SMEChat: Key attributes to small business success

Business
The definition of success varies among entrepreneurs. Some want to be wealthy, others want financial independence  while some are simply looking for an acceptable income or job satisfaction.

A survey of small business owners in Zimbabwe, which is being undertaken by my team, already reveals a clear distinction between the thinking and practices of those entrepreneurs who believe that they are successful and those who are struggling. Three key attributes are noticeable among successful business owners, and evidence from researches and testimonies from outside our borders confirm this assertion. This week’s chat is on one of the attributes, the other two will be covered in the next two weeks.

EFFECTIVE MARKETING CONTRIBUTES TO SUCCESSOur survey analysed 12 companies employing between five and 25 people in the general engineering industry in Harare. Five owners were happy with their businesses, and had the figures to prove it: significant growth in revenues, customers, employees and net income over the past  three years. The less successful ones, on the other hand, had one thing or two to blame for sluggish business.However, our analysis revealed that the successful companies had a higher proportion of sales and marketing staff compared to the strugglers. The number of people you employ in marketing activities shows a clear commitment to effective marketing. Most of the owners admitted that marketing is very important, with one veteran entrepreneur saying, “no matter how good your product or service is, it cannot sell itself.”One of the struggling business owners said he wanted to hire a skilled marketing person but he was afraid of the salary demands the person would make. It’s true, good people are expensive, but they can make a difference between success and failure in business. One of the biggest mistakes that firms make when the economy is bad is to reduce the marketing budget. You might save some money for a while, but that cannot sustain the growth required just to survive in this highly competitive business environment.Not every entrepreneur is good at marketing. One of the successful  owners in our survey apparently managed the marketing function himself and was very good at it. This was because he had a solid marketing background. If you have to do your own marketing, at least invest in acquiring the basic skills required. One of my books, High Impact Low Cost Marketing Strategies for SMEs, contains some tips from marketing experts that you can use to improve your marketing on a small budget. You can read some of the tips on my blog http://chichoni.wordpress.com Every successful business has a sound marketing management strategy. The economic crisis of the past decade and the current low disposable incomes have taught consumers to be frugal. They no longer just go to their traditional store or supplier, they first shop around for the best value. Communicating that value is the work of your marketing team. They should be changing product assortments, pricing strategies, advertising and promotions so as to fit the new value driven marketing environment. A mistake made by one of our struggling entrepreneurs was to rely on a single customer. The government-owned company that he provided engineering services to  was badly affected by the hyperinflation and had to cut down on some services. When the company started recovering in the early days of new currency regime, it invited other suppliers to bid for business  and our entrepreneur was beaten on price. He admitted that he learned his lesson and is now seeking to grow his customer base. A good marketing team, with a proper marketing plan and strategy, would have advised this entrepreneur to diversify the customer base as a matter of principle.

ENTREPRENEURS MUST BE PASSIONATE ABOUT MARKETINGSince marketing is the one function that communicates your offering to people and brings in the sales, small business owners must be passionate about it. As the leader of your team, you set the corporate vision or, as Tom Peters and Waterman called it in their book  In Search of Excellence, the “Superordinate Goals” which drive the rest of the company.If you are passionate about your business, products and services, you will inspire both your employees and your customers. Inspired employees will contribute their maximum effort  to make the business succeed, while inspired customers will see and feel your deep interest in them and commit to buy. Even if you are not a natural marketing person, the passion will ooze through and inspire those around you. Successful companies, especial-ly their owners,  have strong visions of where the future lies, and thus achieve strong positions in their markets. This is because their strategies will be consistent and will be supported by staff at all levels. Effective marketing starts right at the top.

n Phillip Chichoni is a business planning consultant who works with SMEs and entrepreneurs.  His e-mail address is [email protected].