top stories

These comments have been drawn together by members of ACCA's Small Business Committee. We consider the general direction being taken at this stage, making only a limited range of detailed suggestions. We shall be happy to review the strategy in greater depth as it takes shape.

Setting a strategy

ACCA welcomes the move to establish a national SME strategy, it is long overdue. We believe that, if applied in depth, the approach suggested will help to ‘celebrate diversity’ whilst minimising any disadvantages of gaps and duplication in policy and support provision.

However, the paper's goals, particularly the aspiration that ‘the UK should, by 2005, be the best place in the world to start and grow a business’ are extraordinarily bold. We understand that ‘Think Small First’ is due to be backed by a specific Action Plan. In the absence of such a plan with a strategy to deliver objectives and targets with time scales, the strategy is little more than a ‘Mission Statement’. Whilst the document contains much that is worthy of support, the devil lies in this lack of detail, highlighting the urgent need for the follow-up Action Plan. The real proof of success will be demonstrated by the achievement of a range of individual benchmarks and targets focussing on individual SME issues, which together will set a series of milestones to the final objective.

Joined up government

One of the main tasks of the new Small Business Service is to ensure that the needs of small businesses are taken seriously by all parts of Government. All agree that the small business community should have a more powerful voice to articulate its situation, to improve business support and to diminish regulatory burdens.

Yet while the paper offers the prospect of progress in all of these areas, some hard headed proposals will be required to give the aspiration of joined up government a prospect of being turned into reality. The document states that it will develop a Government-wide strategic approach and that ‘it covers those parts of government who interact regularly with SME’s, either as providers of services or infrastructure for SME’s or as regulators of the business environment within which SME’s operate’. However, there are no specific plans or assurances that other parts of compartmentalised government will not undermine the objectives stated or will ‘buy into’ the strategy.

Departments such as HM Treasury or the Department of Social Security may well continue to act with their own policy priorities in mind when implementing policies that effect small firms. SBS's partners will want to have greater confidence that Government's relationship with the SME sector is going to be joined up.

A commercial dimension

‘Think Small First’ covers the main issues and sets out ambitious goals and objectives but does not address either the issues that drive SME success and failure or what to do about those issues. The next draft needs a much stronger commercial and economic focus.

For instance, one ACCA commentator noted, with some justification, that "para 39, looking at the role of private risk capital, seems to offer the first powerful recognition that there must be a focused commercial approach and that the ambitions behind the SBS must be based on economic outcomes rather than socially acceptability".

Performance Indicators

The benchmarks of paragraph 52 are enormously important. ACCA, like many other commentators has long felt that SME policy needed measures of performance. As yet the proposed performance indicators do not appear to link into the goals or the objectives.

‘SMART’ (Specific, measurable, achievable, realistic and time bound) objectives will ensure performance indicators that will be specific enough to quantify ‘success’. These should relate to the sequence of events for and the building blocks for success. Any benchmarks must also take into account the extraneous factors that always impact on final performance.

National Marketing and Brand Management Strategy

One major strategic gap is the lack of a national marketing strategy to help eliminate confusion in the market place. It should be designed to both raise SME awareness of the SBS nationally and Business Links locally. The draft proposes that the strategy will ‘maximise the advantages of variety whilst minimising its drawbacks', yet does not relate this objective to the issue of marketing business support. The draft needs to follow this principle through to grass roots level.

Raising Standards of Support

The draft does not address this issue or propose any measures to ensure the consistent quality of SME support services nation-wide. ‘Think Small First’ is an opportunity for the SBS to stipulate that small businesses should expect first class business advice and support, with leverage through the Business Link and learning and Skills Council contracting process. ‘Second best’ cannot continue.

Comments on Specific Paragraphs

Marketing (para 20)
Marketing, along with financial management, should be added as a key skill lacking in some SME’s.

Key objectives - focus on key areas (para 21)
Changes in culture and environment seem to us to be the two key objectives from which all else follows. The other 4 key objectives are, to us, benchmarks of changes in culture and environment and should be addressed as such, along with the other benchmarks in paragraph 52.

Business environment (para 32)
It may be that it is also appropriate to mention the role of incentives at this point. The principle that tax or other incentives may be used to circumvent market failure should be recognised.

A stronger voice required? (para 33)
We wonder if the tone of Government commitment suggested is too passive? Phrases such as ‘require the SBS to promote the needs of small businesses in all areas of government policy’ need to suggest a much greater determination.

Resources for Business (para 35)
The draft pays the briefest recognition to the role of the private sector. Effective partnerships between private sector business support and publicly supported agencies are essential if business support services are to reach significantly further into the small business community. There are, for instance, well over 100,000 professionally qualified accountants working in and for the SME sector, compared to a couple of thousand staff working in front line support roles in Business Links and similar agencies. Effective networking between public and private sector business support professionals has the potential to add enormous synergy to the capacity of business support services to strengthen the SME sector and should be acknowledged and prioritised.

Continued support (para 43)
We give particular support to this paragraph. There is so often a mistaken assumption that once an SME is up and running or once a key problem has been solved, there is no need for further support. One of the key issues is to develop the economically motivated involvement of 'super Mentors' with equity involvement in the enterprise and thus a shared incentive to promote success. We also strongly support the commitment to change attitudes towards business failures.

Conclusion

ACCA wants SBS to succeed, thus we adopt the role of a 'critical friend'. We support almost every paragraph of 'Think Small First'. Yet seventeen months after the SBS was announced, time is no longer on its side to deliver tangible wins. The strategy of ‘research’ and then ‘action’ is far too slow. There is a vast reservoir of knowledge in existence. SBS needs to start to work to more action specific, if limited targets that are quickly, readily and visibly achievable. An action plan must follow 'Think Small First' as quickly as possible.

Back to top