But while this is hardly a revelation, (frankly, we’d be worried if they weren’t hoping to grow their bottom line) if you delve a little deeper, the findings show that there is plenty for the nation’s small firms to be getting excited about, with many SMEs feeling some well-deserved confidence in their ventures.
Based upon the responses of 250 senior managers from UK-based SMEs, the independent industry report shows how the financial climate has produced two distinct camps within enterprise; 66% of SMEs, dubbed ‘stabilisers’, aim to match the growth of their competitors whilst a further 30%, the ‘accelerators’, intend to grow well ahead of the industry norm. By analysing how these two disciplines respond to the survey’s indicators of growth – money & finance, innovation, management, and technology – the ‘Thinking Bigger’ report demonstrates just how small and medium enterprises are directly courting growth.
Unsurprisingly, the majority of the companies questioned viewed finance as being the most vital factor to their growth. However they also viewed this area as being the most challenging, with almost half of SMEs identifying it as a problem area. This is perhaps reflected in the amount of businesses reliant on lending – a combined 44% said they were at least to some extent reliant on credit and overdrafts. Despite this, significant investment has been made in this area in order to improve business performance, with 54% of businesses investing in improved cash flow management.
Whilst it might be expected that their small size allows SMEs to more easily innovate than their larger rivals, the report finds that only 57% of businesses feel strong in terms of innovation. But not all business owners are sheepish about their R&D efforts: more than two thirds of those identified as accelerators feel this is an area in which they excel, suggesting that increased levels of innovation and growth may go hand-in-hand. The dicey economic climate is one reason given for upping levels of innovation within a company, as businesses try to cut costs and adapt their offerings to meet changing customer demand.
Management is the area in which SMEs feel the most bullish. This could be partly due to recent investment in the area: 55% of SMEs have invested in management over the last six months, with the main focuses being organisation / planning and company restructuring. And this is a key focus in the short-term future too, with two thirds of SMEs predictingthat evaluating and challenging business processes will be important to achieving growth.
Perhaps the most surprising of the report’s findings, however, is how SMEs relate to technology. Despite the fact that 88% of SMEs are reliant on technology for their day-to-day operations, it is still the factor that enterprises least consciously associate with growth. But change is afoot: in the last six months, 62% of small firms have invested in technology, which means more enterprises have invested in technology than either business management or financial operations.
All in all, the ‘Thinking Bigger’ report shows that SMEs are committed to creatively approaching growth and seem to be aware that despite volatile market conditions, they need to make the necessary investments – not least in tech. For the most part they remain bullish about the chances of achieving success in a tricky market place. Will their stoicism pay off? Let’s hope so….
