The challenges faced by small businesses since lockdown in March have been unprecedented. It’s created extreme hardship for many and left some wounds that may never heal.
By Chris Weller, chief commercial officer at Allica Bank
But I think it’s important, too, to acknowledge the unshakeable resilience that the UK’s small business community has shown in responding to it. From launching online delivery services, adapting to meet new safety standards, or shifting entire production lines to produce PPE equipment. It’s been inspiring to see the ways many SMEs have adapted to the new reality we’ve found ourselves in.
There’s still a long way to go, though. And small businesses can’t be expected to see this through on their own. Banks like Allica need to take responsibility to ensure UK SMEs have the support they need ‘ not just to survive, but to thrive. Of course, many banks have already provided valuable support by way of facilitating the government-backed loan schemes to help SMEs stay on top of their cash flow. But the banks don’t just have a financial responsibility. Small business owners need the expertise and guidance of the banks, as well.
SME Guide to Success
As part of Allica Bank’s efforts to provide this kind of support to small business owners, we launched our SME Guide to Success. This report identifies six key drivers of success for small businesses and provides actionable advice on how they can be implemented.
To identify the six drivers, Allica Bank partnered with the Centre for Economic & Business Research (CEBR) to survey over 1,000 SME owners about different aspects of their business. We then compared the results of the 100 most successful SMEs in the sample with the rest of the respondents, and identified six common themes that the top-performing businesses demonstrated more than the others. These were:
- Provide regular training for your staff.
- Make time to focus on innovation and technology.
- Have a formal, long-term vision (and don’t forget it).
- Broaden your customer reach and find new markets.
- Develop a reinvestment plan to strengthen your business.
- Don’t be an introvert ‘ look wider and understand the power of your network.
Our intention is to provide an external perspective to help business owners narrow their focus onto the areas most likely to help them succeed at the time when they need it most. Every business is, of course, different. And how they interpret the individual rules will depend entirely on their specific circumstances. But all these factors will be relevant to every business in one way or another.
Let’s take rule one as an example ‘ providing regular staff training. There was a strong trend among the most successful SMEs we polled for providing ongoing training and development for employees. Of the top performing businesses in the survey, 47% provided training for employees at least on a quarterly basis, compared to just 32% of other businesses. Overall, 21% of respondents provided training every month, 46% did this just once a year, and 15% admitted they never provided any training for their staff at all.
Rule five, on the other hand, identified the importance of small businesses investing back into their business. It was, in fact, identified as the fourth most important driver of success by our respondents, behind overseas expansion, innovation and having a strong vision. Notably, of the best performing SMEs, 22% reinvested some of their profits in the past three years, with an average 9% of profits being redeployed. This is nearly double what those outside the top reported as reinvesting in their businesses.
The report is available to read for free at allica.bank/sme-guide-to-success. Each rule is backed up with expert analysis and practical advice for putting it into action. We have also linked up with six external partners to host a series of webinars that delve deeper into each rule, all of which will be made available online, too. We hope they will be of some help.
It’s all about collaboration
Running a business is a demanding and often lonely experience. No business owner can be expected to have all the answers, which is why it is vital that banks use their resources and knowledge to help propel the UK’s SME community back to growth. If our report can help even just one small business achieve success, then I’ll be happy. But I know it could be of use to every SME in the UK, so I do encourage you to take a look.
This is undoubtedly going to continue to be a tough time for everybody in Britain, both personally and professionally. But I know that, by working together, there’s a great deal we can do to reduce the pressure.
This article comes courtesy of Allica Bank, the new business bank that is dedicated to empowering small and medium-sized businesses to succeed. Having been granted their banking licence in September 2019, they use tailored expertise, local relationships and modern technology to deliver expert banking for business Britain.
Allica Bank Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (FRN: 821851). Registered office: First Floor, Eldon House, 2-3 Eldon Street, London EC2M 7LS. Registered in England and Wales with company number 7706156.
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