10 tips to increase the profitability of an SME in Spain

Do not neglect the investment. Although uncertainty is one of the biggest concerns of SMEs today, the Tactiometer study emphasizes that more than half of SMEs plan to grow structurally in the near future. Even if there are doubts about the future, it is very important not to give up on investment because this is the basis of survival and growth. It is a fundamental condition for adaptation and development to changing market conditions.

Consolidate markets. Protect and preserve everything that has been achieved so far. Pay special attention to our like-minded customers and take care of every regular sale; this is the support on which future growth or stability can rely in the event of any unforeseen event.

Diversify. Possibility to expand sales capacity geographically as well as product diversity and customer type.

Digital marketing. It is important to examine the ability to invest in digital marketing within this geographic diversity. It is an excellent opportunity to put our company’s ‘showcase’ in front of any citizen of the world, today and into the future. Of course, expenses need to be evaluated carefully and ensure that they provide a positive return on investment for the company.

“In these times it is very important to invest in strategy, seek advice and ensure that the paths taken are correct. “Many companies often start by reducing their marketing, advertising or training departments, and now it is time to do the opposite: strengthen them.”says the business strategist. Fermocell.

Capturing talent and human capital. In addition to choosing an ideal profile, the business mindset should suggest innovative work logic and relationships in the pursuit of greater engagement, reputation and increased productivity because one of the biggest challenges for an SME today is the recruitment and retention of talent. A company must become attractive to workers not only because of the work it does, but also because of the company’s own philosophy and capabilities.

Efficient organization. Work on the internal organization of our small and medium-sized companies and continue to improve the quality of management, as well as supporting policies that do not hinder the growth of companies.

Innovate. Four out of ten SMEs use less than 70% of their internal production capacity, and productivity growth is closely related to innovation capacity. You need thinking people to innovate in this process. How many people in SMEs are committed to thinking and trying new things?

Digitalization culture. Some people have a fear of digitalization that disrupts this process and increases efficiency. Therefore, beyond implementing technology, it is necessary to raise cultural awareness about digitalization within the company (and dispel the belief that any technology entering the company will eliminate employment).

Incentivize employees economically based on goals. Variable compensation based on target has gained prominence in many SMEs, and data shows that it works. So, can this variable compensation be extended to other parts of the company?

Cost control. Implementing cost control, especially paying attention to the recently increasing material, transportation and energy costs, is of great importance in this period. “Company executives are paid to make decisions based on measured data; they are paid to make decisions by numbers, set goals, track them, and change course if necessary. For this, it is essential to know and understand the balance sheet and income statement and to have dashboards that will make it possible to change the operation of a business and, if necessary, its final result.”points out Víctor Fermosel.