5 foundations for creating a successful small enterprise

Micro, small, and medium-sized enterprises make up for even 99% of all enterprises in Europe, and they secure 2/3 of workplaces in the private sector. Small and medium sized enterprises made up 60.3% of the total income and about ¾ of employed people, in Croatia in 2019. In the challenging and pandemic year of 2020, the number of small enterprises has grown even more. All of this tells us that SME make up for a significant part in the whole market. That is exactly why it is important to know the foundations that a small successful enterprise is based on.

What is a small enterprise?

Definitions of criteria for companies are created based on the number of employees and yearly business. A small enterprise has „less than 50 employees and yearly business, i.e., balance under 10 million EUR “. In comparison, a micro enterprise has less than 10 employees and a yearly balance under 2 million euros. And a medium sized enterprise has less than 250 employees and a balance under 50 million or under 43 million euros.

Why are small enterprises being created?

The most common advantage of small enterprises is market adaptability to the demand and the conditions, i.e., the flexibility of the offer. Motivation is mostly found in security and independence. The person who is the enterprise’s founder is most commonly completely responsible for success. That means that there is a higher chance of earning more yourself in your independent enterprise than you would if you were an employee somewhere else. Everything is possible. That’s why entrepreneurs are more likely to take on risks and challenges. And are usually people that have leadership skills and are constantly motivated by the drive to succeed.

Foundations for a small successful enterprise

# Human resources

Big organizations have their own individual HR (human resource) departments that deal with choosing employees and their satisfaction. In small enterprises, that role is usually assigned to the entrepreneur him/herself. In the entrepreneurial sphere, choosing the right people for your business is of key importance. Although employees can’t usually be enticed by a big salary, a small enterprise has the advantage in the form of community and collectiveness. The business culture that is created through interpersonal relationships is a foundation for the success of a small enterprise and one of the most important links for further growth. Employees are your most crucial resource. So be sure to have that in mind when choosing your team.

# Project management

The coordination of activities in an enterprise is the foundation for progress and achieving goals, and it’s easier to realize that in a small, rather than a bigger enterprise. More control, easier flow of information and communication, but also fewer surprising situations are what make a solid organization possible. The results of project management depend on the person assigned to it, so it’s important to know what key characteristics of a successful project manager are.

# Marketing, services, sales

Regardless of the sector, your small enterprise is in, it always includes either selling or providing services. To get things rolling, it is necessary to start with quality marketing at the very beginning. Considering that your goal is to optimize cost and increase income, give yourself enough time to develop a good marketing strategy.

Developing a good customer experience, in the beginning, is also very important for the success of a small enterprise. Buyers’ experience is more important today than ever before and one positive reaction can launch you towards success, and a bad one can destroy you completely. Personalized marketing and 24/7 service are only small steps you need to take to amaze your users at every step.

# Accounting and book-keeping

Realization of income means that you are on the right path, but in small enterprises, more earnings come with more responsibilities. That is why it is important to set up a good foundation in the enterprise’s accounting and book-keeping, to give yourself a helping hand as much as possible.

If you are a beginner in the entrepreneurial waters, there are two ways to alleviate stress. By hiring an outside service or by hiring an experienced person. Unfortunately, both options are too expensive in the beginning, so you can make things easier with simple software and digital solutions. There are various business solutions that you can implement into your enterprise for an affordable budget and simplify your start in business. Electronic invoice approval, contracts management, supply approval, easier payroll calculation when your enterprise starts to grow, tracking stock or tracking the supply plan and the budget are just some of them.

# Developmental methods

Business development is based on business intelligence (BI). Business intelligence or BI comprises of methods, technologies, and strategies that different companies use to analyze, collect and distribute data and information “. Business intelligence enables a clear display of complex business metrics and data, decreasing cost and invested time. One of the most well-known tools is the Microsoft Power BI which is integrated with a well-known ERP system and enables an increase in success and efficiency. We advise you to ask around and consider using it.

A wind at your back

Small enterprises, together with micro and medium-sized enterprises make the pillar of Europe’s economy. The development of entrepreneurship, progress, innovations, competitiveness and hiring is important to the whole economy; thus, the success of MSP is extremely important. Believe in yourself and don’t waver in the face of initial challenges. It takes years, a good plan, and learning from experience to build a successful small enterprise. Good luck!