5 advantages of SMEs and how to exploit them

Though we often hear about the benefits of big business, the potential advantages of small and medium sized businesses don’t get as much press. This is particularly surprising as SMEs make up the vast majority of the U.K. economy and are essential to its growth. In reality, small organisations boast an impressive array of characteristics that often give them an advantage over their larger counterparts. With this in mind, we take a look at five of the biggest advantages of SMEs and how entrepreneurs can exploit these qualities to create a successful business model.


The adaptability of small and medium sized businesses is one of their greatest strengths. Most smaller organisations are far more responsive than larger companies, allowing them to alter course and react to customer and market demands far more efficiently. This can be exploited by ensuring bureaucracy is kept to a minimum. Keep clear and simple channels of communication and maintain focus on what your clients want from products and services.

Team spirit

By their very nature, SMEs usually depend on far smaller teams and reduced employee numbers. This often generates a far tighter sense of community and camaraderie and helps employees develop an attachment to the business. This results in staff that are personally invested in the company’s future and will do their utmost to secure its success. Managers can make the most of this by ensuring they foster a sense of belonging and team spirit, maintaining a culture that emphasises a healthy work/life balance and rewarding the team when it performs well.

Closer relationships with customers

The more personable nature inherent in smaller teams also applies to the relationship between a business and its customers. SMEs will normally have far fewer clients on their books, interact with them more often and build stronger links than larger companies. This makes listening to your customers, working to fulfil their needs and ensuring you communicate regularly and clearly, all essential parts of running a small business.

Community based

SMEs are often far more integrated into their communities than larger companies. This is due to the fact that people are able to put a face to a brand, directly witness the impact small business can have on communities and often prefer them to the expansive, inhuman organisations of larger companies. This can be taken advantage of by engaging with your local community, hiring from within its ranks and supporting causes important to the area.

Easier to innovate

Big businesses can finds themselves hampered by size when it comes to innovating. Adapting existing business practices is a lot harder when they have to be altered on a mass scale, as factors like tradition, expense and risk all act against and inhibit change. SMEs are able to shift direction, innovate and take risks in a way that is unthinkable to larger companies. Exploit this by encouraging a culture of innovation, being receptive to new ideas –no matter who or where they come from – and by always looking to develop and expand.

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