Inside Business: Small firms show that they're quick on their feet

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The Independent Online
HARD work, strong customer relations, a good product or service and the ability to adapt to changing markets are the keys to the long- term success of small and medium-sized enterprises (SMEs), says a new report.

Janet Weitz, chairman and founder of FDS International, the market research company that sponsored the survey to mark its 25th anniversary, said: "Because you can make decisions quickly and easily, you can grab opportunities as they arise, which can have a very positive impact on the quality and quantity of the products or services you offer."

The "Silver Jubilee Survey" covered more than 200 businesses each having fewer than 250 people and turnover up to about pounds 11m. Another finding was that such organisations found recessions easier to cope with than larger counterparts because they stuck to what they were good at rather than diversifying, and kept overheads low.

Moreover, many of the companies had long been practising the management theories now in vogue at large organisations, such as marketing to specific customers and concentrating on the development and welfare of staff. About half those surveyed had worked with a large share of their customer base for more than 10 years, and many had very low staff turnover.

In contrast to large corporations, which are constantly merging in an effort to get even bigger, owners of SMEs appear to have chosen to stay the same size. Stephen Link, the FDS director who compiled the report, said companies had a core philosophy that allowed entrepreneurial managers and owners greater control and nurtured better customer relationships.

The focus of these long-running SMEs, one-third of which had been in business for 40 years or more, was clearly on quality and integrity and, in many cases, the lifestyle of owner-managers. Most were family businesses and were not for sale. However, there were questions about the future because, although many of the owner-founders and managers were in their 50s, few seemed to have made plans to disengage themselves in terms of retiring, selling or passing on the business.

Ms Weitz added: "In common with many of the respondents , I love running and owning a successful business. It is seamlessly connected with the rest of my life and it's what gives me a buzz."