General
05 Jul 2012

Business advice and information problems for high growth SMEs

The Quarterly Survey of Small Business in Britain

The Quarterly Survey of Small Business in Britain

More than one in ten (12%) of the UK’s small to medium sized enterprises (SMEs) say that difficulties in accessing business advice and information create problems for their businesses. The percentage rises to 15% amongst firms that identify themselves as the most innovative and growth oriented. The finding comes from The Quarterly Survey of Small Business in Britain(*), produced by The Open University (www.open.ac.uk/quarterly-survey) with support from ACCA (The Association of Chartered Certified Accountants) and Barclays Business Banking.

The report examines the current state of business advice and information in the wake of radical changes in government-funded business support, including the restructuring of Business Link as an online resource, the closure of England’s nine Regional Development Agencies and the emergence of Local Enterprise Partnerships (LEPs). It finds that more than one in ten (11%) of the UK’s SMEs have found it harder to access business advice and information over the last year, while a similar percentage (10%) found it easier. Two thirds (67%) of respondents reported little change. Medium-sized firms are far less affected, with only 9% of those in the 50-250 employee category reporting that it has become more difficult to obtain advice and information. However, amongst the UK’s smaller firms, 18% of those with 5-9 employees found it harder to get the advice and information they needed.

Despite the proliferation of information online, which makes it easier for small firms to obtain information and advice from a range of sources, there is still enthusiasm for face-to-face contact. Information from websites (63%) and face-to-face contact with an advisor (59%) are reported by businesses as the most worthwhile delivery methods. While the new Business Link online site appears to be popular, the most commonly identified problems by regular respondents relate to the loss of ‘off-line’ services previously provided by Business Link and regional development agencies. SMEs continue to identify their accountant as the most likely source of helpful business advice and information over the past year.

Andrew Leck, head of ACCA UK says: “Seeking and getting the right advice is crucial for SMEs – from start-up and as they move into growth. There is information out there, from the Federation of Private Business’ Get Britain Trading Campaign – of which ACCA is key supporter – to of course chartered certified accountants. A good accountant will not only handle financial and operational data but will offer professional business advice on a number of other topics too, leaving the entrepreneur to focus on maintaining and expanding their business. Informal networks are also important sources of advice, as recent findings from Delta Economics have shown in a report for ACCA; this reveals that 32% of UK SMEs rely on personal friends for advice, but move onto professional advice as the business grows.”

Professor Rebecca Taylor, Dean of The Open University Business School said: “The world of business advice and information for the UK’s SMEs has seen some major upheavals in recent years. Our research indicates a mixed picture, with real signs of progress in the effectiveness of online services, but also some continuing evidence of unmet needs, which may in some cases be affecting the growth performances of our more entrepreneurial firms. Web-based advice and information can make a real difference, but sometimes you’re still going to want to talk to an advisor face-to-face.”

The survey also examined SME performance and prospects, and asked owners and managers about the major problems they were facing. The economic climate and demand remains a huge issue for UK SMEs, with 40% citing it as their top problem. 16% said cashflow was causing problems, while 10% reported government regulations as their biggest issue. Fewer SMEs report falling sales compared with three months ago, with manufacturing and wholesaling SMEs still performing better than most sectors (+26% and +21% respectively), though not as well as before. SME retailers report the first sales growth in almost five years (+2%), while construction SMEs reported that sales were down -19%. Full details can be found in the survey report(*).

ENDS

(*) The full survey is available as a free PDF download at: www.open.ac.uk/quarterly-survey

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