A stakeholder is someone who has an interest in the business or has an idea behind the business. He may become so by investing a sum of money in the business, or by providing support in other forms to the company. A stake holder’s decision affects the company, and he/she is also affected by the decisions of the company. Some examples of stakeholders are investors, employees, advisors, creditors, suppliers, Government, and retailers.
Since stakeholders play an essential role in shaping the present and future of the company, the company must choose the right stakeholders. As an SME, to have the right stakeholders can make a significant difference to the future of the company. What is even more important is to state the roles and responsibilities of every stakeholder involved in the business. Defining the roles will help the company is setting expectations and meeting goals in a much more structured way.
Who are The Right SME Stakeholders?
An SME faces several challenges of varying magnitude regularly. In the absence of skilled and motivated stakeholders, the problems seem to be highly overwhelming.
Does this mean that having the right stakeholders in the team can make the life of a start-up or an SME easier?
Yes, it does!
The question then arises –
Who are the right SME stakeholders?
Can these be friends or family members?
Or maybe old business associates?
The answer to this question lies in the attitude of a potential stakeholder. Here are a handful of things that an SME needs in its different stakeholders.
Investors are the people who think that the idea is worth the money, and accordingly, they invest in the business. Finding a good investor is essential because the company wants to minimize the presentations and reports required to keep an investor interested. It would help if the SMEs looked for the following qualities in the investor:
- An investor should be eager. If he is involved in the idea, he should be asking many questions. An active investor keeps the SME on toes, supplies the fund when required, and also applauds when it succeed.
- A good investor reviews the finances regularly. He helps the SMEs in keeping track of the accounts and minimizing the avoidable costs and overheads.
- An investor should also have a plan for an emergency arising out of any business situation. Such situations can surface due to several reasons. For example, when the Government decided to reduce the number of cars on the roads of Singapore in 2018, many companies dealing in car accessories and other related services took a hit. As a result, many investors backed the decision of the introduction of electric cars by carmakers to stay sensible in Singapore’s car-lite economy. While this step forced the investors to revisit a lot of their business structure and operations, but it also helped the investors to revive the business, and also invest in the upcoming technologies and be ready for future.
- A good investor does not limits sharing their knowledge and experience with other stakeholders merely to money. They share other learnings and lessons they have picked on their journey to the position today.
Employees or the workforce is a start-up’s biggest strength. These are the people that carry all the burden of a company. From an SME’s point of view, having the right resources is even more important because such companies cannot afford to make mistakes and lose money, projects, or opportunities. Thus, an SME needs to ensure that it employs the best resources available. Here are a few things they should ensure in a potential employee.
- An employee should be self-motivated or gets motivated by the challenges presented to him or her.
- An employee should respect the interests of the company, and work towards achieving mutual goals. An SME may sometime require its employees to put the organization’s interest before their interests.
- An employee should be a problem solver. He should be able to generate ideas and solutions to solve problems quickly and permanently.
- An employee should understand his duties, rights, and responsibilities.
The above two stakeholders viz. investors and employees are the most influential people in an organization. Apart from them, an organization can also have the following people as SME stakeholders.
Role of the Stakeholders
The stakeholders indulged in the operations and has a specific role to play in the growth of the company. Right from the owners of the company, to the final consumers, everyone is an integral part of the business and must perform their duties well to ensure that the ball keeps on rolling.
An investor is not just responsible for providing the funds to kick start a project. An investor is an influential person who has contacts, ideas, and experiences to make the product accessible. An investor may also be on the board of directors and set targets for the other internal SME stakeholders. An investor also represents the business in places where he has influence and power to get more funding for the company and to help it achieve its targets.
An employee, on the other hand, is responsible for ensuring that the targets set by the investors to meet. Employees are deployed at various levels and perform several tasks. All these tasks contribute to the monetary or non-monetary benefits of the company. An employee is usually the one that takes the first fire on every front, be it achieving unrealistic targets set by the board, or handling angry customers in the after-sales division. Employees generally do not have a share in the company. They hire on a set compensation, which may or may not revise as per their contract.
Creditors are responsible for providing funds to the business when required. Creditors usually charge a set rate of interest on the money lent to the company. A creditor performs the due diligence before issuing a loan, and does not contribute or takes part in the decision making for the business. However, depending upon the contract signed between the creditor and the company, a creditor can have access to specific resources or information of the company. That said, the Government of Singapore has a rather friendly stance towards the debtors. The law promises enough time to the debtors to repay their loans and escape any penalties if any. You can read more about how the Government is making it easy for both the parties through its guidelines on insolvency laws of Singapore.
A customer is a person who buys the services or products from the business. The business or any of the internal stakeholders employed by the business can influence the potential customers, and thus turn a customer into a repeat buyer. Other than that, there is little that a company can do to turn their buyers into stakeholders.
How to Find and Analyze the Stakeholders?
A lot of SMEs struggle with finding the right stakeholders not because they are inexperienced, but because they aren’t looking at the right places. Now, as an SME, you need primarily three kinds of stakeholders:
Singapore has several websites where a business can pitch their proposals or get in touch with investors. Also, Singapore hosts several tech fests and events that provide an opportunity for all the SMEs to get in touch with all sorts of stakeholders. Here are some of the notable forums available to businesses in Singapore – Angel.co, Beamstart, Bansea
An organization requires employees to carry out different operations of the company. The employees have to spread over varying age groups, experience, and skillset to fulfill all the requirements of an SME. Here are some of the dedicated Singapore job portals, where a company can find workforce resources – JobsDB, JobStreet, and Monster Jobs.
Banks in Singapore have devised several products that specifically cater to the need of SMEs. DBS, Singapore’s largest bank, leads the banking domain in Singapore to support start-up culture and the vision of the Government. Apart from DBS, several other banks like OCBC and Maybank have come up with their range of SME specific products.
Opening a bank account in any of the banks mentioned above promises you small and big loans in a timely fashion, with minimum paperwork and lucrative interest rates.
The Impact of Right Stakeholders on a Business
It is vital to have the right people on board to ensure business continuity and decent turnover.
For instance, Coda pay, a leading fin-tech start-up that has changed the way people of Singapore make payments was able to succeed because it could onboard investors with a vision that matched that of the original idea generators.
InMobi is another success story from Singapore that is making a global impact. InMobi has approximately 900 employees who have worked hard to make InMobi ‘the Biggest Non-Public Mobile Ad Business on the Planet’. Plus, as per business insider, InMobi has the happiest employees.
In conclusion, every stakeholder has an ideology of his own, and unless this matches with the organization’s goals, the stakeholder is just not going to prove fruitful for the organization.