The 4 Factors of Success for SMEs

This blog highlights what’s right with small business and non-profits. So often, attention in the news and in business books is pointed at Fortune 500 and large publicly known companies. In Canada, Statistics Canada reports that 5.1 million employees (48 per cent of the total private labour force) work for small enterprises with fewer than 100 employees. 16 per cent work in medium-sized enterprises (100-499 employees). In total, SMEs employ just over 64% of all employees in the private sector. In the US, the numbers are roughly the same with small business representing 63 per cent of sales and they own 61 percent of the business assets.

It seems that success for small businesses and nonprofits is a function of organization, a system, planning/marketing and the leader's actions that have been developed and maintained. These winners make a conscious effort to ingrain a culture of success, which lasts for a lifetime. From 0ur observations, here are four factors that make SMEs successful;

Good People Who Fit. Top performing organizations have recognized the value of the four aspects of fit, fit with the manager, fit with the job, fit with the team and fit with the organization. They have used this information at all levels of their people development beginning in recruitment and following through with orientation, coaching/mentoring and succession planning.

A System. Success smaller-sized organizations have clean internal systems with little waste. Because of factor #1, they have a team that all follows the system. They have tools that everyone uses not allowing individuals to create their own versions. These systems are simple and uncomplicated. The leaders who succeed have an organization that depends on a system. Not an organization that is dependent on certain people to know how to run the system.

Planning/Marketing. These organizations have put together a strategic operating and marketing plan on paper. They us their systems (#2) to communicate with their people (#1) about the details of the plans and marketing using this as a tool to keep the dialogue open between the leader and the employees. The good ones recogonize they have to get the facts, create a database of knowledge and take time to create steps to future growth.

Leader’s Actions. Leaders are the glue that holds everything together. They are totally committed to the mission of the business and through their actions gain the commitment of the rest of the team. They hold people accountable for their actions, celebrate the success together while balancing their own personal responsibility to their employees.