The Evolution of Small and Medium Businesses

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Small and medium business fuel the growth of modern economies. According to World Bank, formal SMEs contribute up to 60% of total employment and up to 40% of national income (GDP) in emerging economies – significant figures which could go much higher if informal SMBs are included.

Today, some of the most successful and progressive corporations started out as a small business and operated on a shoestring budget. McDonald’s, for instance, began as a hamburger stand in San Bernardino, California. Apple was founded in Steve Jobs’s adopted parents’ garage. Nowadays, these companies are two of the most valuable brands today.

This means that the next multibillion dollar could be that small business just down the street in your small town.  But how did a traditional brick and mortar store of the past century evolve to a digital and social enterprise today? Let’s find out.

From Corner Shop to Online Store

Since the explosion of dot-coms and the internet in the early 90’s, the number of business migrating in the online realm has grown ever since. Some have simply established a website, while many others have completely taken down their physical store to save on rent and other costs inherent in keeping a traditional business.

Today, many SMBs managed to create an online persona not only through websites but social media as well. Facebook Businesses is one of the platforms by which many SMBs choose to establish their brand name, acquire new customers, and grow their business without having to spend a single dime for a physical establishment.

Traditional to Digital Marketing

Small businesses no longer need to think of newspaper, flyers, billboards, or magazine ads. Instead, it is about designing digital marketing campaigns that leverage new technology – websites, social media, email, and apps – to reach the right customers at the right time.

Not only is this thought process resource-friendly, but this approach to marketing can save money and be more efficient concerning the return on investment.

Today’s Digital Marketing is driven by the rich amount of data that is readily accessible – coming from billions of customer interactions, gigabytes of scanned documents, analytics from search engines, metrics from marketing services, blogs and articles on the internet, and tweets about industries. All this data makes modern marketing much more precise and better at achieving greater results.

From Cash Register to Automation

20 years ago, fewer business owners had experience with mobile payments and touch screen product access in retail establishments. Along with other thriving technologies, the growth of modern Point of Sale (POS) systems has provided modern SMBs a significant advantage in optimising their sales volume and maximising their customer experiences.

From allowing customers direct access to on-site products and numerous payment options, POS systems help SMB owners run their business efficiently and cost-effectively. Automation, which allows for inventory control measures, has all changed the way tracking and ordering inventory is done today.

From Customer Service to Customer Engagement

Way back then, small and medium business owners set the hours that they would be available to answer inquiries and follow-up on customers’ questions or issues.

Now, with 24/7 access that social media platforms offer customers, they can now interact with the business they follow anytime and anywhere they want. This means that SMBs should always stay connected to see if some comments or issues must be resolved immediately.

In today’s social media age, a single derogatory comment can quickly damage a brand’s reputation. This is why customer service has evolved into customer engagement to ensure small business are always available at the client’s whim. With an incredibly competitive environment, achieving great customer experience is paramount for SMBs to remain on top of their game.

 

 

Source:

http://www.worldbank.org/en/topic/financialsector/brief/smes-finance

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