Government Support for Small Businesses
It is a matter of extensive and longstanding record that the UK’s six million small businesses employ 50% of the workforce yet contribute only 33% of GDP.
They have a high failure rate with 250,000 closures every year, much of it attributed to lack of business skills and systems.
Governments down the decades have promoted numerous initiatives to counteract this, the most powerful of which were the resource-rich investment programmes 1987-2012 led by the semi-private Training and Enterprise Councils and Business Link network which provided subsidised training and advice to one million small businesses. These provided frameworks of tested interventions and consultant credentials checks, imposing operating standards for client project work.
In this period UK small business international competitiveness rose from 21st to 7th place.
But these networks gradually crumbled through intense political lobbying and interference by the educational sector and other public institutions objecting to the involvement of the private sector. The result was that each (of 200) branch was saddled with up to 17 compliance audits annually, consuming most of the resources intended to help small businesses.
Coinciding with the Great Crash, the Treasury concluded rightly that the money was mostly wasted and closed down both networks.
But every subsequent government felt the need for a public show of small business support and introduced important-sounding initiatives whilst spending a fraction of what it took to raise small business international competitiveness in the Nineties and Noughties.
Their strategies were/are informed by the big consulting practices and business schools, who know nothing of small business practicalities and a few high profile ‘entrepreneurs’ to lend small business authenticity.
Today, there are Local Enterprise Partnerships and Growth Hubs, all operating on shoestring budgets, running events at which small businesses meet self-employed consultants who charge commercial rates (eg £500 per day) for further help. These are supplemented by numerous private events organised by individual consultants, banks, FSB, Chambers which follow the same pattern.
Then there are the complex innovation grants and loans schemes, going to small numbers of businesses in specific areas of the economy. Much of their funding is consumed by a public / private consultant industry that charges for writing the bids and diverts much of the money to itself in return for ‘coaching’ and ‘project managing’ the successful end user businesses as a condition.
The 95% of small businesses that don’t attend any such events, or seek scarce grants, spend an average of £2500 annually on independent consultants and trainers with an unknown return. They do so speculatively to solve short-term problems at minimum time and cost, rarely investing in the skills to do things permanently better.
The UK consultancy industry, such as it is, requires no formal qualifications, no professional institutes, no ethics code and is open to anyone who cares to describe themselves as mentor, coach, consultant, trainer.
So small businesses are at a serious disadvantage in finding affordable and trustworthy help.
Since 2012, UK small businesses have now declined to 10th place for international competitiveness, unsurprisingly.
COVID aside, and Brexit for sure, UK must get the top of the rankings without breaking these businesses’ own and the public, bank.
The restorative issues to resolve within small businesses are:
- Inadequate business management knowledge
- Inefficient working practices
- Lack of competent and affordable outside assistance in rectifying these
And… - Lack of public / government knowledge of what small businesses need
- A Government national strategy, to be effective would have to involve:
- Collecting data on the operating performance of every small business
- Evaluating the results by specific skill shortage as indicated by their scores for: (i) Marketing (ii) Product / service quality (iii) Technology / systems use (iv) People productivity (v) Profitability / ROI
- Organising the results by industry group
- Organising the results by postcode
- Identifying targeted support needs
- Developing practical skills training for each of the 5 business streams
- Developing a project delivery and monitoring process
- Securing localised sources of competent / trusted training and support
- Online assessment and solution tools
- Coached practical learning
- Costing much less than all the present initiatives
- Raising performance and survival
- Making it worthwhile and simple for small businesses to collaborate
The above proposition, to which Runagood® has the solution, has been passed around 11 government departments and to those to whom they turn for advice.
Here’s what happened:
Government:
“Thank you for your proposal, regrettably it doesn’t fit our current strategy”.
Accountant institutes:
“Actually no, we are already developing our own solution”
Business trade bodies:
“No, sorry we’ve tried selling business consultancy and members didn’t want it”
Employer bodies:
“No, it’s not the sort of thing we do”
Big 10 accountancy/consultancy practices:
“We don’t touch any business below £10m turnover”
Business software suppliers:
“Only if it’s ‘no touch’ i.e., the client uses it without any human interface”
So where does that leave a national small business improvement strategy?
“Speak softly and carry a big stick; you will go far.” (Theodore Roosevelt)
Speaking softly?
We will continue appointing accountants who wish to diversify into business advisory work, and train them to use affordable technology with their clients. They are trusted professionals who are good at learning, understand small businesses and competent with technology. They are gradually winning new revenue from existing clients and new clients for business and accountancy consultancy.
In the future, all business advice will work this way.
Big stick?
Smart technology that:
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Assesses any business’s performance
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Forecasts its potential
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Identifies its weaknesses
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Delivers affordable solutions
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Sustains support forever
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Raises UK small business competitiveness to #1 worldwide
This means that we will in the next two years achieve a tipping point of enough partners helping enough clients when suddenly this will emerge as the new future.
And you could join it now while it’s still easy and affordable to do so. https://flourishconsultantsservices.com/contact/
How To Improve Business Efficiency
Business efficiency revolves around finding the ultimate method to improve your productivity and minimize your costs. It is common for businesses to find it difficult to achieve business efficiency. So, if you’re unaware of how to go about this, then keep reading! Here, you will learn the principles of what you need to ensure that your business is more efficient than ever.
Automation Is Key
One of the first things that you will need to work on is the automation of processes, administration and production. Technology is essential when it comes to business development. So, you must integrate technology within your business. Many employees are left to do mundane work that is time-consuming. Automating such tasks will allow your employees to focus better on more productive and rewarding tasks; or, it will allow you to streamline your workforce and maximise profits.
Encourage Communication
If there is something that most businesses need to work on, it is communication. Ensuring that your employees interact face-to-face is essential to ensure that they regularly share their information and ideas and work together as a team to improve efficiency. Focusing on effective communication and understanding work dynamics is an important aspect of ensuring that your business is run efficiently.
Cut Down On Distractions
Communication is great but there is one thing that you need to be wary of. Sometimes, businesses have too many meetings and too much unnecessary communication that simply ends up distracting the workers from their jobs. Hold meetings once a day, by all means, but as a rule they shouldn’t last longer than 15 minutes.
Get Things Done One At A Time
When you pile up too many things for one person, there are bound to be issues. So, it is best to ensure that you give your employees one or two projects or tasks at a time then monitor progress and support when necessary. Stress isn’t always a bad thing but putting too much pressure on someone is only going to end in tears.
Avail Management Software
One of the best things that you can do is get your hands on task management software. Platforms such as Trello are great for keeping, at your fingertips, a list of all the tasks that you or your staff are working on. And once the work is done, it can easily be archived. It helps with better management of tasks while ensuring efficiency.
Following these basic tips will improve the overall efficiency of your business.
For an impartial view of your business’s unexploited areas, contact Flourish to get your FREE Business Performance Assessment.
How To Create A Budget
Do you think budgeting is overwhelming? Well, that’s understandable but it doesn’t have to be. And it’s perhaps one of the most useful things that you can do to achieve your business’s financial goals. So, if you’re feeling a little concerned about how to create an effective budget, then look no further. Here, we will talk about the different, straightforward steps you need to create a budget.
Figure Out What Your Income is
The first thing that you will be required to do when creating your budget is to ascertain what your income is. This means that you need to know about all of the channels through which you generate income. When running a business, you often diversify ways of generating income. So, if you have more than one source of income, then you need to consider each one of them in turn. Knowing where your income comes from will also help you identify your expenses.
Figure out Your Expenses
Next, you will need to calculate all of your expenses. Take a look at your previous profit / loss and cash flow statements to verify all of the expenses that you incur regularly and ensure that you include them all. Here’s a rule that you should always bear in mind: you can afford, perhaps, to underestimate your income, but not your expenses. Focus on where your money is going out. And, get all the documents to help you understand this better.
Calculate The Difference
By this stage, you will have a list of all of your incomes and expenses. All that is left for you to do is to calculate the difference between the two. This will help you realize how much you’re left with at the end of the accounting period, whether it’s weekly, monthly or yearly. As a business, you want to achieve a profit. If you see that your expenses are running too high, you need to assess what expenses you can cut down.
Plan How To Use Your Profit
When you’ve figured out the difference between your income and expenses, you’ll find either a loss or a profit. Lossmaking is fine in the short-term, may be inevitable in the early stages of a business, but the long-term objective is to achieve sustainable profits. Then you have to assess what you should do with those profits. Think carefully about how much you will be putting back into the business and what you will be taking out as drawings. Keeping a decent amount of retained earnings is essential for every business as a surplus or cushion against future lossmaking or setbacks.
Lastly, you will need to ensure that the budget you make is not something that you look at only once a year. You need to continually reassess the budget versus actual income and expenses in order to measure the performance of your business. Doing so in a disciplined way will help you track progress and ensure that you’re on course to attain your financial goals.
For an impartial view of your business’s unexploited areas, contact Flourish to get your FREE Business Performance Assessment.