Three simple strategies for the mid-market to cash in on lost revenues
By David Mills, CEO, Ricoh Europe
Ricoh Europe, 25 October 2016 - What could you do with €433 billion? To start with, you could construct the entire 77,000km of the US Interstate Highway1. You could even fund not just one but over one hundred missions to Mars2. In fact, Poland’s entire economy generates roughly that figure3 - we could give the entire country a year-long holiday. So imagine a hole in your pocket leaking that amount of money. It defies belief! But new Ricoh research reveals this is actually the total potential revenue Europe’s 75,000 mid-sized businesses (MSBs) are missing out on every year.
So why is this happening? And what can MSBs do to reclaim lost cash?
Simply put, MSBs are treated as the ‘middle child’ by government and lenders. Focus usually centres on providing start-ups with the support they need to transform into big brands. Likewise, large enterprises are often content at being left to their own devices. If we look at the mid-market, the same enthusiasm to enable MSBs to achieve their ambitions is clearly overlooked. An unfortunate circumstance costing Europe’s economic engine dearly.
A staggering 93 per cent of MSBs report barriers preventing them from reaching their full potential. The top obstacles to growth being complex and costly regulation, the struggle to attract talent and finding the right technological solutions.
But rather than wait for the red-tape to come down, it’s time MSBs took matters into their own hands. With €5.7 million on average of potential revenue available, the rewards are plenty.
Top tips for reclaiming revenues:
1. Become a better connected business
To thrive in a competitive market, businesses need agility. Growth ties back to quickly spotting and addressing new opportunities in the market. Whether it’s a mobile sales team reporting back to base or R&D using the latest insight, turning fresh ideas into new offerings requires quick, effective knowledge sharing. Not only is this true internally but with customers as well.
The good news is that embedding new capabilities supporting flexible and mobile working doesn’t need to break the bank either. Cost-effective digital technologies are increasingly commonplace. But our research found that 30 per cent of MSBs have yet to implement any kind of digital technology in their businesses. Where it is deployed well, the competitive benefits are clear. In fact, 65 per cent of digital adopters say technology has helped them outpace competitors.
2. Start by saving money where it counts
In addition to increasing flexibility, the move from paper-based working to all-digital operations significantly cuts operating costs. Digitising processes such as invoicing and cash-flow takes the headache out of chasing the paper trail and frees-up employees’ time. This improves productivity and the speed of payment, and also cuts the costs of producing, distributing and managing invoices.
Digital solutions like e-invoicing and office automation support growth by making cash flow management cheaper and more effective. Reducing paper and energy consumption also frees resources to support the business elsewhere.
3. Build on solid foundations
With complex and costly regulation rated as the top obstacle to growth, it’s clear that MSBs crave simplified compliance. The easiest way is to work with a partner able to bring your house in order for you. Seek out pre-certified solutions or service packages to stay ahead of changing regulations.
For example, with fast-moving operations and staff working in the office, at home and on the road, customer devices and data need to be kept secure. Upcoming EU regulation will soon impose substantial fines for data breaches capable of crippling even the largest of organisations. As a result, MSBs need tight control over who has access to their data. Finding a solution which unlocks the benefits of flexible working without compromising security measures is crucial.
There’s no denying Europe’s MSBs are intensely ambitious. Almost 40 per cent plan to IPO in the near-future. Whilst it seems they’ve been dealt an unfair hand by governments and lenders it doesn’t mean these ambitions should go unrealised. A smart approach to technology goes a long way in helping MSBs take their share of the €433 billion available.
1US Interstate Highway System, What It Costs - 2016
2How much does the mission cost?, MarsOne - 2016
3World Economic Outlook Database April 2016, International Monetary Fund - GDP Poland, $474.893bn 2015