Going From StartUp to SME: Keeping Your Product and Packaging Under Control

When a business progresses from start-up to SME (Small and Medium Sized Enterprise) new challenges have to be met to avoid, or at least try to minimize, ‘growing pains’ as the business scales up.

A startup can and often do operate in a more freeform fashion as it endeavors to settle on its exact business format, while an SME tends to be more structured as it focuses on a certain business model. The accent is then in fulfilling customer requirements in as profitable and efficient a manner as possible.

Keeping product and packaging under control plays a significant part in the SME’s profitability.

Going From StartUp to SME

Product inventory

A key factor in a product based SME’s efficiency is knowing what the stock situation is at any given time through using inventory management systems that adjust stock records as soon as sales are made.

Information such as which product lines are selling, to whom, when and at what times are valuable business intelligence and can both serve customers better and maximize the business’s cash flow and profits.

As a start-up progresses to SME status, efficient product inventory control becomes ever-more important.

Product types and variations

A startup may try a few variations or totally different products in low volume or even pre-production form to ‘get a handle’ on exactly where to position itself to maximize sales.

By contrast, an SME will have grown by serving a need through a settled product line up. That’s not to say more won’t be added, but careful thought and planning is usually the hallmark of an SME looking to enhance and maybe diversify.

It can be a mistake to launch new products too frequently, bearing in mind they all require promoting and inventory control. Doing this requires a heavy workload and one that can take the focus off the core products that have helped the business to grow in the first place.

It’s important to be careful of trying to be all things to all people and looking to fill every related niche.

Packaging

Packaging costs are a significant part of controlling the expense of supplying the product.

Because of low volumes, and maybe a degree of experimentation with product types as they find their way in the market, a startup may not focus much on packaging costs, but an SME will and indeed has to.

Higher volumes of sales mean packaging can be standardized, so ways of economizing help reduce costs of supply and adds to the bottom line.

Some ways to control packaging:

Image versus cost – depending on your product, the type and quality of packaging may be used to convey a message to the customer, but naturally, this has to be balanced with realistic costing.

A premium product supplied in a cheap basic cardboard box or padded envelope may not create the best impression. But, then again, going overboard may increase costs needlessly.

Companies such as Apple are past masters at creating a positive customer experience through their packaging: it has a department dedicated to creating the ultimate in packaging and ‘the unboxing experience’ for their products.

You may not go this far, but attractive, innovative and cost-effective packaging that conveys a positive image is certainly achievable.

False economy – even if image through packaging isn’t so vital, don’t skimp on quality to the detriment of your products reaching the customer safely – and ideally being re-usable if returns are necessary.

Economizing too much on packaging could end up costing more than it saves; returns could increase through damage in transit so harming your profits and possibly reputation.

Efficiency – supplying products in suitable packaging in terms of size and weight is important to reduce costs, so ensure the right size packaging is used if bought ‘off the shelf’ or designed for your products.

For example, sending a product in an over-sized box filled with polystyrene or bubble wrap is inefficient and adds to the expense – and doesn’t create a good impression when the customer opens it.

Buying packaging – a chance to save costs is to bulk buy and perhaps negotiate a better deal with suppliers. Always check packaging costs; as your SME grows you’ll likely qualify for better rates from your existing or other packaging suppliers so check regularly.

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