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Why your business should focus on the SME segment

why your business should focus on the sme segment

There are many reasons why your business should focus on the SME segment. Many companies choose to focus their close contact with industry giants, updating their products regularly to meet these clients demands and expectations. As larger based clients, they can also suffer from larger revenues. The competition among businesses trying to entice SMEs market can often be a lot less aggressive.

It’s not hard to understand why new companies queue up outside the doors of major brands. After all, the bigger corporations often order the more comprehensive packages and young entrepreneurs are often seduced by the potential revenue these orders can bring in. The consideration of adding their logo to your customer list does have rewards. What you need to consider, is at what cost and can you do that in a simple way, for a show perspective, whilst going after a potentially more lucrative option elsewhere.

The fallacy with this school of thought is that SMEs are actually the largest sector in the economy as opposed to large corporations. So if their needs are not given sufficient importance, the repercussions could affect more than just a few companies it could gradually slow the economy and job market of the entire country. SMEs play a vital role in job creation, economic progress, and innovation.

For example, most small companies have few employees and just dont possess the capital or infrastructure required to purchase advanced software.

Being in the SaaS industry, I think software entrepreneurs in particular should start focusing on addressing the needs of this segment instead of devoting themselves to those at the top. These are the companies that can really benefit from accessibility to new digital technology, especially considering that many are using outdated alternatives that may save money in the short-term but compromise on long-term efficiency and revenue generation.

If you’re among those fighting it out to get attention from the big players, here’s why you should focus more on attending to the needs of SMEs:

The silent majority

According to the European Commission, SMEs account for a whopping 99 per cent of all businesses in the continent 85 per cent of new jobs in Europe were generated by this segment.

Not only do they form the largest sector of the economy, these companies are generally headed by dynamic individuals with an insatiable desire to expand. Many of them have fewer than 100 employees giving them an urgent necessity for services that offer a competitive edge.

The biggest asset here is the fact that these companies are still growing, often looking to their competitors for solutions. Take the hospitality industry for example small and mid-sized hotel owners often read reviews by other hoteliers before choosing a property management system (PMS).

Growth potential

Theres a lot of potential within the SME segment providing them with your services could be just the catalyst theyd been lacking.

This could work out to be a very profitable, mutually-beneficial relationship; especially as their company expands and achieves better market penetration, guaranteeing upsells.

Cost advantage

Entrepreneurs that build a strong reputation in this segment often get a lot of attention through word-of-mouth and may see their marketing expenses and customer acquisition costs decrease.

If the product is well thought-out and easy to use, ongoing service and support costs can also be minimized. These savings can be invested back into the development process, paving the way for even better cost-efficiency.

Entrepreneurs must bear in mind that targeting so many customers does demand some effort, and the above mentioned benefits will not fall into place overnight. But there are measures you can take to speed up the process.

Make sure that your product is easy for customers to get started with and that the benefits take centre-stage early on during the adoption stage. Clients love services like live support and it’s great if you can offer that; if not, make sure your support team is knowledgeable and responsive.

Business is never easy. Obtaining the right relationships and customers can be a huge step and bigger isn’t always better. An SME segment focus may be the right move for you.

Aditya Sanghi is co-founder and CEO of



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