5 strategic advantages of SMEs

| June 19, 2019

SME is an acronym for small and medium-sized enterprises which make up a large majority of businesses all over the world. In the EU, for example, they represent a total of 99% of all businesses.

While most business owners dream of growing and expanding their companies into huge global corporations, the fact of the matter is that with the increase in size, a company loses a lot of strategic advantages that come with being an SME. However, it’s also worth mentioning that these benefits aren’t limited to business owners. In fact, SMEs have many positive effects on the consumers, employees and even the community as a whole. With that in mind, today we are going to take a look at just what those advantages are, with five strategic advantages of SMEs.

1. Satisfying specific niches

Because of the fact that they mainly operate on a smaller scale, SMEs have the ability to identify unique local or other specific needs of customers that large corporations may not notice or even care about. This puts them in a unique position to find success and thrives in areas where there isn’t much competition; however, it’s also great from the perspective of the customers and the community in general as people otherwise wouldn’t be able to get those specific products and services. This further builds a positive image around the SME and makes people like and trust them even more.

2. Flexibility

In addition to the ability to satisfy very specific demands, SMEs also have the advantage of being able to efficiently adapt to any changes that may come their way. Unlike big corporations, they don’t have huge hierarchies that can take months to come to and implement a decision, which stands in the way of change. On top of this, their smaller teams of employees are able to take in the information they receive more easily and incorporate it into the way they do business. Employee job descriptions can also be very flexible on their own, as most of them will often branch out of their position and bring more value to the company.

3. Favourable funding options

Another strategic advantage of SMEs is that they can have accessibility to many different favourable funding options. Most banks provide small and medium businesses with many benefits that large companies can’t apply for, including several different loan programs tailored specifically towards them. SMEs can also opt for many different asset finance options, which can be very beneficial to their long-term growth and give them access to quick and easy capital which won’t burden their credit too much.

4. Meaningful bonds between employees

Big companies often have thousands of employees that can work from different cities or even different departments and never actually meet. On the other hand, SMS’s have a significantly smaller number of employees that often work within the same workspace and are able to build strong and personal bonds with each other. However, to foster this, SMEs have to put in a lot of effort into making sure that their workspaces are motivating their employees to work and interact with each other. This will ultimately build positive team spirit that can be extremely beneficial to their overall productivity and efficiency. A smaller number of people will also have an easier time relating and identifying with the overall goals of the business, which will make their work more meaningful.

5. Personal interactions with customers

One of the biggest goals of every business is making sure that their customers are satisfied. Big businesses can often struggle with this since the huge number of business interactions don’t allow them to truly interact with their customers. On the other hand, SMEs are able and usually even required to interact with their customers on a regular basis, which allows them to fulfil their specific needs and preferences as well as get instant feedback on what they may be doing wrong.


SMEs make up an integral part of every modern economy. And while successfully running an SME is by no means easy, if they are able to utilise the advantages listed here, they can achieve huge success and have a lasting positive impact on the community as a whole.