovation and Skills presented a paper entitled "Trade and Investment
for Growth" to the parliament that laid out the Government's plans to
encourage exports from the UK, enhance inward investment and to
strengthen international trading systems.
Minister for Trade and Investment Lord Green spoke on its 1st
anniversary and said, "Encouraging businesses to export more is at the
very heart of our approach. We need to ensure business, especially our
small businesses, have all the tools they need to flourish, that we
strengthen and improve our relationship with trade partners around the
world, that we fight protectionism and ensure poor countries can
benefit fully from free and fair trade."
With this strategy for boosting international business, over 20,000
SMEs have broken into new international markets in just one year. It
is just an indication of what lies in store if SMEs try to use this
turbulence as a source of opportunity.
UK Government's plan of £20-billion guarantee scheme to back loans to
SMEs is likely to provide tremendous boost to the economy. The Cabinet
Office also announced that the government business going to SMEs has
doubled to 13.7%. The Government is also working on bringing in
IT-enabled procurement, prompt payment mechanism and host of other
developments to take most of the bottlenecks away. Large organisations
are also setting up similar policies as a part of their CSR
With more responsibility towards the SMEs from both companies and the
government, along with inherent advantages of a small business, there
has never been a better time to run a small business than during this
turbulence in European economy.
Frank-Jürgen Richter is chairman and founder of Horasis, a global
Horasis is a global visions community committed to enact visions for a sustainable future. (http://www.horasis.org)
For more information, please contact:
|Communications and Public Affairs
|Horasis. The Global Visions Community
||+41 79 305 3110
||+41 44 214 6502