By Jon Penn
Whilst 89% of SME businesses in the South West responding to a recent survey by The Academy for Chief Executives said they were planning “increased growth” or “dramatically increased growth”, nearly 60% of businesses have to find other ways of funding that growth than traditional bank overdrafts or loans. For most businesses this was funding from cashflow or the Owners own resources.
Access to finance isn’t the only issue highlighted by the survey which went to a large number of SME businesses across the South West: 2/3rd of the business owners surveyed were “not totally confident” in their own abilities to lead their businesses. However we work with an outstanding group of business owners and leaders in ACE, from across all sectors, and one of the things I notice is that the really excellent leaders are always asking themselves –
What am I missing? What could I do better?
so I am not surprised that so many SME owners and leaders marked themselves down! The follow up question – What would increase your confidence? – revealed an overwhelming desire for more personal development, time & space in order to think, build strategies, and develop their managers & staff.
Some curious contradictions are shown up in the survey. While nearly 90% of businesses are planning on Growth, nearly 30% are planning no change or even [for 3%] a cut back in Marketing Budgets. This may be explained as a result of the massive up switch to digital marketing reported, and where LinkedIn was by far the most popular site with well over ½ the businesses saying this was a high priority tool for them.
When answering questions about how they measured their progress, there was an overwhelming [91%] response indicating increased profit but only 20% measured this as a ratio of sales. Fewer still measured cash generation or return on assets. This could mean that now the brakes are easing up on economic activity, people are going for sales volume without paying enough attention to which products or services or customers make the most profit, and then getting rid of some of the dead wood or even firing any toxic customers!
On staff development, the businesses reported placing equal emphasis on bringing “bright young things” into their businesses, as they did on developing their Boards and their R&D/New product/service development activities. While it is great to see the equal importance attached to these different areas, the overall scores in terms of importance were depressingly low, scoring only 2 out of a possible 5; this speaks to me of a massive opportunity to improve the performance of local SME’s.
For the full survey report go here
The Academy for Chief Executives works in the South West with mainly SME owner managed businesses typically in the £2m to £50m turnover range, developing leadership and helping transform business performance.
For more information contact Jon Penn
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