Small and Medium Enterprises (SME’s) are businesses that maintain revenues, assets, or a number of employees below a certain threshold. They encompass a variety of make-ups, including family business partnerships and solo entrepreneurs. Family business partnerships involve multiple family members working together to run and manage the business. Solo entrepreneurs, on the other hand, are individuals who single-handedly own and operate their business.
SME’s play a crucial role in the economy as they are the predominant form of business and employment. They contribute to economic growth, job creation, innovation, and overall prosperity in their respective communities and countries. That makes them unique in the way they measure success compared to larger multinational businesses. While multinationals primarily focus on financial returns, SME’s prioritise factors beyond profitability. For SME’s, success encompasses the long-term growth and sustainability of the business, the impact it has on the community, and the legacy it leaves behind.
According to a survey conducted by PwC, SMEs and family businesses prioritise long-term sustainability over short-term profits. A significant majority (88%) of SME’s surveyed measure success in terms of long-term growth and sustainability, compared to only 68% of multinationals. This emphasis on long-term sustainability highlights the desire to build something that can be passed down to future generations, ensuring a lasting legacy.
SME’s also prioritise the well-being of their employees. A study by Harvard Business Review found that SME’s tend to adopt a more paternalistic approach to management, placing the well-being of employees above maximizing profits.
Moreover, SME’s place a strong emphasis on their local communities. The Institute for Family Business found that SME’s are more likely to prioritise environmental sustainability and social responsibility. They actively engage in philanthropic activities and support local charities, fostering goodwill and a positive reputation within the community.
In conclusion, family-owned SME’s have a distinct approach to measuring success compared to non-family businesses. Their focus extends beyond financial returns to encompass long-term sustainability, employee well-being, and community impact. These values are deeply ingrained in the culture of SME’s and play a crucial role in their long-term success. As the next generation takes over, it is vital for them to uphold these values and ensure that the SME continues to make a positive impact on society.
CCO have a strong track record of supporting and working with SME’s, helping them to grow and develop. For more information on our programmes, please get in touch with Robbie Kyle, Operations Manager at CCO – firstname.lastname@example.org