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SME initiative on
Risk Management for companies up to 100mEuro
The risks are often
underestimated at any business stage. As a result, the
management of the risks are not taken care of in a proper
way; principles, tools/systems, finance and knowledge. In
approaching risk, there is a priority of activities for the
SME that is focused on growth. IKU offer a complete "hands
on" concept for managers of SMEs that will help companies
with strategic priorities, structuring and implementing a
complete risk management strategy for their company to grow.
Principles
To generate a manageable situation for growth the
following principles normally have to be observed.
1. Customers First -
"From transaction to relation"
The main concern for
companies are today not to produce but to sell. Generating
revenues, in an increasingly competitive environment,
demands competences in multiple areas which are skillfully
orchestrated into a whole, where best risk management is the
overall objective.
2. Liquidity Second -
"from cash need to investments"
The number one reason why companies go bankrupt is a
short term liquidity need. The second priority is thus to
build your liquidity - the cash and marketable securities
you hold - to a level cover your sales cycle. This varies
from industry to industry but there is a typical time to get
a new sale and financing the working capital in an industry.
When having covered this need for liquidity - to manage the
fluctuation of revenues - one should think about investing
for growth. This leads to a
cost of capital issue for the company.
Here credit insurances and
services and other instruments can come in and take off some
of the liquidity and credit risks and help you manage the
growth risks as a portfolio as well.
3. Knowledge - "the law of
increasing returns"
Being a typically knowledge and idea driven company,
expansion comes through knowledge. More of the same
(multiply) or more skills (training). You need both. In this
process you need to keep the customer relationships.
4. Employ - "the
specialization step"
In the process of employment, you need to keep the
customer relation, in order to make the company grow.
Specialization and multiplication follow.
5. Management - "the
company step"
As the company is growing, you need to learn management.
Management knowledge allows you to manage the people better,
keeping the company focused. You are now a company. It runs
without your every day attendance.
6. IP - "a strategic step"
In the next phase, intellectual property becomes a key.
Brand names, patents (technical inventions), copyrights,
etc. allow you to capitalize on your intellectual capital.
The customer relation now shifts from you personally to the
"brand"/trademark. This this step an IP strategy is needed.
7. Funds - "the financial
step"
Inviting others to share your success allows your to get
expansion for a share of the profit. A successful strategy
outgrows the lower share of the profit. However, it's better
to have a small profitable business than a large
unprofitable. Here real trade-offs of profit, management, IP
and the complexity of business begins - you are not an SME
anymore!
IKU helps SMEs develop
such a growth strategy based on a customer and intellectual
property focus.
Audit and strategy
Value your intellectual
capital. IKU can help you value your intellectual capital as
an important strategy component in your overall risk
management strategy.
