Small business needs a big helping hand

For an SME there are a plethora of resources available for business-related help, advice and support on all aspects of running a small business. These range from from accountancy, tax, health and safety, to how to start up and then how to sell your business on.

The most highly funded business support centres have a tendency to be government run. One such is Busi-ness Link, which is described as the government’s flagship business advice centre.

However, according to a report by the Federation of Small Businesses (FSB) only 11 per cent of SMEs have turned to their local Business Link in recent years. Likewise, a separate report by the Confederation of British Industry (CBI) also discovered that Business Link was only used by one in seven SMEs last year, but that it continues to receive an annual £140m of tax-payers’ money.

The (CBI) report, which found that the government spends £8bn a year on offering help and advice to SMEs around the country, concluded that SMEs face “a baffling array of conflicting, confusing and inconsistent quangoes, grants and agencies”, all under the guise of ‘support and advice’ from the government.

Norman Mackel, chairman of education and training business support at the FSB, told CRN that this could be the reason why SMEs do not bother to consult any of the 2,650 government-funded organisations thought to be in existence by the CBI.

“Our previous reports have shown that most SMEs would prefer to go to the likes of their accountant or banking professional [for business advice]. Services such as Business Link consist of people that have very little hands-on experience of business, which means that the SME and the government advice department often aren’t talking the same language,” he said.

Ian McCafferty, chief economic adviser at the CBI, said in a statement on the report’s findings: “Despite work to address the problem it is clear that much more progress needs to be made by government and the regional bodies who can work more closely with business.”

However, according to resellers, it is still difficult to not only get advice of any value, but to also know what is available to them.

Mike Lawrence, managing director of VAR Bentpenny, said it is an arduous task trying to get business support from the government, whether it is in the form of financial funding to aid expansion, or simply advice on health and safety rules for a growing number of employees.

“[Services such as] Business Link do run a number of positive schemes that offer some help to SMEs, but they do nothing to help us expand our business,” he said.

Andy Cordial, director of storage vendor and distributor Origin Storage, said to achieve growth iti s essential that the government reforms the ways in which it interacts with small businesses.

“SME resellers need advice on how to manage growth, how to manage business in times of downturn and the lifecycle of change in the IT industry,” he said.

There are SME mentoring services available from Business Link, such as Shell LiveWire, which is a service that puts SMEs in touch with peers within their sector. The government also runs networking events around various subjects, such as those specific to SME issues surrounding VAT.

Despite this, in a recent poll conducted by CRN, 70 per cent of resellers said that they felt the government provided too little information to help aid SME expansion. Just 10 per cent thought that there was the right amount of information available.

Jason Chapman, computer consultant at ISV JAC2 Consultancy, said that many government support schemes for SMEs often fail to satisfy the needs of growing SMEs and that they are only partly suitable, for newly established SMEs.

“There’s money to be spent, but it often doesn’t go past helping brand new start-ups. We have been fobbed off by the likes of Business Link and prom-ises have not been kept to,” he said.

“I don’t think the government gives good value for money on advice to SMEs considering the £8bn a year it spends.”

Cordial agreed. “The government seems to be making a lot of quick fixes, but there are not enough long-term plans, such as tax-breaks for SMEs nor incentives to help struggling SMEs get up and running again,” he said.

Another reason that SMEs, including many channel players, may not be utilising government advice services, Cordial added, is that they may have never been made aware of the resources available.

“Business Link does offer a mentoring service, but I didn’t find out about it until I had signed up for a paid one, which I wouldn’t have gone for if I’d known about the Business Link one,” he said.

Stewart Hayward, commercial director of online VAR WStore, which recently expanded through the acquisition of French reseller Inmac (CRN, 5 December 2005), agreed. He claimed that if the government does have resources available to help SMEs, then many are not made aware of them.

“I wouldn’t have a clue where to go for help on SME business-related issues, other than looking at a central government web site. But we would still rather pay for information we can trust [the quality of], than go with the government’s information,” he said.

Standard Industrial Classification (SIC) codes, which are allocated by the government to each new business for identification purposes, are one way that the government could increase the quality of the information it provides to SMEs, according to Cordial.

“Every new SME reseller could be managed by their SIC code. I’d like to see a welcome pack given to us when we start that offers advice, support and useful government contact details based on this SIC code,” he said.

Channel players are unanimous in their agreement that the government could always do more to help SMEs. However, Hayward said it is not necessarily the job of the government to help SMEs to expand.

“The government doesn’t give realistic support to SMEs, but it shouldn’t really have to, becauseit’s not its place to. Setting up a business is about knowing your market and the government can’t do that job for you,” he said.

Elaine Axby, principal analyst at Quocirca, said the government should occupy more of an omnipresent role.

“The government’s job should be to level the playing field and make the barriers of creation for new SMEs as low as possible. It does do a lot to help, but perhaps it doesn’t do it in the most efficient way possible,” she said.

Contacts

Bentpenny (01453) 873259

www.bentpenny.com

The Federation of Small Businesses

(01253) 336000

www.fsb.org.uk

JAC2 Consultancy (01928) 751088

www.jac2.co.uk

Origin Storage Solutions(08701) 688889

www.originstorage.com

WStore (08700) 113310