Podcast January 13, 2021

The future of administrative services for SMEs

No matter what vertical you’re in, small businesses are always looking for ways to save money and — ultimately — time. One big time-suck? Back office administrative duties.

The problem is most new SMEs struggle with necessary administrative processes like creating a business continuity plan or dealing with payroll and insurance. So, their well-intentioned business idea gets pushed back even further.

Claudio Romano, Founder & CEO of ORCHID B, has set out to help new SMEs navigate administrative duties and manage all back-office operations in one single platform.

In this episode of Payments Innovation, Claudio discusses… 

  • Why operating an SME is so complicated
  • How ORCHID B takes new owners from anxious to competent forecasters
  • The #1 role new SMEs need to be filled

SME administrative operations: It’s complicated

New owners of small businesses are excited to get things rolling and start making a difference for their customers. That’s why they started a business, after all.

Unfortunately, many SMEs get tangled up in the jungle that is back-office administrative operations. This is exactly what happened to Claudio.

Small business operations

Shifting from a large organization to his own company was anything but simple. Whether it was dealing with government authorities in order to register his business, meeting with big-wigs at the bank, understanding tax returns, or managing insurance and payroll, it became clear to Claudio that running a small business was not going to be easy.

Traditional lenders

Not to mention, most traditional lenders don’t accept new forms of business legitimacy data. Maybe your eCommerce startup has exceptional numbers in regards to Amazon, Shopify, or Stripe; however, most lenders don’t have risk models that take those data sets into account.

“SMEs and the self-employed spend up to 60 days a year dealing with back-office administration.” — Claudio Romano

What’s staggering about SME operations is that, in reality, they’re simpler than a large corporation’s. It’s just too much for a few people to handle — time and money end up being wasted.

Additionally, 95% of companies globally are SMEs. That’s the majority of entities everywhere wrestling with solvable problems.

An End-to-End SME solution

The missing piece to this SME predicament is an all-encompassing resource for administration services. Instead of hunting around for the best service providers — or lenders that even work with digital SMEs — there should be a platform that curates and helps you manage them.

That’s Claudio’s vision for ORCHID B: a one-stop-shop for administration services. It brings all the necessary back-office services an SME needs under one roof, saving time and frustration.

“It’s all about building the client experience… which will mean that our customers come to one platform and one platform only.” — Claudio Romano

Tackling the Immediate Problem

The overall issue that ORCHID B is targeting is the operational side of running a business. Essentially, Claudio’s system classifies each of his customers as one of the following three categories:

  1. Anxiety — A new SME that is uncertain about most of the necessary back-office operations.
  2. Control — An owner who understands the end-to-end operations of their small business.
  3. Forecasting — The owner can now start to plan for the future of their business.

ORCHID B mainly focuses on the Anxiety to Control pieces. As the small business works towards total control over their end-to-end operations, ORCHID B collects crucial data that informs the SME’s next steps.

Demonstrating Profitability

The compiled data demonstrates the SME’s viability and success, making it easier for them to approach a more traditional lender when the time comes.

Once the small business reaches the Forecasting stage of Claudio’s system, they’ll have the data to show that they’re profitable and can qualify for credit.

The #1 Needed Role in FinTech

Whether you decide to work with a company like Claudio’s or not, operating in the fintech space can get messy.

That being the case, Claudio urges any business involved in fintech to hire a compliance officer ASAP

“I would recommend that any company looking to work in FinTech onboards a compliance officer, first and foremost.” — Claudio Romano

As we discussed earlier, operations for a small business are often too much for the owner to take on and execute properly. One expert you’ll want on your side is an experienced compliance officer.

There are endless regulations SMEs involved with fintech have to consider: business continuity plans, disaster recovery plans, privacy policies, anti-money laundering policies. The list goes on.

If you’re not ready to tackle those legal issues on your own, it’s advised that you onboard a compliance officer.

Get Your Time Back

Starting a business is a huge leap of faith and it will consume your life if you let it. While that may sound intriguing to some, the rest of us enjoy leisure time and sleep.

Consider partnering with a business like ORCHID B to make sure the back office administrative operations are getting done and done correctly.

Lastly, hiring a compliance officer can be the difference between getting your business off the ground and an arduous trek through bureaucratic hoops.

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