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Key lessons for UK SMEs

I was recently invited to the launch of “Success in challenging times: Key lessons for UK SMEs” the results of a research study commissioned by Kingston Smith LLP, a top 20 chartered accountancy firm, and conducted by the Surrey Business School of the University of Surrey. The event was held at Google Campus, “a unique co-working space in the heart of East London’s Tech City” and I have to say on first visit it seems a really creative an energetic place.

So what was different about this piece of research and why look at the Small and Medium Size Enterprise market in the first place?

To quote from the report “Much of the research into small firms has focused on their failure. The danger of this approach is that it identifies what has gone wrong, but may fail to discover what they need to get right. The approach of the current study, then, is to focus on the triggers that lead to SME success, as a way of highlighting more effective strategy decisions for firms themselves, and to inform better policy decisions for government”.

That’s the what? and now the why?

“SMEs are a vital part of the British economy. 99.9% of all enterprises in the UK are SMEs. These SMEs provide 59.1% of private sector jobs and are responsible for48.7% of private sector turnover. The performance of SMEs has a major impact on the performance of the

wider economy. In the current economic downturn, growth is most likely to come from SMEs. It is therefore encouraging that 2011/12 saw the highest level of company start-ups since the last recession with over 450,000 new businesses registered. However, new businesses have

a precarious existence and many do not survive their first year; only 45% will still be trading five years later”.

So what are the key findings of the research?

  • Successful SMEs are likely to use more than one source of finance to both start and sustain their business.
  • Successful SMEs proactively monitor their cash flow and liquidity.
  • Successful SMEs consider direct referrals and search engine optimisation as central to their success.
  • Successful SMEs are willing to find new ways of doing things and encourage their employees to think and behave innovatively.
  • Successful SMEs believe that learning gives them a competitive advantage.
  • Successful SMEs are more willing to seek external advice
  • Successful SMEs have the flexibility to adapt to changing market conditions by outsourcing

As an SME owner with a business that is 20 years old next month, the results of the research strike a chord. Indeed the last two points are why we started a new business this year, i-Corporate Services, to give SME owners the time to do what they do best while we do the rest.

Our services range from finding the right financing solutions for SMEs to providing accounting support through to commercial and employment law advice.  Whatever your needs our answer will be yes we can help, providing it is legal!

Geoff Newman

Director

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