Introduction
Over the last decade, countries all over the world have noticed an increase in small and medium sized enterprises. Rahman, Yaacob and Radzi (2016) explain that this is due to better policies and technological advancements that continue to influence the digital economy. The influx of these small and medium sized businesses has also created other unforeseen opportunities such as the need for professionals who can help such businesses thrive.
It is critical to note that large multinational organizations also have think tanks that help them thrive. The fact that these smaller organizations cannot afford such think tanks creates a gap. The gap can only be filled by innovative and more affordable consultancy firms. This essay presents a business project that seeks to offer these services to SMEs across the world. The firm will be primarily virtual to allow access to data and engagement with companies from different parts of the world.
Project Selection/Objectives
Business projects have to be carefully considered in order to ensure success. The selected business project is the development of a small and medium sized enterprises (SME) consultancy firm. The main aim of the business will be to advice SMEs on what they need to do to sustain and improve their bottom line. Further, the firm will link SMEs to potential investors and partners at a premium rate. Critically, there are several SMEs that are looking for different services from a consultancy firm. Often, businesses believe that they are only in need of advice on how to get, for instance, more sales. It is prudent to note that the SMEs also need training on human resource management, time management and even communications skills to achieve their objectives. All these will be included in different packages that will be offered to the SMEs.
Organizational Structure
The proposed business will be led by two co-founders. Under them will be six project managers who will lead the finance and banking, technology, creatives, investment, telecommunications, and recreational departments. Each of these departments will have two officers and two assistants. Further, reporting directly to the project managers will be assistant accountants. A corporate finance manager will report directly to the co-founders.
It is also important to note that the company will have a board of directors that will be drawn from different companies and sectors. The co-founders will report and be guided by the Board. One of the reasons why a board is critical in any business is the fact that it provides a wider view of operations. It also keeps the founders in check as many of the members usually have more experience than the founders. The issue of accountability is also confirmed and assured through the existence of a board of directors.
Type of Project/Time/Budget/Specifications
One can argue that the project is a consultancy think tank. The time needed to create the consultancy is two months, which will cater for registration and getting all the necessary paperwork done. It is important to note that the company will need an additional three months to hire the right personnel based on the organizational structure presented. It is critical to note that this structure is expected to change over the years based on the needs that will arise. The approximate budget needed for the initial set-up is USD$30,000. This will cater for the registration of the business, office set-up, and the salaries of the staff for the first 6 months. It is critical to note that the company, will, however, break-even after two years of operations. After the initial six months, the company will need cash injection of $2000 per month to supplement the expected deficit until the company breaks-even.
Project Team’s Tasks
It is important to note that the company will have six project types which will be referred to as departments. Critically, the projects are finance and banking, technology, creatives, investment, telecommunications, and recreational. Each of these departments will handle individual accounts, which can be referred to as “mini-projects”. The set-up of the team gives central departmental power and authority to make choices to the project manager.
Therefore, the project manager in charge of finance and banking has the decision-making capability only within his or her department. The role of the manager, therefore, will be to oversee the implementation of the company’s objectives within his or her department. The manager will also be a signatory for that specific department’s accounts. The two co-founders will be the other signatories, with each department having a unique account number for purposes of accountability and easy tracking.
Other tasks that will be associated with the project manager include the assigning of duties and also sourcing for new projects within their departments. Therefore, all project managers will have some form of marketing skills to help attract clients within their sectors. It is also important to note that the project officers will be tasked with the day-to-day planning of all activities. Each officer will handle an account or two, depending on the number of clients in that specific department. These officer’s roles will revolve around research, developing strategies for the client/project and also implementing the agreed upon approach.
They will be guided and report directly to the manager. The assistants will help the officers at all and every capacity. The assistant accountant will be tasked with handling the expenses of that particular department. This will be vis-a-vie their annual budget and targets achieved and those missed. The position will report directly to the manager and indirectly to the corporate finance manager.
Below is a general work schedule that will be customized for each department.
Project Manager’s Tasks and Responsibilities
As stated, the project manager will be tasked with oversight and management of the departments. It is crucial to note that whereas one officer under the manager will be accountable for one or two client accounts, the manager will be held accountable by upper management for all accounts under his or her docket. Therefore, the manager has to ensure that all clients in that specific sector are happy with the firm’s work. Further, the manager is tasked with sourcing for clients in the market. As explained earlier, this means that the manager should have marketing and communications skills in order to attract clients. Even though the officers will also be charged with this, it will primarily lie within the mandate of the project managers. Consequently, there are administrative and logistical duties that will also be overseen by the project manager.
Five Possible Risks and Solutions
The first possible risk for the business is unhappy clients. There are numerous things that can dissatisfy a client who is interested in getting the best advice to help improve their bottom line. Etemad (2020) explains that the most common complaint from clients is poor quality of work. Work quality in a business consultancy set-up can be affected by various things including poor or inadequate research, unqualified personnel and also under-utilizing or misusing resources.
Additionally, clients might be unsatisfied with work done if there are frequent missed deadlines. Etemad (2020) notes that it is important for firms to work within the deadlines of their clients. This creates a feeling of trust for the customer, and in turn, enhances loyalty. Issues such as misunderstanding the assignment at hand and cost overruns or poor budgeting will also lead to unhappy clients.
A possible solution for the issues presented is the hiring of a qualified team. The staff is a critical aspect of the business as they will interact with the clients on a daily basis. Further, the identified staff have to be professional enough to handle crises, as all businesses face crises at one point or the other. The management should ensure that all staff receive frequent training on professional skills that are needed in the business as well. A second possible solution is the creation of viable deadlines with the clients. Indeed, there are instances where the clients expect unattainable deadlines. It is important for the manager to discuss the viable options for such urgent tasks. This will ensure that both sides have enough time to both submit work and have it reviewed.
A second risk to the suggested business is cybercrime. As earlier stated, the company will seek clients from around the globe. Technology will make this possible, however, there is significant risk in losing data due to digital breaches. The primary concern for data breaches is the loss of valuable client work and data. This can set back the company, if a task was in progress, and more importantly, will make the client’s position vulnerable. Further, a breach will also destroy the reputation of the firm. Companies value their data as they form part of their competitive advantage. Therefore, when lost, they would ideally not want to continue with the business arrangement. In worse case scenarios, the clients can even sue the company for the loss of the data.
There are numerous things that the company can use to protect the data of their clients. First, the company has to ensure they have a reliable anti-spam software. This will make it harder for anyone seeking to hack their systems. The protection software will also notify the ICT personnel or project manager when the system is about to be hacked. This helps both prevent, monitor and fix any of the loopholes in the system. The staff should also be trained on how to create strong passwords. This will also ensure that their computers are safe from hacking. Critically, the company has to ensure the intranet works and that it is the only allowed mode of file transfer. This solution will ensure that no files can be shared out of work. The company should also have back-up and drives. This should ideally be connected separately from the server.
A third possible risk is the unpredictability of markets. The core clients the company will target, as mentioned, is the small and medium enterprises. These companies go through significant challenges due to the nature of the business sector. For example, this year (2020) SMEs have suffered both financial and business limitations due to the impact of a global pandemic. Additionally, changing markets can also affect business. These markets can be affected by politics and even socio-economic implications of the different countries. In the same way one has to consider market entry strategies in brick and mortar businesses, the firm also has to consider the same options in the digital economy. There are various trends that the project also has to consider as they think about the implications of political and socio-economic pressures in the different countries. For example, the management has to consider the level of disposal income in SMEs in a specific country vis-a-vie the bargaining power of their companies/SMEs.
There are few direct ways in which the company can mitigate this risk. However, indirectly, the management has to ensure it does quality research on the markets that can be penetrated. This research will include checking socio-economic and political scenarios within the identified countries. Secondly, the company can create flexible payment plans for their different clients depending on where they are coming from. For example, clients from third world countries might get more flexible payment plans compared to first world companies. This is due to the high risk involved due to unstable political conditions in those nations. Critically, the discussion on which country should get which type of payment plan should be guided by research as well.
Fourthly, a client who does not know exactly what they want can be a high risk for the consultancy business. It is crucial that all clients brought on board know what they want from the company. This ensures that time and other resources are not wasted. An example can be given to explain further. A client who says he or she wants advice on how to better their branding will be entitled to strategies focusing on just that one aspect. Therefore, the firm will only charge for that consultancy. However, it is expected that the solutions that will be provided will also need further implementation or advice. However, due to the specific nature of the contract signed, the consultancy will not be able to further the engagement without extra pay. On the other hand, there are some clients who add more tasks to their initial work requested. This leads to confusion and misunderstanding, which can also lead to poor quality work.
One way in which the stated risk can be resolved is through the development of a concept paper template. This template will then be shared with the client, who will be asked to fill in the information. It is important to note that the sections of the concept paper will be determined by the industry the company is in. However, all the templates have to be as comprehensive as possible. This will ensure the client fills in sections that they do not even think might be necessary for the job. The manager can then create a work plan that shows what should be done and an agreement made with the missing links in mind.
Lastly, the company runs a risk of high employee turnover. This is a critical risk for all businesses. Sakhdari, Burgers and Davidsson (2020) note that there are two main causes of employee turnover. The first is overworking one’s employees. When the employees feel overwhelmed, they will opt to leave for better places. Secondly, underpaying employees will also encourage them to find work elsewhere.
This is why it is common to find overworked people being paid extremely well in order to maintain them. On the other hand, it is also common to find underpaid people being given freedom or less work in order to retain them. The issue of employee turnover is critical as it also affects productivity rates. It does this by, first, overworking the staff who remain after one member of the team has left and before the member is replaced. Secondly, it negatively affects production due to the issue of talent management. The firm has to ensure all staff qualify for the task at hand. Managing this talent requires both hiring and retaining the staff.
One way of resolving this issue is through the development of proper human resource policies. These policies are important in protecting both the company and the employees. The policy will denote how employees should be treated, how the work environment should be, and the relationship between manager and officer/assistant. Issues such as sexual harassment and bias/prejudice should also be included in the policy.
It is important to note that employees should be trained on the policy and their rights. It should be mandatory for staff to get this training immediately they join and also periodically after that. This will ensure that everyone understands the expected behavior within the organization and between themselves (staff). It should also be clearly noted that all employees have a right to complain about mistreatment even if the accused is a supervisor. Towards this end, therefore, the company must have different ways in which employees can report such.
Conclusion
In conclusion, the creation of a business that offers consultancy to small and medium sized companies is a valid idea due to the increase in such companies in the last few years. The business project, however, has to be strategically implemented in order to be successful. The suggested business will have two co-founders, six managers, twelve officers, twelve assistant officers, six assistant accountants and one corporate finance manager. The assistant officers will also double up and take up ICT and digital roles. It is also important to note that there are various risks that are expected in such a business. One lesson learnt is that business plans have to be comprehensive in order to identify gaps and resolve them before initiating the company. Further, one can argue that the development of a budget and financial plan is a key lesson learnt in ensuring proper planning in business management.
References
Rahman, N. A., Yaacob, Z., & Radzi, M. R. (2016). The challenges among Malaysian SME: A theoretical perspective. World Journal of Social Sciences, 6(3), 124 – 132.
Etemad, H. (2020). Managing uncertain consequences of a global crisis: SMEs encountering adversities, losses, and new opportunities. Journal of International Entrepreneurship, 18, 125–144.
Sakhdari, K. Burgers, H., & Davidsson, P. (2020). Alliance portfolio management capabilities, corporate entrepreneurship, and relative firm performance in SMEs. Journal of Small Business Management, 2-14.