SMEs are small and medium enterprises that have less than 200 employees or less than RM50 million annual sales. They are important for Malaysia’s economy because they:
Contribute more than a third of GDP
Provide job opportunities to more than four million workers
Support the development of other sectors such as manufacturing, services and agriculture
Enhance the competitiveness and innovation of the country
SME ADVANTAGES COMPARED TO BIG CORPORATION
Even though generally big businesses benefit from economic of scale, higher fund to invest in high tech equipment, do research or marketing, etc, Small and Medium Enterprises (SME) do have some strengths that give them an edge over large corporations in certain aspects.
Here are some key advantages of small businesses:
Personalized Customer Service: Small businesses can provide personalized and attentive customer service. Owners and employees often interact directly with customers, allowing them to understand individual needs and preferences, resulting in a more tailored and positive customer experience.
Flexibility and Agility: Small businesses can quickly adapt to changes in the market, industry trends, or customer preferences. They have less bureaucracy, making it easier to make decisions and implement changes, which can be crucial in a fast-paced business environment.
Niche Focus: Small businesses often operate in specialized niches. This specialization allows them to serve a specific target audience with unique products or services that may not be offered by larger corporations. This can create a loyal customer base.
Strong Community Connections: Small businesses are often deeply rooted in their communities. They contribute to the local economy, create jobs, and foster a sense of community involvement. This connection can lead to strong customer loyalty and support.
Innovation and Creativity: Small businesses are more agile when it comes to trying out new ideas and experimenting with innovations. Owners are often intimately involved in the business operations, fostering an environment conducive to creativity and fresh approaches.
Quick Decision-Making: Small businesses have fewer layers of decision-making, allowing them to make decisions more quickly. This agility enables them to seize opportunities, address challenges, and pivot when necessary without the bureaucratic processes common in larger corporations.
Entrepreneurial Spirit: Small businesses are often founded by individuals with a strong entrepreneurial spirit. This passion and commitment can drive innovation, customer-focused solutions, and a dedication to quality.
Employee Engagement: In a smaller setting, employees tend to have a closer relationship with the business owner and a greater sense of ownership over their work. This can lead to higher levels of employee engagement, job satisfaction, and a collaborative atmosphere.
Local Sourcing and Sustainability: Many small businesses prioritize sourcing locally, which supports local farmers, artisans, and other small businesses. Additionally, small businesses often have a smaller carbon footprint and can more easily implement sustainable practices.
Lower Overheads: Small businesses typically have lower overhead costs than large corporations. This can lead to increased profitability and more efficient resource allocation.
Inclusivity: Small businesses often have a more inclusive and diverse work environment. They may have fewer barriers to hiring a diverse workforce and can promote a more inclusive company culture.
Direct Impact on Decision-Making: Small business owners have direct control over business strategies, policies, and operations. This control allows them to align the business with their values and vision.
While big corporations offer their own advantages, small businesses excel in creating personalized experiences, fostering innovation, and building strong connections within their communities. Each type of business has its place in the market, and the choice between them often depends on an individual's goals, values, and the specific industry landscape.
