What are the challenges for SMEs?
There is a wide variety of business types in Small and Small Business (SME). The Chamber of Commerce pays specific attention to SMEs. SMEs mainly conduct their business activities in sole proprietorships, general partnerships or legal entities; in particular private limited companies and composite entities (holding companies and operating companies).
SMBs produce products and services for consumers and other enterprises with departmental teams of internal and external employees. Internal employees often have worked for the company for many years and have a lot of implicit knowledge. SMEs also make extensive use of external employees. By external employees we mainly mean self-employed persons who carry out specific activities for a limited period of time.
An SME purchases products and services and the departmental teams take care of a breeding process. The company sells the products and services it produces to consumers and other companies.
The internal organization of an SME is set up to be goal-oriented and sales-oriented. The management knows exactly how much needs to be sold and converted to achieve a reasonable result. The cost pattern is known. Company management performs the indirect activities and duties, including the corporate legal function for all business activities.
The business risk lies in the fact that if sales and sales speed up or slow down, operating costs become uncontrollable. An adequate response to the disappearance of long-term sales contracts or rapidly increasing “usual” sales takes place too late, resulting in disproportionate cost fluctuations and fluctuating results.
Optimizing business operations and responding adequately to changing circumstances requires an effectively functioning legal operation for:
- Termination of Non-Performing Agreements;
- Closing and managing sales agreements;
- Building and assessing employee capabilities; and
- Building a portfolio of strategic suppliers.
Together with SMEs from various sectors, we are working on a suitable legal operation.
The collaboration consists of:
- Optimizing the company-specific contract library with contract and script items. For this we use the suggestions and examples of the sector representatives;
- Sharing knowledge through webinars and targeted awareness and training programs; and
- Suggestions for additional functionalities.
An SME can consist of extensive business activities and as many partners (customers, employees and suppliers). When preparing for the making of agreements and contract management, the company wishes to know the partners on a permanent basis. For some business and transaction types, knowing the partner is required by law. Making agreements with partners about managing their own company and personal data is an obvious step.
The volume of appointments of an SME can be high. It is not to say that every appointment leads to contract management activities. Sales and purchase agreements for the delivery of products often have a short lifespan; this is in contrast to agreements with employees and the outsourcing of tasks. Agreements that lead to periodic rights and obligations require special attention from management.
Organizing the protection of trade secrets is a challenge for SMEs. On the one hand, protecting the trade secrets is essential for ensuring business continuity and on the other hand, the SME gives the trade secrets to internal and external employees or employees of customers to innovate or sell the products and services. The lack of control over trade secrets makes company management vulnerable and uncertain.
Legal operations is usually assigned to the financial director or management. The sales, human resources and purchasing departments use procedures when entering into obligations. Authenticating the identity of the partner and the authorized representatives usually takes place once, and that also applies to the agreements that are entered into. Contract management is limited to receiving products and services and paying or receiving agreed resources.
A complete overview of the acquired rights and obligations to be managed is available in outline. It is possible to make an estimate of the liability and cost risks to a limited extent.
To organize legal operations, we work together with the MYOBI trust network. In this collaboration, a legal operations SME has been developed that consists of:
- Information ecosystem on the MYOBI Trust Network. Based on the registration on the trust network and concluded agreements, the company has an overview and insight into the partners with which business has been done;
- Company-specific learning environment with awareness and training programs;
- All employees and management are aware and have knowledge of how to organize legal operations;
- Smart contracting with the contract portfolio SME sector. The SME uses a sector-specific contract portfolio that has been made company-specific if desired;
- Supporting services such as knowledge bases and a service desk. The employees of the SME can fall back on professional help in carrying out their work;
- The SME project;
- The SME has influence on the development process of new functionalities; and
- An attractive business case and good value for money. For every SME there is a value proposition with a suitable business case. On the MYOBI business knowledge base we help the SME to build the business case with the help of Business Model Canvas.