In two recent blogs (past few days) I’ve talked about the fundamental importance of Small Medium Enterprises becoming more predisposed than ever to the notion of combining strengths and resources with aligned businesses in order to achieve an increased scale of operation – which in turn can produce overall increases in revenue and profit. And with improved profits comes the opportunity to use available reserves for reinvestment in further resources – to drive/ fuel further scale and growth. Scale builds scale.
If you can’t find willing/ open mindsets in New Zealand to entertain discussions around establishing a “composite structure” such as a merged entity, franchise, cooperating/ buying group, parent company and similar; then don’t hesitate to look outside New Zealand in other countries to hold such discussions. Why ? The issue of over-saturated business unit representation per business category is not unique to New Zealand alone. This issue is in fact a worldwide issue; and one that won’t go away unless the dialogue between particularly SME business owners changes to become more focused on making structural changes of the sort mentioned above.
Put your “feelers” out via LinkedIn to see who has an interest to spark-up such a conversation. Just ask for “expressions of interest”. You’ll be surprised to see how many business owners are in exactly the same predicament as you are – they want to grow, yet face considerable hurdles/ constraints to achieving growth under their own steam due factors such as: availability of investment capital, not knowing how to go about combining forces with other like-minded business owners, etc.
When I broach the topic of achieving a “composite structure” with business people who are open to change, the initial reaction is typically “reservation”. Reservation mostly caused by the thought of working closely with other people to achieve agreed goals. I believe the biggest barrier preventing most people from entering into these sorts of discussions is actually their own psychological conditioning of “keeping to themselves” and not “wanting” to share their knowledge/ expertise with others. In short, they’re typically not predisposed to “wanting” to collaborate.
Again, my plea to the business community around the world is think very carefully about maintaining your status quo – and what that might mean in terms of market share going forward; versus being willing to at least enter a “nil commitment/ expectations” discussion on the pros and cons of forming a “composite structure” of some shape and form with one or more business that appears to offer a good number of synergies to your own business.
If you think the rate at which the number of Small Medium Enterprises entering the business realm is going to slow down any time soon, I suggest that you are mistaken in your estimation and you should think again. The deep probing question that you need to ask yourself is what is going to be my strategy to combat increasing competition going forward – what strategy is going to best assure that my business remains viable and sustainable ?