Last week saw the latest results from the Sage Business Index released.  Over the last few weeks we have been making some suggestions as to what we thought the new results would highlight. We wanted to take the opportunity to have a look at these predictions, and also take a closer look at the results themselves and get your thoughts on them.

In ‘Lending for SMBs – a well oiled machine’ we discussed the proposed lending scheme in the UK for SMBs and whether this was enough to stimulate the growth of new business and expansion of existing small and medium businesses.

When asked about such assistance schemes as the one we referenced in the UK the results showed that, worldwide only 19% felt that such special assistance schemes were needed. However it is worth noting that, 48% of Singaporean respondents saw assistance being key, raising the questions of what is Singapore doing differently? Is it a different mindset when it comes to come governmental assistance, seeing this as necessary and welcomed or is there something other countries can learn from their schemes and programmes?

When it comes to the current level of assistance governments provide, the results are clear with 76% of respondents worldwide feeling their respective governments are not doing enough to support them – slightly skewed by lower than average responses from Portugal, Poland and Spain currently deeply embroiled in the Eurozone crisis, but still a large proportion of respondents unhappy with the current situation.  Coupled with almost a third of businesses marking access to capital and funding as one of their least favourite aspects of doing business, increasing slightly from 22% from September 2011.

Digging a little deeper, and when asked what governments should be doing to support small and medium businesses, the top answers were centred on reductions, in both bureaucracy (43%) and business tax (36%), whilst also placing a great deal of value on the opportunities for skills development (31%).  This suggests businesses wan their focus to be on doing what they do best, and reduce the governmental paperwork and prescribed procedure they need to follow to a  minimum and may feel this is a barrier to growing quicker, this is something Simone from Mmmm discusses in our video here and we discussed in our post here

What do you think? Do you seem to spend your time away from customers, and filling in form after form?  What would you change if you had the opportunity?

Increasingly businesses are relying on their own ingenuity and adaptability to continue to grow, 70% have made changes to their businesses, 33% have expanded into new markets or products to increase their revenue opportunities whereas 50% have cut operational costs.  Surprisingly only 22% have had to cut staff numbers, and even more positively 25% of businesses actually increased staffing in the same period. Matched with the confidence businesses feel about their ability to grow and how the last six months have gone for them, we begin to see a much more positive picture; 31% of worldwide respondents have seen their revenue increase, along with 32% seeing their revenue hold steady, giving a majority who have seen no reduction  in revenue.

The Sage Business Index aims to give a snapshot of the business landscape for small and medium businesses across 15 countries we work with.  Do you agree with the results or is there something else you think can drive businesses to be successful?  Or is it as the results suggest, just about letting businesses getting on with what they do best and reduce everything outside of this to as minimal as possible?

It happened quietly, but this month UK growth figures were revised upwards. They still showed a recession, but the UK economy shrank by less than previously thought between April and June. This is good news for UK businesses, yet SMBs in Greece, Spain and many other Eurozone countries still need more help to get back to growth.

The question is how to achieve this at a time of such economic upheaval. One way in which the EU has shown support over the last four years is through its 2008 Small Business Act for Europe. This aims to enhance the competitive nature of the Eurozone, create an environment in which entrepreneurs can shine and adapt public policies to SMB needs. And it is arguable that its measures may have helped foster an environment for growth among the EU’s SMBs (99% of businesses).

However, whilst international policy acts as a powerful driving force, it is still necessary for changes to be made at a national level. Individual governments have a responsibility to support their SMBs and cannot simply rely upon international or pan-European policies.

This is echoed in our last Sage Business Index which revealed that over 76% of SMBs felt their government does not provide them sufficient advice and support. Again, this begs the question: what can be done?

One of the methods in which SMBs can be supported locally are mentoring schemes such as that run by Nesta, a UK charitable organisation which aims to nurture companies with an appetite for growth. For example, when UK production company, Glasshead, reached out for mentoring, it quickly realised other markets it could reach and a range of different services the business could provide. The result was a larger client base, despite the tough economic conditions showing that local support does work.

SMBs need to be receiving support on both an international and national level including policy changes, finances and mentorship. Only by doing so will we see economies grow across the EU and the globe.

Every week new stories emerge about companies having to work harder than ever to survive in the Eurozone. According to media reports, the outlook remains bleak.

For example, Moody’s – the credit rating company – declared that Germany may need to change its rating outlook from stable to negative (they have since kept their AAA outlook). Meanwhile, Spain may become the fourth Eurozone country to require a full bailout.

However, despite the headlines it’s not all gloom and doom. With the quiet summer period taking place, the Eurozone front may settle for a few weeks allowing business to reflect on the situation.

In our last Sage Business Index we mentioned that the top three international business challenges for small businesses were:

1)      Inflation and rising costs of energy, fuel and raw materials
2)      Instability/uncertainty in local economic market
3)      Reduced cash flow in the supply chain (suppliers/customers)

With some breathing space afforded by the holidays, devising strategies to tackle these concerns should be the aim of governments internationally. This may involve investing in businesses, an already common activity for countries that are experiencing slowing economies. When business contracts it is important for governments to get people spending again, to make sure businesses have the resources they need. For instance, Britain is looking to boost exports to £1 trillion annually by 2020.

While policy-makers agonise over a way out, small businesses need to focus on minimising costs, increasing customer service and responsiveness, and looking for new sources of funding. This may mean consolidating or changing suppliers to get better deals, investing in customer service training and looking for government initiatives aimed at shoring up businesses.

But while firms do this, perhaps they should remember that tackling the Eurozone might feel a little less daunting after a summer break.

The recent visit to the UK by the US president saw Barack Obama and David Cameron declaring the relationship between the UK and the US as “essential…for us and the world”, with Cameron announcing that “there is an incredible alignment of views, understanding and interest between Britain and America.” Read more

Increasingly we hear and read that amongst the most pressing business challenges faced by small to medium sized enterprises are reducing costs, improving efficiency and providing better customer service. These certainly come through in the survey of 6500 enterprises interviewed for the Sage Business Index report. Read more