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NEWS AND EVENTS

The Support for Small Business Growth

Mike Cherry, National Policy Chairman, Federation of Small Businesses, discusses the environment for UK small businesses and what’s needed to support their growth.

What are the main challenges facing UK small businesses and entrepreneurs?

The broad economic outlook, including among the UK’s main trading partners, is always critical for small businesses and the present time is no exception.

Looking beyond this to structural factors, the challenge of finding staff with the right skills is a perennial problem for UK small businesses. Addressing this challenge requires a long-term approach that ensures our education system is more responsive to businesses’ needs, and that tackles skills shortages in areas such as science, technology, engineering and maths.

Access to finance remains difficult for many Federation of Small Businesses (FSB) members. Although conditions have improved, the FSB believes there remain structural issues in the market that require a long-term solution, including the entry of new challenger banks and growing the non-bank finance sector.

What do you think makes for the most effective business support?

Businesses’ needs vary widely, so there is not a ‘one size fits all’ solution to business support. However, there are some fundamentals it is important to get right.

For businesses beyond the startup phase, which has its own specific challenges, business owners need to be convinced that their investment in business support will have a positive impact. Key to this is that the support is practical so it leads directly to application in the business, and ideally support should be ongoing as changes are implemented.

There is also a considerable advantage in training taking place in a cohort of business leaders, an approach adopted by 10KSB UK. This immediately creates a sense of community, where the entrepreneur can share ideas and learn from their peers.

What role can business support play in helping businesses that are seeking to grow?

Helping businesses that seek to grow to plan systematically for growth, and to be prepared for the specific challenges associated with growth, is critical.

Enhancing management skills is also crucial, and an area in which the UK has historically lagged behind our competitors. Better management brings both short term and dynamic benefits, such as improving the business’s ability to access different types of finance and support that can enable the business to achieve its potential.

Support can also help raise awareness of the range of opportunities that are available to growing businesses, for example the variety of finance providers in the market, including non-traditional providers.

What role can larger businesses play in helping small businesses?

Where larger businesses have a good collaborative relationship with smaller businesses, particularly in their own supply chain, it can create real benefits for both sides. For instance, there are good examples of apprentices from large firms working in their supply chain. Some large businesses have introduced their supply chains to new export markets. In these and similar areas there are examples of best practice and opportunities for more widespread adoption.

Knowing that their large customers are going to pay on time is invaluable to small businesses, for whom cashflow can be a life or death issue. The best businesses know the importance of the whole business ecosystem, recognising that all businesses, small or large, have a role to play.

How can entrepreneurs support each other?

One of the main reasons our members join the FSB is their belief in the power of networks. Being able to work and speak with fellow entrepreneurs inevitably leads to valuable insights, and often to business opportunities.

10KSB UK recognises this – we believe it is a key factor behind the programme’s success. Whatever problems a business is experiencing, you can be sure that there are many others in the same boat, and many more who have already worked through the issue. Entrepreneurs’ combined experience is a formidable – and barely tapped – resource, and finding ways to open it up to others can be very powerful.

Which one piece of advice would you give to an aspiring entrepreneur?

Perseverance and openness to learning are key attributes for any entrepreneur. Every business leader makes mistakes and suffers setbacks, often for reasons beyond their control. The key differentiator is how you respond to the mistakes and the setbacks.

People often talk about the culture of enterprise in the US. One area where there does appear to be a striking difference is the acceptance in the US that business failure is a fact of life, and the knowledge that entrepreneurs can come back stronger as a result.