London: A new MCA Think Tank paper, SMEs: Limiting Burdens, Targeting Support, published today urges government to understand the SME landscape better — so it can target its support and policies for growth more effectively.
The Think Tank, which comprises of some of the UK's leading management consultants, says that this would help ensure the government's growth, tax and regulatory policies are adapted to the needs of its target businesses. Active segmentation of SMEs could also help government identify those businesses with an enterprise mind set — those which are more entrepreneurial, and have the greatest appetite for growth.
The Think Tank paper makes a number of further recommendations, which include:
- The government should develop bespoke regulatory timetables for SMEs — so their form filling doesn't come all at once.
- The Better Regulation Delivery Office (BDRO) should look at the degree to which non-state regulatory requirements (e.g. the ISO process) are sympathetic and supportive of genuine SME needs.
- BIS should lead a project under the title of The Entrepreneurial State to establish how far government understands and is sympathetic to business needs, so that they can factor them into compliance requirements for everything from regulation to procurement frameworks.
- Government should consider the consolidation of the various SME support funds into a smaller number of pots. It could provide businesses with clear summaries of the support entitlement appropriate to their sector, type and needs. GrowthAccelerator and other sources of insight and expertise could be enlisted to support consolidation.
Paul Connolly, Director of the MCA Think Tank, said, "Understanding those SMEs with a strong appetite for driving their business forward from those that do not is crucial to stimulating more robust growth amongst SMEs. For instance, focusing on those entrepreneurial SMEs could have the collateral benefit of helping identify those sub-sectors that can best respond to the demands of the modern economy."
Kirsty Birks, Vice President of the MCA, and Director of member firm, Propaganda, said, "Middle-sized, owner-managed firms, are well placed to innovate. With Digital systems reducing the costs of risk-taking, they are able to move more quickly and more cheaply than before and are unconstrained by the governance structures of large PLCs. These owner managers understand the relationship between their actions, image and brand. They're genuine entrepreneurs because they are their business."
The MCA Think Tank also proposes that it works with BIS to investigate ways in which the Growth Voucher scheme could be used to support collaboration between businesses with similar advisory needs. The role of Local Enterprise Partnerships in coordinating this collaboration should be considered. The MCA will examine the prospect of substantially discounted management consulting rates for advice and support purchased in this way.
The Think Tank paper also highlights where MCA firms provide an array of support to SMEs. For instance, MCA member firm, Propaganda supported Boost Drinks, an SME in the functional drinks market in developing its brand strategy. The aim was to unlock incremental volume and value growth in an increasingly competitive and congested market space. Propaganda's work helped Boost establish a credible brand alternative to the premium industry incumbents. Boost has gone on to establish itself as the second largest energy drink in the UK and no.12 in the wider soft drinks market.
MCA Member, Grant Thornton, together with other private sector partners, run GrowthAccelerator, on behalf of the Department for Business, Innovation and Skills. GrowthAccelerator targets high growth businesses and provides them with the support they need to maximise their potential. It aims to assist with strategy development, identify routes to funding and investment, support innovation, improve the utilisation of human resources and build effective leadership teams.
KPMG, an MCA Member, and contributor to the Think Tank, has launched The C2FO Market, a new digital supply chain finance platform to UK business. The C2FO Market is transforming the business to business loan principle, acting as a "private exchange" between buyers and their suppliers who use the marketplace to increase profit and accelerate cash transfers between themselves, giving SMEs access to a new source of working capital. Existing supply chain relationships are enhanced and strengthened without the SME becoming a debtor to the larger enterprise.