Why SMEs need to be reactive

The business world can change very quickly for a multitude of reasons, so keeping a watchful eye on proceedings is of vital importance.


Small businesses will often be the ones affected most should something change or go wrong so it’s especially important that they are aware of where they are in the market.


The financial situation can change in an instant if something major influences the stock market while smaller businesses will likely see the ripple-down effects of such an occurrence.


Being aware of what is going on in the immediate surroundings can help businesses to know if they might face problems, while they can also act quickly if a competitor should do something.


Product launches, for example, often occur together as rival firms attempt to outdo each other and to take custom from one another.


A product launch is a particularly difficult time for businesses as it could succeed or fail very quickly, especially if the customer is not convinced by it.


The need to be reactive is essential as quick and decisive actions will often limit any negative effects that any market problems could cause.


Should a product fail to sell then production would be cut to save costs, while alternatively manufacturing may need to be stepped up if it is a success.


While it is possible to estimate sales and guess consumer trends, it is impossible to actually know what a customer will do.


Therefore a business must react accordingly in order to maximise the potential gains and minimise any potential losses.


Delivering a fast and reactive service is also likely to encourage customers to return as they will note the way the business has responded.


If finances are particularly tight, failing to react could leave a company in difficulty, resulting in the need to consider a company voluntary arrangement or alternative form of action to rectify the situation.


Reacting to changes in market conditions – regardless of whether they may directly or indirectly affect a business – will leave firms a step ahead of rivals that take that little bit longer to respond.


By Phil Smith


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