Digitization – the dilemma of the small and medium-sized enterprise

Digitization – the dilemma of the small and medium-sized enterprise How a back office can help small and medium businesses

Just small- medium-sized craft companies, which started with only a few employees and grew over time, are often difficult: Suddenly there are employee problems, the boss not only has to take care of the craftsmanship, but also gets organizational tasks such as sourcing, Insurance, bills, dunning and liquidity. Unlike larger companies, however, a small mid-sized company does not have the knowledge and no contacts to build it all. So what to do? There is a very elegant option: Outsource – let a professional do it.

A back office keeps your back free

Certainly it is not easy to hand over things to someone else. But let’s be honest: How much time, energy and tension does it cost if you have to deal with things that do not actually belong to your own competence? Often the manager – who during the day out of passion or hardship prefers to walk on the construction site or in the workshop – sits in his office for a long time in the evening and on weekends, to devote himself to administrative tasks that simply have to be done?

It’s easier for big companies that their own departments deal with such tasks. After all there are again people who enjoy dealing with numbers, regulations and laws. Why should not the small mid-sized company also take advantage of this? With a back office that keeps his back free for the things he has built up with his business.

Bringing knowledge into the house

For example, an external back office can handle billing, dunning, and billing invoices so that the company has the liquidity. A back office can see if a larger purchasing volume can be used to achieve a different purchasing pricing. By submitting several smaller orders to other medium-sized companies, a larger project could be accepted across the board, which in turn represents order security.

For example, a craftsman with 300,000 Euro turnovers and a material input of 100,000 Euro could increase his outcome by 2 to 5 percent, only by bringing together purchasing volumes. Not to mention the financial advantage, instead of utilizing supplier credits for discounts. All in all, the total is the payment for all the purchases of tools, cars, building materials or others in any case. Such an activity would be outsourced and the managing director can take care of what he has best mastered to perform there fully. Nothing distracts him, because administrative tasks are taken away from him. At the same time, he receives detailed reporting about his company in order to continuously optimize all business processes.

Minimize risks

Often life partners work in the company and take over office work. What if that power fails? Again, this is a loophole with risk factor. What if, in the case of a construction contract, the client does not pay the final invoice including the retention of warranty? In that case, the company soon lacks 20 percent of the order volume. And if he calculates with 10 percent profit, it will be 10 percent loss. Depending on this, this can mean bankruptcy.

Our conclusion:

A smaller mid-sized company, with the help of mid-sized professionals, can focus on its original tasks, generating more growth, reducing tasks, and increasing profits, should buy that optimization – so that it can stay with its profession and no one loses the fun of his job. We will see that companies that do not reorganize on this issue have a hard time generating profitable orders in the market in the future.

Are you interested in the topic of back office and have specific questions? We are happy to answer you.