In Malaysia, small-to-medium size businesses (SME) make up over 95 per cent of the country’s businesses in total. Therefore, it’s in everyone interests that they grow, thrive and flourish.
With this in mind, top executives at AmBank designed a blueprint initiative to help get SMEs on their feet and reach the next level by providing the right support, resources, and guidance that would empower them to build a solid foundation.
Sadly, around 80 per cent of new start-ups in Malaysia fail to make it past the three-year mark.
However, AmBank leaders are striving to transform that worrying statistic into one that puts Malaysian businesses on the map and provides the nation’s consumers with an abundance of high-quality products and services.
Speaking to host Roshan Thiran on the AmBank CEO Chat series, Datuk Sulaiman Mohd Tahir, the Group CEO of AmBank Group, spoke about the importance of helping SMEs do well.
He believes that, when a home-grown business does well, it’s a win-win for all involved.
“We need to make sure that more SMEs can become successful. To us, the more successful they are in doing their business, the more we can do business with them. So, it becomes a question of, ‘how do I make the customers ready to take on products and services from us?’” he said.
As more and more companies pop up throughout the country, one question that leaders and entrepreneurs might ask is: How can my business hit the ground running? Certainly, there is a need for urgency, but at the same time, patience in learning is required if businesses are to stand any chance of scaling and drawing in higher revenues over time.
Businesses that are able to build solid foundations will be much more likely to go far beyond the three-year mark and enjoy the kind of success that eludes the 80 per cent of businesses that try to scale too quickly.
As Sulaiman puts it: “Being in an SME is very competitive and, out there, there’s a lot of businesses starting up. Some might be there three months, some might go after one month, and so we look to see how we can make them successful from day one.
“The AmBank BizRACE is all about finding out how we can help make SMEs successful – it’s very simple. We want to give them opportunities, and there’s the view that while SMEs come in with a product or service that’s good for the first one or two years, as they scale up, it becomes a different process altogether.”
One of AmBank’s core objectives goes beyond helping SMEs to look after their financial interests, but to give them the tools and support needed to succeed over the long-term instead of providing them with short-term solutions.
Of course, SME leaders need to be aware of where the focus should be and to determine what is truly important to their organisations as they look to scale up, develop and grow.
According to Sulaiman, it boils down to looking at the business more deeply, going beyond the returns on investment or bottom line.
He said: “The biggest challenge for any SME is about developing the new business idea, the new business model, and also about understanding what makes the business tick. How do you, as an SME, sustain the business, and how do you get better?”
Many SME leaders might look at conventional ways to maintain their edge over the competition, such as lowering their prices or offering bog-standard promotions which can help to bring customers in over the short-term.
However, nowadays customers are looking beyond the price structure of companies and watching out for the value that organisations can offer them in return for their continual patronage and loyalty.
“There are a lot of competitors out there and you can play a price game, which is OK, but the margins will kill you and, over time, you’re delivering value at more than your pricing before you realise it. So, you can be competitive without sacrificing your price through providing value to your customers. Or is there a way to drive efficiency?” Sulaiman asks.
As AmBank BizRACE works with SMEs to cultivate a deeper understanding of their business, leaders are encouraged to look past the conventional short-term gains and fixes to ask the question that many leaders tend to forget: What are we doing that truly gives the customer value, so that we can give them the best experience and keep them coming back?
Sulaiman explained that it’s this kind of forward-looking mindset that AmBank strives to instil in its SME partners: what you can give to your customers is your investment in them. If the investment is great enough, the returns will be even greater.
“That’s your edge – it could be your location, it could be your product, it could be your delivery, the convenience to customers, or the quality of your services. Those things need to be differentiated in a way that helps you to stand out.”
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