Major report reveals growing number of SMEs seek strategic advice – but more could still be benefiting from opportunities.
The number of SMEs seeking strategic advice to help grow their business has increased, according to a leading report that gives a detailed snapshot of the current health of the sector.
However, the latest Longitudinal Small Business Survey shows that those seeking external consultancy still remains comparatively low, with just under half of medium-sized businesses seeking advice and 38% of small businesses opting for assistance.
HWB’s SME and OMB specialist David Brookes said a swathe of the sector currently acting in isolation may not be making the most of the opportunities available, including tax reliefs and operational efficiencies, that may help them thrive.
But Brookes predicted that more and more SMEs – particularly those in the export business – would be seeking external assistance from advisers as Britain’s departure from the EU rumbles on.
The statistics have been detailed in the leading government survey, which covers employers with up to 250 staff. The survey showed that the use of consultants had increased since 2016, with a 7% increase on businesses seeking accountancy advice.
Among the businesses seeking external advice, around a third sought assistance on business growth, 17% for financial advice for the general running of the business and 16% on improving efficiency and productivity.
The survey also revealed that 36% of SME employers had reported growth in turnover since a year previously, 43% had approximately the same turnover and 19% had a fall in turnover.
The most commonly cited obstacle to business success was competition in the market, which was mentioned by approximately half of SME employers. The three other most cited obstacles were regulations and red tape, taxation, and staff recruitment and skills.
Commenting on the findings of the survey, Brookes said: “The survey shines a magnifying glass on the SME sector and there are certainly lots of positives to take from the report.
“Britain’s SMEs have a long history of innovation and tenacity and we continue to see this with growth in turnover, despite trading in potentially difficult conditions as Brexit uncertainty continues to bite.
“It is no surprise to me that more businesses are seeking strategic advice, but I would argue that too many enterprises are still acting in isolation and may benefit from a more collaborative approach. Tax compliance remains a headache for business leaders and it’s fair to say more organisations could be benefiting from strategic tax advice and support.
“Red tape continues to be a barrier for businesses, but I would suggest that this burden could be reduced if more organisations sought consultancy and implemented innovative solutions.”
One of the key strategies for 2019 will be outsourcing, which more and more SMEs are adopting to be more competitive. The starting point is a strategic review of business pain points to find solutions that will remove administrative burdens, ease financial pressures and give decision makers more time to focus on profitability improvement.
Triggers for outsourcing include outgrowing your current back office set up, business expansion that requires more timely and sophisticated financial information, or simply wanting to do something different.
Brookes added: “Running a business today is challenging. There are more distractions, more time needed to ensure compliance with rapidly-evolving regulations and less time to devote to key actions.
“Outsourcing may be the single most effective way of helping your business get ahead. Owner-managed businesses have faced a particularly challenging operating environment over the past two years and there is a general trend towards outsourcing to reduce the administrative strain.”
HWB, one of the largest independent accountancy and tax advisory practices in the south, has a renowned pedigree for delivering strategic advice to help businesses grow. With an emphasis on intelligent solutions, its experienced team also offers a number of bespoke outsourcing solutions, including bookkeeping, payroll, VAT return processing, and management reporting.
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