HOW TO WIN AN SME : the keys to the big firms that grow in this immense B2B market
It is crucial to consider the differences in decision making. And seek that the benefit is tangible for small and medium customers.
If the companies are added, the self-employed and the monotributistas, in Argentina there are about 5 million productive units, According to the latest data from 2017 of the Ministry of Production and Labor. and of them, 609.000 employ at least one worker in a dependency relationship, but just the 1% occupy to 200% or more. The rest, Clear, they are SMEs. Thus the small and medium concentrate 2/3 of formal private employment and meet 44% del PBI, according to the latest National Economic Census. Son, Thus, a very attractive market for corporations.
DIFFERENT AND NEEDED
However, differences of origin, conception and ways of working between SMEs and large companies usually generate difficulties.
“An SME needs a lot of flexibility from its suppliers, that can be accommodated to the needs they require and that are often different from those of a large company, where everything is much more standardized”, explica Sandra Felsenstein, Director of the DINKA consultancy, specialized in advising entrepreneurs and SMEs.
Corporations usually have processes and organization charts that establish how senior staff and middle managers should act. Additionally, They usually have large and defined budgets in advance and on a regular basis.. in SMEs, by your side, whether or not they have a family background, owners tend to be involved in most operational decisions. And the capital is limited and provided by few people.
In this world of contrasts, Nevertheless, SMEs and corporations need each other. According to Felsenstein, “If a large company wants to get a SME as a client, you have to be used to working with this type of company, understand their problems, and be sure that you can provide a service according to what they need”, Explain.
OWNER YES, ORGANIZATION CHART NO
SMEs have logic, cultures, specific interests and entrepreneurial spirit that differentiate them from other types of firms. But the current regulations define them by variables that have to do with the number of employees and the volume of sales.. Its reason for being in the market is due to its ability to produce individualized and little standardized products., and also serve as an auxiliary fabric for large companies, they supply to particular sectors and respond to market logics different from those that drive corporations.
According to the Manager of Businesses and SMEs of Banco Galicia, in SMEs "the owner has a huge role unlike a corporation, where is an organization chart, a higher degree of professionalism and delegation.” This aspect can be beneficial in some situations.. A) Yes, “The advantage that the SME has over a large company is the proximity of the owner of the company and the employees, which allows to have a different dialogue to raise issues that need to be improved’, points out Fernando Zack, general manager of Plus ART, a work risk insurer (ART), specialized in this type of clients.
When looking for a supplier, One of the fundamental differences between SMEs and large companies is the bargaining power. "The corporation, usually, have more than one alternative, and all of them want to sell you; and if the provider fails, change right away”, says the director of SEA Consultores and a specialist in family businesses. Many times, providers are chosen according to name: if the company is well known, supposed to have more support. But according to experts, the fame of a brand does not always lead to good service for SMEs due to, again, to little flexibility. “Small companies should look at the trajectory, the story and, above all, ask your colleagues; but SME entrepreneurs are not very fond of asking, they like to make their own decisions”, consider Antognolli.
Sandra Felsenstein agrees: “SMEs are tempted to hire renowned companies with a long history, and many times they do not realize that these firms have much larger clients and cannot give them the attention they need. Something fundamental to avoid this is to ask colleagues for references. Other aspects that are prioritized when hiring a service are the form of payment and the price. When it comes to suppliers directly related to the "core business", as raw material manufacturers, Trust and a good relationship usually add up.
Even so, SMEs are very different from each other. vary, from now on, in the areas covered, but also in its composition, economic power or form of management. that look, usually, depends on the philosophy of its direct owners. “The size of our company allows the management to have direct contact with SME entrepreneurs, and that is an added value that we want to preserve”, declares the general manager of Plus ART. Although the company handles a high billing volume, its origin is closer to that of an SME, and has a contained number of accounts, what they present as a strength. In fact, the company promotes itself as “the ART of the Argentine SME”, since it targets that audience.
"Many times, companies hire occupational risk insurance only to comply with the law, but they do not see all the juice they can get from the insurer and the services it can provide them”, recognize Zack.
Because the owners of small firms have little staff to delegate management areas, sometimes that causes a certain degree of improvisation or, at least, little professionalization of these sectors. In that sense, some suppliers can become allies: “The best business we can do as a work risk company, the thing is, when we negotiate the renewal of the contract, Let's propose a reduction of the aliquot; for that we need to work during the previous twelve months in terms of prevention and in the reduction of accidents and litigation”, specifies. From those actions, an ART has the potential to train staff and suggest process or facility improvements. Many times, the investment required to achieve an improvement is low in relation to the risk involved in not making it and, even, results in lower insurance costs. At the same time – and as a main benefit – workers are able to work in a safer place.
Many times, employees make mistakes because of overconfidence or the wrong culture. An example of this is when they do not use the safety equipment, even if the company provides it. In those cases, training given by personnel from outside the company is usually much more effective than a simple talk by the owner or a direct superior.
QUESTION OF PRIORITIES
“In the small SME, the owner's priorities are to sell more and buy better. The rest, usually, it is quite late: that includes marketing, strategies and finances” points out Bouchoux, from Galicia. In family societies it can happen, what's more, there is an unclear separation between personal and company finances: “Many companies fail more due to financial or strategic issues, than for economic or sales reasons”, highlights the head of SMEs of the bank. And another contribution helps to break the stereotype, when he explains that small organizations seek personalized treatment with banking institutions: “One would expect us, like bank, The first thing an SME is going to ask for is money or financing; but that doesn't happen", ensures. Conversely, many of the small societies approach for advice on financial management. to have context: In the world, only the 25% of SMEs take loans. But in Argentina, due to the fluctuating characteristics of the market, That number is estimated at 15% (although strictly speaking it is difficult to establish an exact calculation, given that some entrepreneurs ask for personal loans to invest in their companies).
In the specific case of Banco de Galicia, The entity counts among its clients with 1.000 corporations, 5.000 large companies and nothing less than 275.000 SMEs, including small businesses. That way, more than 95% of your business customers (excluding the agricultural sector), consist of small and medium-sized firms. Which represent, at the same time, the 40% of the volume of non-personal deposits. However, while corporations tend to carry out their investments more efficiently, for Bouchoux, the financial inefficiency of SMEs means that there are idle deposits at various times, an inconvenience that is more detrimental in times of high inflation. In this way, the executive recommends, professionalize, seek advice and use suppliers. "We have tools for finance to take a more leading role and allow better use of excess liquidity". For that he ensures, plus self-management options, They provide personal and telephone advice due to the value that SMEs give to this type of service..
In parallel, on 2012 the entity created “Good Businesses” (www.buenosnegocios.com), an online site with information for SMEs about current events in the sector, available help tools, human resources and finance among other areas. There is also a space where the "community" of companies can communicate with each other and establish various agreements: “We have about 300 thousand visits per month, of which half are foreign companies”, assures Bouchoux.
When a service is provided to a corporation, Ultimately, a solution is provided to the person who leads the position or department in question.. Instead, when working with smaller firms, many times there is a dialogue with the owner or with one of the owners directly: the imprint of the company is, definitely, that person's philosophy. That is why it is essential to generate empathy and understand the specific needs that the employer is looking for., and have enough flexibility to respond to them.
The DINKA consultant confirms “You deal with people. And in an SME the problems that we are going to solve for the people who run it are very important. It is very important to understand what is the added value that we are going to give them, according to the imprint of that company”.
For advisor Antagnolli, creating a climate of trust is key. This is because entrepreneurs in the SME sector are usually "very emotional". At once, If there is something that is not superfluous in a small company, it is time.: in this sense, establish negotiations through an employee without sufficient training or without decision-making power, can become an almost impossible error to overcome.
