The Seven Skills that SMEs need to thrive in 2024

Promoted by Banjo Loans4 minute read

The popular belief is that an SME owner needs expertise in their field and business acumen. But their sustained success will be dependent on some less obvious attributes.

To run a business that flourishes despite the inevitable ups and downs, SME owners need to possess a range of attributes. To support your funding conversations with SMEs, we look at the 7 essential skills every business owner should have, or cultivate in themselves.

Happily, these skills will be looked on favourably by lenders as well, and ensure the SME has the best chance of getting funded.

1. Financial Management

It’s critical that the business owner is across all their numbers, and that their financial data is bang up to date. They should know – ideally off the top of their head – how profitable they are, and what their cash flow is like. One way you can help your customer here is by encouraging them to make sure their business is continually forecasting. This will help them evaluate whether they’re going to need working capital or other finance to transition to the next stage.

2. Marketing

There’s no substitute for an SME knowing and understanding their target audience and having the ability to continually learn about their market through data, surveys, and good old fashioned customer feedback. It’s also vital to be able to use a range of marketing strategies including digital, and analyse each campaign for effectiveness. Working capital funding can help a business employ more sophisticated marketing techniques to expand their market and move from growth to the maturity stage.

3. Communication

Good communication skills are often undervalued as your client strives to build their business. Among other things it’s the ability to clearly convey:

  • to customers what you have to offer them
  • to staff what you need from them
  • ideas and plans to stakeholders and employees.

Communication is a two-way street. Involving team members in the decision-making process, and regularly encouraging feedback from them can elicit ideas and input that will benefit the business.

4. Networking

Love it or hate it, networking is often the lifeblood of a business. Many SMEs who are in the early stages of growth or don’t have big marketing budgets, are sustained by word-of-mouth referrals. It’s not necessary to be an extrovert what’s important is building and maintaining solid relationships with customers, staff and stakeholders, and nurturing those relationships to take advantage of opportunities, or nip problems in the bud. A client who’s hungry to network could consider going to industry events such as conferences, joining business associations, leveraging social media or hosting customer/stakeholder functions.

5. Adaptability

Most industries are constantly evolving with new technologies and processes being pioneered, that quickly become mainstream. Having an adaptable mindset and being willing to embrace change is a key attribute for SMEs. To keep pace in a dynamic market and ensure efficiencies, they will almost certainly have to invest in enhanced technologies or equipment. Asset and equipment finance funding that can be turned around in a matter of days, not weeks, could be a game changer here.

6. Leadership

For an SME to thrive, the owner needs to motivate, positively influence, and guide their staff. Communication (see above) is an essential element of this, as is leading by example. For time-poor SME owners it can be tempting not to prioritise leadership. Yet their staff are the engine of their business, and good employee morale is like high octane fuel. If the owner can’t devote time or energy to this, the next best option is to employ someone who can.

Let’s not forget thought leadership, either within the business or in their broader industry. Being able to communicate their ideas well, and/or take a position of leadership or advocacy for their industry, can reap enormous benefits.

7. Resilience

Stress and burnout are sadly common among small business owners. Having the mindset to take setbacks in their stride, work creatively to solve problems, and pivot when needed can be the difference between success and failure. Not everyone is born with resilience, but it can be cultivated. Mindfulness techniques, a couple of sessions with an occupational psychologist, or just a trusted mentor to talk to, can all help to build and flex this essential muscle.

For many of your SME clients, running their business is an exhilarating, demanding and sometimes exhausting journey. It can be extremely valuable to them to take a moment with you to ‘look under the hood’.

Talk to your Banjo business loan specialist about the funding opportunities for your clients.

Banjo makes it easier for businesses to access the finance they need to move forward. Taking them to the next chapter...

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