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Archive for the ‘SMEs’ Category
Friday, September 11th, 2009
In this week’s Thursday Night Insight, Nick Hague explains why, in his opinion, there will always be a place for small businesses.
Every day, when working in the office, I walk through the precinct close to where our UK office is located to go to our local deli to get my lunchtime sandwich. I have been furrowing this same path for the last 12 years and it still fills me with joy every day as I am greeted and welcomed by the local shopkeepers as if I was part of the family.
I feel highly privileged to work in close proximity to such a thriving local community where the local precinct holds many such shops that vary from clothing, homeware, aromatherapy and shoe shops through to grocers, fishmongers and butchers (and I defy anybody to show me a better butchers than Corrys). However, as our towns and cities are continued to be overrun with the marauding retail giants of Tesco and Walmart, I think it is refreshing to see how our local community (in the face of adversity with the current economic climate) is utilising its owner-managed enthusiasm to deliver a passion and engagement that is now lost from many of the faceless giants of the corporate world.
We have recently completed a piece of research for Business Link in London, speaking to small business owners in the UK’s capital city to find out what impact the credit crunch has had on their business and their future business plans. As expected, a fifth of businesses have been extremely affected by the recession, with 4 in 10 respondents stating that their overall budgets and expenditures have been significantly affected, especially the adverse impact on cashflow, reduced investment and funding, and a decline in national sales. However, even though businesses have been affected, optimism still remains high for the next 12 months with a half of business owners looking to fuel growth through ramping up marketing activity, 4 out of 10 looking to diversify into new markets, and a third looking to launch new products.
Like the local shop keepers where our office is based, I see many smaller business owners putting in superhuman efforts to make their businesses stand out and succeed against the competition in this difficult climate. In these uncertain times, small companies do hold many advantages over larger organizations, with lower central costs and greater awareness of changing trends allowing new ideas to thrive, and flexibility to react quickly to shifting demands.
Over the last 12 years of running B2B International I have experienced the difficulties and tensions as a company rises from humble beginnings into an organization that now has a global presence on three continents. I remember very early on, speaking to one of our research executives, and her saying “Why do want to grow? It is nice to work for such an intimate, family run company.” The problem is, if you always do what you always have then you always get what you have always got – if you are lucky! From our inception through to our current position we have continually fought to be adaptable, innovative and personal as we believe that customer service prevails in today’s competitive environment and that the future belongs to the smaller company. Of course, larger corporations will always enjoy economies of scale along with greater brand awareness and only large companies can carry out industrial production in the industries of automotive, steel, pharmaceutical and utility provision but, as typified by the example of General Motors, even with their large resources, things can still go horribly wrong.
A contrast is the John Lewis Partnership, the British department store and grocery chain. Here the staff really do own the business, and behave like enlightened capitalists rather than bloody-minded union members. It offers world-class service and a lesson in how important it is to keep the customer happy, and herein I think lies the answer. Smaller companies are continually looking to innovate and deliver customer service. They punch above their weight and force larger companies to up their game. In these uncertain times, the smaller business owner will continue to succeed.
STOP THE PRESS! Calling All Small Business Owners In London
We want to know the challenges you are facing as an SME in the current market conditions. Take part in the Business Link in London SME survey and tell us your opinion.
Business Link in London along with B2B International is kicking off its second wave of surveys for its Diverse Business Confidence Index Project. This research will provide an in-depth analysis of how the recession is having an impact on London’s small and medium-sized businesses (SMEs).
This survey will be the voice of over 3,000 small businesses in London and the Index will provide a timely and statistically significant insight into how different types of SMEs continue to be affected by the recession and what actions they have taken to combat its effects.
If you are a London business owner and would like to take part in the survey of the Diverse Business Confidence Index then please e-mail dbci@b2binternational.com and include your name, company name and London borough where your business is based.
Posted in
Business Confidence Index, London, Nick Hague, Recession, SMEs, Small Business, Thursday Night Insight |
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Thursday, August 6th, 2009
The findings of a survey into the confidence of business owners in London have just been released. Conducted for Business Link in London by business-to-business market research and intelligence consultancy B2B International, the research highlights how the effect of the economic environment varies significantly by type of business, location and personal characteristics of owners.
The survey, commissioned to examine how to meet the business needs of a diverse marketplace, is the first of its kind and the ‘Diverse Business Confidence Index’ has been created to represent minority groups including women, ethnic/faith groups, the elderly, the disabled, and those of a particular sexual orientation.
B2B International director Nick Hague, in charge of the survey, says the survey uncovered perceived discrimination and prejudice in the business world. “This diverse business confidence index for BLIL is a great step in finding out how business owners are coping during the recession. Companies in the industry sectors of recruitment, property and construction have been hardest hit during the economic downturn, whilst least affected are in the health and beauty sector. As a bonus to developing such a robust index, we also gained real insight into diversity issues in business which may be mirrored across the country, not just across Greater London.”
London’s SMEs Defy Recession
As London’s small businesses bear the brunt of the recession many are still looking to grow, according to Business Link in London’s new Diverse Business Confidence Index (the Index). The first of its kind, the Index surveyed over 3,000 small businesses in London and found that 84 per cent are planning on expanding and growing their business over the coming year. Nearly two thirds of entrepreneurs surveyed said that the recession is still affecting their business with 39 per cent saying the recession has significantly impacted overall budgets and expenditure.
Patrick Elliott, chief executive of Business Link in London, said: “This Index gives a significant insight into how London’s small businesses are impacted by, and responding to, the recession. These results are an encouraging sign in these turbulent times – but they don’t come as a surprise to us. We regularly survey our clients on how they’re managing through the recession and we’re seeing a clear trend emerge of a sector that is refusing to get bogged down in the doom and gloom. But what’s telling from this index is that this confidence is across the board – many entrepreneurs across regional, industry, and demographic groups are responding to the recession by aggressively seeking out new market opportunities.”
Mayor of London, Boris Johnson, said: “It is extremely heartening and will inspire confidence in the strength of the capital’s economy that so many of London’s small and medium sized firms are planning to expand in the coming year. Making up nearly 99 per cent of our business sector, they create half of all the capital’s jobs and are therefore critical to its success. I will continue to do all I can to support these firms and ensure they get all the help they need to get through the downturn – they will, after all, be our spring board to economic growth and prosperity when the upturn comes.”
Maintaining and generating sales was identified as the single biggest challenge facing all businesses. However, three quarters of those surveyed remain optimistic about their business over the next twelve months. Of those who are planning to grow, most planned to drive this through diversifying their business operation – 43 per cent plan to enter new markets, and 35 per cent are looking to develop new products and services.
Start-ups were more likely to have difficulties with accessing funding while established businesses tended to have more difficulties with generating new business. A quarter of all pre-starts cited the falling value of the pound as the biggest impact and nearly half are revisiting their business plan projections as a result of the recession. However, despite being most affected by the recession, start-ups were the most optimistic about their business prospects with 89 per cent planning on growing their business over the next twelve months.
For more information on the Diverse Business Confidence Index please click here.
If you are a London business owner and would like to take part in future waves of the Diverse Business Confidence Index then please e-mail dbci@b2binternational.com and include your name, company name and London borough where your business is based.
Posted in
Business, Business Confidence Index, Diversity, Economic Downturn, London, Recession, SMEs, Trends |
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Friday, October 24th, 2008
Alaric Fairbanks this week makes our mouths water with the mention of some of his favorite local kebab stalls. However, on a more serious note, Alaric is analyzing how street vendors of this relatively undifferentiated offering encounter many of the same problems faced by much bigger organizations in different markets around the world.
As almost anyone with a penchant for mutton and beer will tell you, one of the best things about living in Beijing, providing you don’t live right next to a stall (they can be quite smelly, and the lack of toilet facilities coupled with beer consumption of patrons can be problematic for neighbors), are chuanr, or kebabs. Mutton, chicken hearts and tendons, washed down with a bottle or two of Yanjing beer are, for me at least, pretty much indispensable to life in China’s capital city. But can this tell us anything about the business environment? Interestingly, for me at least, this came up in a recent conversation I had whilst patronizing my favored stall.
This must be one of the toughest markets to be in, and in many ways can be seen as representative of the competitive environment in undifferentiated markets, especially in China. Let us take, for example, a quick look at Porter’s Five Forces applied to this business model.
- The threat of new entrants: Obviously barriers to entry are low (an improvised barbeque is not a significant cost) and switching chuanr vendors is fairly easy. Similarly, adding to the product range, for example with ram’s penis, can be very easily copied by the competition.
- Supplier power: The raw material – mutton and other assorted parts – forms the substantial part of costs relative to total purchases, and there are almost no substitute inputs. To make matters worse, these raw material costs have a huge impact on total cost.
- Threat of substitutes: Again a problem, as it’s not difficult for the customer to switch to ma la tang (numbing and spicy soup) or rou jiamo (a very distant cousin of the hamburger).
- Customer power: Price sensitivity of customers is pretty much a given in many markets in China, and chuanr are no exception. Buyer information (in this case buyers know the going rate for the product as it is the same everywhere) leaves little room for incremental increases. Backward integration by customers is, on the face of it, less of an issue as most of us will be pretty unwilling to invest in our own barbecuing equipment. Where there is a problem here, is when selling through a small restaurant, as there is little to prevent the ‘partner’ setting up their own stall.
- Rivalry or competitive intensity: Here we have a very fragmented market, almost entirely composed of sole traders. Fixed costs are low, having a limited impact here on rivalry in some respects as they do not have a great role in the unit cost of chuanr; however, this does mean that entry barriers are low. The nature of the raw material, mutton, does have an impact, as these perishable products must be sold immediately. Fortunately, exit costs are low, as equipment is not highly specialized and no one is ‘forced’ to stay in the market. This is also not a market that so far has lent itself to product differentiation or branding, thus almost commoditizing the market.
So what does this tell us? Many of the markets we look at in China, and elsewhere, exhibit some of these characteristics, particularly in the areas of new entrants, substitutes, and low levels of differentiation. There are, though, examples of companies growing or moving out of unattractive markets, and differentiating themselves from the competition in a seemingly commoditized market. Equally, there are some examples of differentiated product and service, and expansion in the chuanr business: Xiao Li, arguably the best producer on Yong An Li East Street, has an embryonic brand, recently added a few plastic stools and a table to complement his offering, and has doubled his workforce with the addition of his charming sister.
Posted in
Alaric Fairbanks, Competitor Analysis, Market Research China, SMEs, Thursday Night Insight |
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Wednesday, January 2nd, 2008
First of all – A Happy and Prosperous New Year to all our readers!
Although New Year is typically a time to look forward to new events and experiences, we thought we’d break with that convention somewhat in our first post of 2008, by having a quick review of the year just gone on The Market Research Blog. With that in mind, here’s a quick rundown of our most popular posts from 2007, just in case you’re a newcomer to our blog or if you simply missed something we posted in the last year:
- Guerrilla Marketing – When Less Is More
- The Benefits Of Advertising
- Choosing A Logo
- White Paper: China and India -The Growth Debate Part 1 | Part 2 | Part 3 | Part 4
- Meeting the Needs of the Retail Industry
- Which Brands Have People Been Discussing This Week?
- Online Leadership Portal – Part 1 | Part 2
- Market Research – The Key To Business Success – Part 1 | Part 2 | Top Tips
- Go Figure – Pricing & Segmentation – Part 1 | Part 2 | Part 3 | Part 4
- Professional Services and Valuing the Customer
- The Market Research Industry in India – Part 1 | Part 2
- Will Television Advertising Arrest Starbucks’ Slumber?
- Logo Research – Approach With Caution
- The Benefits Of Online Research
- Are Brands Like Caricatures?
- Market Research Prices – A Global Comparison Part 1 | Part 2
- Marketing and Selling to Chinese Businesses Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7
- The Ultimate In Customer-Driven Pricing
- Do You Understand Your Customers?
- Ten Tips On Branding
From our point of view, 2007 was a big year of expansion for B2B International – especially in terms of getting our Asian office in China up and running as well as unprecedented growth at our central operations in the UK. Naturally, we’re hoping for bigger and better things in the year to come – and we wish you much the same.
We’ll get into the swing of things proper in the next few days with some more of our thoughts on market research, the universe and everything else!
Posted in
Advertising Research, B2B News, Branding, Customer Satisfaction, Esurveys, Market Assesment, Market Research, Market Research China, Market Research India, Online Research, Pricing Strategy, Qualitative Research, Quantitative Research, SMEs, Segmentation |
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Wednesday, December 5th, 2007
Following on from yesterday by continuing the theme of the challenges facing small businesses, today we look at the poor level of service sometimes given to small companies by firms offering professional services. Everyone’s a consumer at some level, and as Robert Craven argues, SMEs should be valued customers just as much as anyone else:
I run a consulting company that employs between seven and ten employees depending on the time of year and state of the economy.
My professional advisers – accountant, lawyer, architect, financial adviser – are very important to me. Many run their own businesses, just like me. But for whatever reason, they often don’t think of themselves as being a small business. And that can cause problems for people like me. So what is it that I want my advisers to be able to do? First and foremost, I want my adviser to understand me.
Show an interest in me
From where I stand, I am totally unique. No-one else has the same specific problems that I have and no-one else has the same worries and concerns. When I am going to talk about money and my business I want the other person to have a real interest in me and my aspirations.
Second, I want my adviser to understand the needs of a small business. I want them to really understand (or at least be able to empathise with) just how brilliantly skilful I must have been to grow my business despite all the odds!
Business is not simply about money. Business is about people; employing and motivating people, getting people to buy from you and finding people to buy from. Business is about sales and marketing and about delivering your service or product.
I don’t expect an adviser to understand everything about small businesses, but a decent rudimentary
understanding is not unreasonable. Most businesses are fairly simple – understand how a business works, not in theory but in reality – that’s what I want my adviser to be able to do.
Third, I want my adviser to understand my business. I have specific problems – problems that are specific to my industry, to my market and to the way that I run my business.
The adviser should know this and be able to assist with specific industry-related support – often, a bit of research would do no harm!
Swift action
Fourth, I want swift action. The systems used by most competing advisers appear to be relatively similar, so I will accept whatever calculations or recommendations are made.
What I cannot accept are the intolerable delays that sometimes seem to occur. I want swift action, answers delivered when promised or, if all else fails, to be offered a date when work will be completed. A little courtesy is all that I ask.
Fifth, I want to know what I am paying for and I want to know how much I am going to pay. If an accountant or lawyer charges by the hour, then they are incentivised to work slowly. Other professional service firms (architects, dentists, doctors) work to a price, so what’s the problem? Surely fixed price agreements would incentivise them to work more efficiently.
What I want is an adviser that understands me, understands my business, gives me decisions when promised and explains how they charge. Not much to ask, surely!
The above article originally appeared in the October 2007 edition of Better Business magazine
Posted in
Customer Satisfaction, SMEs |
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