After working with SMEs for last few years, one of the reasons why most SMEs are not able to scale up their operations is because the day is usually spent in firefighting. A typical day may start at 8.30 AM or 9.0 AM with messages from customers, vendors etc. By the time, the person reaches his office, his day is almost cut out for him. He has to find resources and soothe his customers. I describe it as “Vicious Circle”
One of the reasons why SMEs struggle is because they lack a team. A team that can take responsibilities and deliver them instead of taking on tasks. This is due to many factors. One is poor risk taking appetite where the entrepreneurs. Some entrepreneurs do not want to incur or want to avoid cost of learning. Some are very hands on and find it difficult to delegate. So they typically end up working with under-qualified staff.
But increasingly I am finding that they realise that they have reached the critical mass but now cannot scale up as their employees are not confident to take responsibilities. The cost of new hires with relevant skills becomes a deterrent for the entrepreneur. (S)he is afraid of the new hires not delivering.
This vicious circle can be broken only once the entrepreneur starts developing a business plan. Take time off, reflect and work on the roadmap for next two to three years with an operational plan for the first year. This also provides clarity of thought on manpower and other resources required, expectations from them and a framework ( how to monitor and when to monitor) to gauge company’s progress and monitor performance of the employees. The “Vicious Circle” would not turn to “Virtuous Circle.
Planning, developing robust systems that are customised to the culture they want to develop and needs of their business can help the business men scale their companies.