Small and medium sized enterprises (SMEs) are vital to the success of the UK economy as they represent 99.9% of all private sector businesses, driving growth, seeking out new markets and creating jobs as well as spearheading innovation.
It should therefore go without saying that they ought to be encouraged to grow. But, more than three months on from the emergency budget, do the government’s efforts go far enough? Do they enable previously hindered SMEs to take the measured risks necessary to achieve sustainable growth? Or do the proposed schemes fall short of what small business owners were expecting?
According to Growing Pains, an RSA study, two-thirds of small business owners describe themselves as ambitious. However, confidence remains low, with major issues like the EU referendum playing on SMEs’ minds. Our latest study called The New Internationals found that 55% of SME owners want more help dealing with the potential scenario of the UK leaving the EU. When it comes to giving businesses the confidence to take risks and grow, the government is making some positive sounds but it appears that there is still more to be done.
One area that remains overlooked is red tape preventing SMEs from expanding overseas. According to The New Internationals, two-thirds of SME owners say red tape is holding them back from seizing opportunities to expand abroad – despite growing opportunities for SMEs to operate internationally. The government must consider how it can ease this burden and make global growth a reality for more companies, for example through tax relief schemes and improving access to investment and information.
Another key concern for SMEs is the lack of information available on schemes and relief for small businesses, with around three-quarters of SME owners saying the government must make it easier to access information. The recently published enterprise bill is a good start at tackling this challenge. The bill outlines plans to set up a small business commissioner to identify these issues and resolve them faster. The bill also plans to clamp down on late payment and provide high-quality apprenticeships for SMEs. However, the issue is considerably broader than this and the government must find more ways to connect SMEs to the information they need to thrive.
The government’s announcements since July are all very encouraging. However, if these policies are not continually evolved in line with the needs of SMEs, then the UK’s growth forecasts will grind to a halt. If SMEs are to really gain the confidence needed to take risks and grow sustainably, then this strategic direction needs to be quickly followed by details about how these ambitions for UK businesses are going to be delivered in practice.
New government initiatives stem from a promising strategy and demonstrate strong intent to support future growth. However, they must do more for all small business owners to feel confident in their future prospects and access the right information to grow. If these policies are not continually evolved in line with the needs of SMEs, then the UK’s growth forecasts will grind to a halt.
Despite the need for more action from government, by understanding and making the most of the support that is available, and working in conjunction with trusted advisers, SMEs can boost employment, productivity, growth and their contribution to the UK economy.
Here’s some advice on what business leaders can do to improve their own growth prospects:
Ask for help: The government has launched a number of initiatives to help different kinds of businesses across the country find the help they need, such as the UKTI international trade advisers service for exporters. Advice can also be obtained directly from independent sources like the Federation of Small Businesses and specialist advisers, so ask for help when it’s needed.
Know your market: Understanding your industry is key to staying afloat and remaining competitive. Keep up-to-date with the latest regulatory and business news to ensure that you are reacting and adapting quickly enough to changing market conditions, however volatile or uncertain they are.
Be brave: There is no growth without risk. As the economy recovers, small businesses should make the most of their agility and focus on achieving their full growth potential, which could involve launching a new product, hiring a new team or opening a new office. These decisions might seem like a big risk, but if you are well prepared and have taken the necessary precautions, they could be the best decisions you have ever made.
Plan for the worst: Develop a business continuity plan that identifies all the services or parts of your business that you can’t afford to lose, such as information, stock or premises, and plan for how to maintain these if an incident occurs. Any incident can cause major disruption to a business, so pre-planning will help you get back to normal in the quickest possible time, reducing the impact on the company and staff.
Source: theguardian.com, 2015