Daily News & Analysis Friday, October 17, 2008 3:34:00 AM Permission to reprint or copy this article or photo must be obtained from www.3dsyndication.com.
The fundamentals for a big enterprise and for a small and medium enterprise remain the same. Both require what forms the core of any business entity, though their importance may vary. The macro and micro indicators for both remain the same, barring minor alterations depending upon the business environment.A few of the key fundamentals which need to be managed are:Seed capital: All organisations need a starting capital, or what is commonly referred as seed capital. For an SME, the amount may be small but its importance is big. However, the present liquidity crunch is a spanner in the works not just for SMEs but for the biggies too.Business model: The success or failure of an organisation depends on the business model formulated by the entrepreneur. Understanding the importance of stakeholders and involving them at the right time for the right input by providing them the right motivator goes a long way in making a well oiled business model. Changes in the business environment call for flexibility on the part of the business model, as companies of all sizes are exposed to all these variables. Stakeholder relationship: Stakeholders form the core of all organisations. Successful entrepreneurs are those who understand this and involve them in every step.Managing employees: SMEs must manage the human element in a way which makes them perform to the best of their abilities. People responsible for making organisational decisions should understand the nitty-gritty of the human factor so that their decisions do not offend employees. Suitable rewards for performers and recognition of extraordinary performances goes a long way in making employees feel a sense of belongingness to the organisation. Entrepreneurial spirit: Start-ups have an entrepreneurial spirit mainly because the entrepreneur brings in that element with his own drive and efforts. As the organisation starts to scale up its operations, this spirit starts to fade. An SME set up should necessarily possess the entrepreneurial spirit as, given its small size, this spirit helps in developing a cohesive unit.Business environment: The business environment is highly competitive. With America and Europe undergoing a financial crisis and emerging econo-mies like India and China on notice, it is important for to understand the shifting sands and align accordingly. SMEs may need to tap newer markets, bring in new products and retrain employees for new jobs.Managing finances: The threat to survival has compelled organisations of all stature to reduce costs by investing optimally, that too in areas which are responsible for bringing in healthy returns to investors. Bigger enterprises may use different tools, techniques and technologies to leverage the same. While SME set-ups may not take the help of technology to that extent, even for them, money saved is money earned. Institute-industry interface: SMEs should take advantage of industry-institute linkages offered by colleges/universities/institutes offering professional courses. These platforms would be the ideal ground to tap new employees and also for testing of new business ideas. Long term tie-ups through projects and research plans would create the right bonding between the academia and industry, which, in turn, would enable SMEs to look beyond their routine prism. Chakraborty is with Knowledge Horizon, a training and consultancy company headquartered in Dubai. He can reached on maniisonline @gmail.com