Globally, SMEs play a central and pivotal role in economic prosperity and development with growing evidence to that effect. All thanks to their entrepreneurial spirit, private ownership, and their flexibility to react and adapt to changing societal trends. SMEs continue to contribute to the sustainable growth and development of World economies.
We all hear the acronym “SME” thrown around us quite a lot. But aside from knowing the acronym to stand for “Small-Medium Enterprises,” many know nothing more about how they are genuinely classified. It’s important to realize that some who are themselves truly SME operators and owners know not more than average persons. Tell them to explain the concept of “SMEs” further than what the words stand for, and they’ll become stuck.
However, in this article, you’d learn what SME means, the metrics for their categorization, and their importance to national economic growth and prosperity globally. Additionally, you’ll learn the importance of outsourced courier services to SMEs, how SMEs can get the most value out of their courier services, and so much more. With this in mind, buckle in for the smooth ride!
Definition of SME
Firstly, SMEs short for Small and Medium-sized (or Mid-sized) Enterprises refer to businesses that have less than or within the range of nationally stipulated number of employees, the value of assets, or level of revenues. Therefore, which and what business makes up an SME is a matter of different interpretations from clime to clime with each nation adopting whichever suits her administrative convenience.
SMEs in the EU
For instance, in the EU, a Small Enterprise is one with less than 50 employees and annual revenues of €10 million or fewer. Medium-sized businesses are ones that have less than 250 employees and annual revenues of €50 million or lesser. However, the US majorly classifies SMEs based on assets value; they consider those with $10 million or less, as small enterprises and those with assets above $10 million but lower than $50 million as medium-sized.
SMEs in UAE
On the other hand, in the UAE, SMEs have played prominent roles in diversifying the UAE’s economic system since the 2009 global financial crisis. They’ve helped foster creativity & innovation, encourage knowledge-based business modules, and driven economic changes.
More so, they’ve continually proven to be the engine and building block of the economy, accounting for the highest number of businesses in the marketplace. Also, they collectively hire more people than the big companies combined, besides contributing more to the government’s tax revenue. Small-medium enterprises in UAE account for 94 per cent of all companies and 90 per cent of the workforce, according to the Khalifa Fund for Enterprise Development.
Specifically, The State of Small & Medium Enterprises (SMEs) In Dubai Report, stipulates that SMEs represent 95% of business establishments in the Dubai Emirate. So, this accounts for 42% of the workforce and with contributions of around 40% to the GDP of the Dubai economy. The report considers a business with 9-35 employees and a turnover of AED 50 million in the trading sector as a small enterprise. For manufacturing, the requirement is 76 to 100 employees and a revenue of AED 100 million; while in the services sector, it’s between 20 and 100 employees and annual revenue of AED100 million. Any business below the threshold is a micro-business in the Emirate.
Companies with 36-75 employees and revenues of AED 250 million in the trading sector considered medium-sized. In manufacturing, the requirement is 76 to 250 employees and a turnover of AED 250 million; while in the services sector, it’s 101 to 250 employees with a turnover of AED 250 million. The report considers all enterprises above the threshold as a large company.
SMEs vs. Heavyweights
As you well know, one of the significant distinctions between SMEs and large corporations lies in financing. New SMEs often usually only receive funding from the personal savings of owners, gifts or loans from family members and close associates, small business loans – and sometimes, access to the small-medium and enterprise loan facilities set aside by the government for SMEs development. On the flip side, large businesses can usually secure financing from outside investors and venture capital firms. The implication is that larger companies have vast resources with which they can pursue market dominance. Because of this, SMEs are always on the run to avoid being edged out of the market by their larger competitors.
Despite their leaner budgets as against the enormous resources of giant corporations, customers expect the provision of quality and satisfying services at the same competitive prices that larger corporations offer.
Therefore, it is of crucial importance for SMEs to strive at crafting new and innovative ways of matching. And perhaps if possible, exceeding – the performance of more prominent companies if ever they want to remain relevant in the market.
Comparatively, modern and cloud-based technologies today have levelled the competitive field between SMEs and larger corporations. So, global e-commerce giant, Amazon can afford to run an in-house efficient delivery team. But SMEs can’t afford such expensive, and dynamic luxury-make recourse to outsourced courier services like ViaMe who offer cheaper but efficient delivery services. These outsourced courier companies, with a combination of their extensive delivery experience and modern technologies, offer effective delivery services to SMEs. Their service is one that is comparable with those provided by the in-house team of more prominent corporations, levelling up the delivery process competition between the different sizes of enterprises.
Importance of Outsourced Courier Services to SMEs
Now, let’s highlight and examine some prominent importance of outsourced courier services to SMEs’ survival and competition:
• Delivery Speed
Not most SMEs can afford the considerable cost of amassing and maintaining efficient delivery technologies, including GPS-optimised tracking devices, Point of Sales devices, bikes, vans, and many more others that aid speedy delivery.
On the other hand, an outsourced courier company combines its expertise in the delivery business. It uses its knowledge of shorter and faster routes alongside modern technologies to deliver packages to SME customers, with astonishing speeds.
Your item never changes hands during the entire delivery process since it’s just one party that’s handling the process. For example, a dispatcher of the courier company gets hold of your parcel and delivers it to its destination wherever that might be — in the process, increasing not only the speed of delivery but the safety of the package too.
Notably, a significant number of these service providers incorporate professionalism and speed as part of their trademarks in the industry. So you can be confident your deliveries wouldn’t lag. Undoubtedly, fast deliveries boost customer confidence in your brand, inducing sales to go up and with it, more revenue for the business.
Definitely, this is one big plus for SMEs that use outsourced courier services.
• Low & Affordable Costs
Often, SMEs try to do everything by themselves in the course of their business. Falsely, on an unfounded notion that it is usually perhaps cheaper and more valuable to keep operations in-house than outsourced. Unfortunately, most often than not, it isn’t always true.
On a norm, it’s usually financially imprudent for an SME (except for a few) to amass and maintain a fleet of efficient delivery vehicles for the company. Not only would you have to purchase the vehicles, but another burden would also be the cost of auto insurance and the hiring of delivery drivers. Plus, even if an SME sets out to amass such capabilities, the dynamism and changing nature of the delivery process and its technologies would often make the delivery venture unprofitable in the long run. For instance, say an SME amasses a delivery fleet of vehicles and gadgets with a loan. It probably would take lots of time before the business breaks even on the delivery gadget investment. All this depends on the rate at which they service clients and whether they outsource the fleet to other SMEs in need of logistics services. Then a few years later, when all investment hasn’t recouped, newer and faster technologies arrive with consumer expectations attuned to those more modern technologies. Ultimately, this would most definitely draw in a considerable loss for such an SME.
However, the usage of outsourced courier services by SMEs helps cut down overhead costs and budgets. SMEs have an affordable option to opt for with outsourced courier services. Most courier services on the market charge per mile at competitive rates that favour and save the SME huge costs.
• Customer Reliability
Considering current realities like the continual e-commerce boom, customer experience, and service reliability have become more important than any short-term view of cutting costs. Getting the most value for an evolving SME thus usually means thinking long term than short.
Delivery companies offer a range of reliable services such as full track and trace and 24-hour support to customers. In turn, this helps you -the SME- to build trust with end-users and aid customer retention. No matter the seasonal demand, they help to balance the highs and lows, adding on-demand value to the delivery process.
More so, most courier services offer package tracking services that enable you to watch your package until it gets to its destination. Not to talk of the guarantee of unceasing delivery of products to your clients, with no limitation to SMEs’ operational hours.
In every sphere and sector of human endeavour, there’s always a probability of an unfortunate and unforeseen happening. Same with the delivery business, it’s necessary to protect a package due for delivery in case of unforeseen eventualities. All things considered, courier companies are most often insured entities because of their industry than you’d find of SMEs.
Thus, outsourcing courier needs help transfer liabilities and risks to the courier service provider. In turn, SMEs make additional savings on costs they’d otherwise have incurred in insuring and securing the products if they were the ones doing the delivery.
Therefore, outsourcing to courier companies helps SMEs recoup whatever they lose in the hands of the delivery companies during the delivery process.
• Ease of Use/Time Management
Consequently, one of the importance of outsourced courier services to an SME is the time conservation and energy that it affords business. As experts in what they do, courier service companies save SMEs quite a lot of time that the latter would otherwise spend on delivering parcels to customers. On the other hand, SME employees focus more on their primary job duties instead of getting dragged into the customer fulfillment process. They afford you time and resources to focus squarely on the core of your business, enhancing more efficiency, productivity, and profitability. All of these are the pillars of a successful company’s success story.
The ease of usage of modern courier services nowadays is manifest by the various online management tools they offer. In return, it allows their SME clients to manage their clients virtually. In the end, it saves both parties lots of time and stress with the elimination of the hitherto required exchange of delivery paper works.
SMEs can now pick a package, schedule a delivery, and so much more using these online tools provided by courier companies. No longer does anyone need to visit the courier company’s location to make these happen or spend considerable time on the phone planning everything.
How an SME can get the most value out of their courier services
So, now that we’ve identified and made you realize the importance of outsourced courier and delivery services to your SME, let’s look at the rest.
• Consider a reseller
Consider using a reseller if you operate an SME that’s so small that the entire costs of packages you deliver are often significantly lesser than the delivery billing of courier services, or an individual looking at small C2C delivery.
Resellers are businesses like you who have an account with mainstream courier companies.
They aggregate packages and parcels from small-time businesses like yours and private individuals to broker lower rates. The good in this arrangement is many: you pay lesser for deliveries, and just as well deal only with the reseller, throughout the process resulting in more personal service for you.
Contrary to misconceptions, resellers don’t collect your packages nor book a space on a courier brand. They are the middlemen who so to say, ‘buy in bulk’ and then ‘sell in bits’ to businesses like yours.
• Integrate your choice courier company/reseller with your website
As your SME goes from strength-to-strength, it becomes inconvenient to spend much time inputting delivery details on your courier/reseller’s virtual delivery request platform. To save time and stress, you can integrate your online shop with the account you operate with courier companies. This way, you wouldn’t need to request package delivery manually anymore; delivery requests are automatic.
In simpler terms, your e-commerce website talks to the courier’s booking system and sends information about delivery orders, all in real-time. In essence, this automates the delivery process, speeding up delivery to end-users.
• Protecting your parcels
Nowadays, courier companies don’t aggregate packages at warehouses before on-ward delivery to end-users. Point of Sales devices is majorly the technology that is now being used to inventory packages in real-time before onward delivery to the receiver.
Sometimes, one of the metrics for claiming the insurance on damaged products is whether the parcel was adequately and safely packed. Therefore, it is imperative to invest in robust and sturdy packaging. For example, fill the box with polystyrene balls to prevent items in the box from moving around ceaselessly. Tape it all up so well, making good sure that nothing is hanging loose.
To sum it all up, there is much to gain for SMEs by outsourcing their courier service requirements. Are you looking for a courier service that can provide instant service? Check out www.viame.ae for your instant delivery requirements.