Posted on: 05/11/2021
A key Government objective is to promote growth in the UK through making it easier for businesses to set up and grow.
At the start of 2021, there were 5.5 million small businesses, accounting for 99.9% of the business population. SMEs are the backbone of the UK economy, driving growth, opening new markets, and creating jobs, making their contribution crucial. As the economy rebounds from COVID-19 domestic lockdowns, business confidence is at a record high, but the number of businesses experiencing difficulties and in need of support is also increasing.
At Exemplas, we have been supporting SMEs for over 30 years. Having delivered public sector contracts worth over £500m, we know what it takes to run a successful business support service, as well as understanding the challenges businesses face. In this article, we’re looking at what’s missing from the UK’s business support landscape and how these gaps could be filled.
In 2020, the Institute for Fiscal Studies found that the UK is one of the most geographically unequal countries in the developed world, ranking highly on most measures of regional economic inequality. Although not new, the concept of ‘left-behind’ regions in need of ‘levelling up’ has become especially prevalent in political discourse over the past year, and the UK Government is making changes to the way it supports local economies. Plans involve decentralising power and working directly with local partners and communities that are best placed to understand the needs of their local areas.
Government will also be working with local businesses on the future role of Local Enterprise Partnerships, ensuring that businesses across the UK have clear representation and support in their area. To help clarify what ‘levelling up’ really means, the Government will publish a landmark Levelling Up White Paper later this year, articulating how bold new policy interventions will improve opportunity and boost livelihoods across the country as we recover from the pandemic.
Access to finance
The COVID-19 pandemic prompted record lending to SMEs in 2020, totalling £54bn in the first nine months of the year as 1.5 million businesses applied for Government-backed loans. However, businesses now require additional finance to enable them to invest in growth.
Although there is an abundance of financial options available for SMEs in the UK, access to finance remains a challenge. Business owners can be confused when needing to access finance due to all the options available to them, as well as the application process. Paired with a fear of rejection and the time-consuming nature of the process many SMEs fail to unlock vital funding.
Helping businesses propel their growth by finding the right finance options is essential to their survival. On behalf of Innovate UK, we deliver Innovate UK EDGE in the East of England. Supporting businesses in their innovation and expansion plans, Innovate UK EDGE can assist businesses to develop their finance and funding strategy, including applying for funding, preparing for investment and understanding the plethora of funding and finance available for businesses.
Generic ‘one-size-fits-all’ support does not meet the needs of those experiencing sector-specific growth. There is no shortage of business support for those starting their venture, but for those scaling and looking to grow, the challenge remains daunting with a lack of specialist provision available. What is required is more bespoke, sector-specific support to meet the needs of different industries.
Exemplas leads on the delivery of Hertfordshire Growth Hub, the county’s flagship business support provider. We provide a tailored and blended approach to business support through licensing our diagnostic-based digital platform, Exemplas Connect, to Hertfordshire Local Enterprise Partnership, alongside a team of highly experienced business advisers available to provide support and guidance. By identifying what stage a business is at, what sectors it operates in and what challenges they face, we’re able to highlight specific needs and direct business owners to the most appropriate support.
More support for ‘regular’ businesses
Current business provision is often targeted more towards high-growth tech start-ups, leaving those who want to pursue a ‘more traditional’ business path at risk of being left behind. Businesses such as high street stores have been the subject of concern during the COVID-19 pandemic. The Office for National Statistics found that due to domestic lockdowns, the rise in online sales rose to a record high. This meant that high street sales fell by the largest annual fall on record. SMEs on the high street are vital to local prosperity and need support to survive and thrive.
In contrast, new research completed by Barclays Corporate Banking found that home and hybrid working patterns are likely to boost local high streets, predicting hybrid working could lead to 17,000 new businesses opening on the high streets over the next year. It’s essential to the success of ‘regular’ businesses that they receive support including digitisation, talent retention, growth and marketing to fully take advantage of the opportunities home and hybrid working can offer.
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