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Cape Town - In the business world, opportunities for growth often occur unexpectedly and at short notice.
For businesses of all sizes, these opportunities can often be breaking points, times when positive responses lead to prosperity, explained Ethel Nyembe, head of small enterprise at Standard Bank. Adversely, a lack of action results in business stagnation.
Strangely enough, when a company is large and established, these vital breaking points are often missed, as the company is simply not agile enough to take advantage of the opportunities presented, she said.
“Where businesses are smaller - and often associated with larger companies as suppliers, they recognise the challenges of their big business customers and capitalise on them,” she said. “This results in their customers benefiting from the actions taken, and contributes to their own growth.”
“SMEs by their very nature are driven by the passion of their owners. The success of the company is also often linked to the economic survival of the individual or family that owns the business.
“The key to survival is connected to the SME’s ability to differentiate itself from other small businesses.
“Here, great service and agility make all the difference.”
Symbiotic relationships
These points were reinforced in a recent episode of The Growth Engines TV series, supported by Standard Bank and aired on Business Day TV.
The 18-part series examines the symbiotic relationships between major companies and the SMEs that serve them. The programme highlights the role both have to play in building the South African economy.
“The first brick in the foundation of success is often laid when entrepreneurs select the sector in which they want to be active,” said Nyembe.
Exploit niche markets
“By examining their market carefully, the owner is often able to exploit niche markets that would not appeal to larger established companies. Servicing this niche defines their unique business offering.
“Finally, their agility and ability to create business solutions for larger companies defines who they are and what they do. By becoming indispensable to their customers they build their own businesses.
“Allied to this business approach is that often, progress to the next level of growth for an SME is linked to successfully grasping a breaking point,” said Nyembe.
Distribution of medical supplies
Illustrating these principles is medical logistics company Kushesh Express, an SME featured on The Growth Engines.
Instead of trying to carve a market share in the crowded business courier environment, the owners, Tania and Ashley Mulligan, opted for the niche route.
The field they chose was distribution of medical supplies - materials that require sensitive handling and maintenance of strict delivery schedules to hospitals, clinics and other medical organisations.
Opportunity for expansion
Their opportunity for expansion came when their major customer, Akacia, a manufacturer and distributor of medical disposables, found themselves challenged in meeting their distribution promises in Bloemfontein in the Free State.
Akacia was initially hesitant about having an SME assist with their logistics and gave Kushesh Express small contracts, said Ashley Mulligan.
“Then came the time when the company was experiencing major problems with distribution in Bloemfontein,” said Mulligan. “They approached us, and even though we weren’t totally confident, we realised that this was a breaking point for us.
“It was very important for us to get a good slice of Akacia’s business. I travelled to Bloemfontein and visited every hospital they were supplying.
“I visited supply departments, pharmacy managers and anyone else who had been experiencing issues. We put a plan together that addressed all the sticking points and got all the business for the Bloemfontein area.”
Specialisation in medical logistics
“Specialisation in medical logistics was vital to our success,” said Tania Mulligan. “Because we specialise in the handling of medical products that are subject to breakage and damage, and due to delivery being very time sensitive, we have built this capacity.”
“The systems that we have developed to respond to our customers’ requirements gives them the agility they require in an industry where delivery is often tied to ‘just in time’ (JIT) principles,” said Ashley Mulligan.
Creating a business differential
“The ability of a small business to serve its customer, and deliver on its customers’ promises, creates a business differential that aids both the large and small business,” said Nyembe.
“The ultimate winners, however, are all South Africans who profit through the expansion of economic opportunities and job creation.”
The Growth Engines can be viewed on Business Day TV (DSTV channel 412) on Tuesdays at 21:30, with repeats on Wednesdays at 10:00 and Thursdays at 14:00.
* For more information and to view in-depth articles on the key themes explored on the programme, log on at bizconnect.standardbank.co.za
