Continued economic growth is expected for Latin America and this has led small and medium-sized enterprises (SME) to see changes largely in their favor. According to Brother International Corporation’s fourth annual “Vision SMEs” survey, the first economic expectations of the 801 executives surveyed between Costa Rica, Panama, Colombia and Ecuador, were mostly positive. 74% of respondents expect their countries’ overall economy to improve in 2018, and within the same group 25% expect it to be “much better.” RACO Investment is a company catering to SMEs in Costa Rica and Panama, and its founder, Randall Castillo, discusses the three topics all SME leaders should know.
With improved prospects, many business owners and managers are making decisions to benefit their companies in the short and long term. In asking about the strategy they see best in the face of the current economic climate, 64% responded that they should ‘invest now’ to give their businesses a competitive advantage, while only 34% responded that businesses should ‘save’ for their stability in the event of a future economic downturn, according to the same Brother survey.
While most of the executives interviewed in the Brother survey responded that they prefer to invest now to gain a competitive advantage, only 18% said they planned to direct that investment in hiring new employees. In asking participants to give their opinion on the issue, business leaders noted a desire to improve the productivity of their current employees before hiring new staff, and described how successful investment in technology can enable them to grow their businesses while maintaining the same number of employees. However, any investment in technology must take into account the cost of training employees so that they can implement and manage the new technology.
Through interviews with innovative SMEs, several important keys have been discovered to help business managers make the right investment at the right time. These are three vital questions that entrepreneurs have to ask themselves, and answer, to become successful. The first is to determine what separates the business from the competition. In order to solve that question, SME leaders must invest in tools and technology that allow your business to stand out.
The second is to identify the SME’s primary weaknesses. Asserts Castillo, “Once businesses understand their weaknesses, it’s time to spend money on systems or processes that can lessen the impact of these soft spots.”
The third question is one that is constantly at the heart of strong business growth – how and where to reduce costs. SME leaders must reduce spending in areas that will have minimal impact on the bottom line so you can invest in other areas of your business.
Adds Castillo, “To overcome the challenge of staying up-to-date with new technology while maintaining control of labor costs, SME leaders must always be ready to consider alternative solutions, such as outsourcing technical work or hiring part-time employees to meet the demands of innovative solutions as their business grows.”
While predicting the economy and making decisions regarding investments in technology and human resources can be risky, even in good times, smart business leaders know that the cost of inaction is often higher.
SMEs believe that 2021 will be better and they’re willing to make investments that strengthen their businesses, especially by acquiring technologies for customer service, mobile devices and cloud computing services. Although there is a clear interest in investment in technology, almost half of respondents (49%) admitted to being overwhelmed by the number of technologies available to help run their business. And 73% admitted to pretending, at least once, about knowing more than they really know about operating an element of their company’s office technology.
Concludes Castillo, “Today there are a number of sophisticated tools, solutions, and software readily available to small businesses. There are plenty of sources to be able to gain an understanding of the challenges and to learn more about easy-to-use, efficient, accessible, and tailored office technology to meet specific needs, giving small businesses the opportunity to truly drive performance and facilitate their growth.”