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What a business support agency can learn from its clientsA topical subject at the moment is what business support should be on offer, how it should be delivered and by whom. Which is fair enough as nothing should escape evaluation and adaptation in any form of business. And currently anyone who's involved with support delivery or provision seems to have been infected by a level of political promiscuity that is verging on the unhealthy. But we also need to apply some proper perspective to this. A key fact, that is too often overlooked, is that the number of businesses who tap into, or flirt with, their local support services are in the minority. The reality is that most new start ups, existing traders and enterprises give publicly funded/delivered support a wide berth, because they either decide it's not for them or find they are ineligible for it. Or, they are just oblivious to what is available. The Department for Business, Innovation and Skills (BIS) and national Business Link and their predecessors have always generally claimed that somewhere between 20% and 40% of the UK's small business base tap into or at least enquire about the support that is available. The actual figure is of course impossible to measure with complete accuracy on a national basis. But taking into account a degree of over-exaggeration (if not triumphalism) on behalf of the policy makers, it would be fair to argue that a figure of around half of that is nearer the mark. In other words, putting everything into perspective, around 10-20% of prospective new start ups and existing traders seek business "support" - leaving 80-90% who don't go anywhere near it. Arguments are made that support would be more widely used by making policy more inclusive, such as for able-bodied men, shop owners, and those cash-only traders who barely operate on the fringe of the tax system, if at all. And on the advice of Lord Sugar, the Business Link service should be more widely promoted in a national marketing campaign. On the other hand, many will argue that the cost of advertising Government support is already excessive for what it allegedly delivers, and it could equally be argued that the way business support is promoted could be much more effective and appropriate within, or even under, its current budget. After all, isn't that the exact advice a support agency should be giving to its own business clients? Get more out of your marketing budget, use guerrilla tactics that will track down your clients, develop a formal referral system, build a reputation for quality and more clients will find you and return to you. And so on. So what can we learn from history on this? In 1979 the first three organisations operating as enterprise agencies were formed, although it wasn't until 1982 when the name 'local enterprise agencies' was nominally used when they became formally recognised by Government. By the end of the 1980s there was a network of 300 of them. What is significant is that although the numbers of enterprise agencies has fallen to nearer 100 now, many of those that were started in those early days are still in existence, and have managed to survive and in some cases grow into the exemplars that they are today. And that is despite the number of funding/scheme and regime changes that have taken place in that 20-30-year period. The point about their continued existence is centred on three crucial points: 1) There is a genuine, usually very local, need for their services. 2) They have continued to meet that need, to the satisfaction of their clients. 3) They have managed to operate independently of the regime changes and funding fiascos that went with them. Given their provenance, the enterprise agencies have always had to fight for the resources that they needed, and as a consequence many of them have ended up being as entrepreneurial as their clients. Those that have managed to operate through independence of action and finance have led them to being responsible for their own reputation. And guarding that reputation, in turn, has been the best way for ensuring that those agencies have offered the quality of service demanded by their clients. What every business support agency should be telling their start up or small business clients is that if they don't provide a service that meets customer needs to an acceptable standard, or if they are too reliant on a single customer or source of revenue, then they may not be in existence for long. Business works that way. Identify customer need and deliver it. Quality and relevance always prevail. And for a business support agency, whatever its name, the story is the same. Support agencies in all their current shapes and forms are far from perfect. However, they do a number of things extremely well that their clients appreciate, but they also do many things badly, that need to be improved or eliminated. Eight or nine out of ten enterprises in the UK always manage, and always will manage, to provide for themselves, or find their own "private support". But the 10-20% of enterprising Brits that genuinely do require help and support each year is still a hell of a lot of people - between 500,000 and one million of them. Therefore getting business support intervention right, or at least moving in the right direction, is a critical, yet entirely achievable objective if we can share and learn from the lessons, successes and failures that have gone before. And there are plenty of those, for sure. If you'd like to comment on this article, please do so below. Add a comment:4 comments so far:Jerry Bennett (28 Apr 2010) A very interesting article, with an awful lot of truth in there. Given that we are about to see a major cutback in government financial support for business – no party has ring-fenced it – then Enterprise Agencies specifically need to take a fresh look at their role in business support. They will need to return to their “Business in the Community” roots, and start to put together packages of assistance that are right for their local communities, and consign central or regional government schemes to history. The point made about there being a “genuine, very local, need for their services” is absolutely true, and that local need is likely to become more extensive in the next few years. Where is business support going next? Ruth Lowebridge’s comment about people turning more to the Internet is partially correct, but is it the future of business support? I suspect not. The Internet is a powerful tool when used in certain circumstances, but what happens when you interrogate it to find help? If the question you put to it is one where there is only one right answer, it is very good indeed. If the question is one where there are numerous possible right answers, it is suddenly a lot less effective. It cannot help you make judgements. If you are an experienced businessman, you can probably note all the possibilities, and make your own judgement, based on previous experience. If you are new to business, and have no previous experience, where do you turn? Suddenly the man in the suit (to use Ruth’s phrase) becomes mighty important. With unemployment increasing, and a greater number of potential clients coming from the ranks of the unemployed, possibly long-term unemployed, then the man in the suit becomes critical. Because the greatest need of the unemployed is not an understanding of market research or financial planning, but good, old-fashioned confidence. Talking your ideas through with a fellow human being can boost confidence no end. Try getting that from the Internet! In fact an unemployed client coming into contact with the Business Link site for the first time could have all remaining confidence totally shattered, such is the complexity of the site. I personally think the Business Link site is damn good, but I have been in business for many years. It is a good site for an established small business, and I hope it survives the coming upheaval, but it is no site for a nervous beginner. The percentages comment is also very interesting. I also reckon that 20% of start-ups or small businesses is the maximum we are reaching. In fact as regards start-ups, it is almost certainly a lot lower than that. Our regional manager from Barclays Bank reckoned that 90% of new starts were still failing to survive more than 12 months. So there is a major problem in business support provision, and that is where too many Agencies are currently failing. How welcoming are Agencies? Do they seem remote and unapproachable to potential clients? A comment from one disenchanted client was that “they didn’t want to know about people like me. I didn’t have a definite idea, so they said they couldn’t help”. I will not mention the Agency to which he was referring, but I have come across attitudes like that too often for comfort. Agencies are going to have to get down and dirty if they are to have any future at all. High-minded accountancy advice has its place, but it is a very small place in a big scheme. If most of the funding is to be raised locally, they will need to involve the “hard to reach” groups like NEETS or long-term unemployed, single parents or the 50+ group. Someone in the Agency will need to talk to clients in terms of business ideas, creativity, imagination and lateral thinking, as well as along the more traditional lines of marketing and financial forecasting. Seminars will need to be offered – daytime and evening – on a variety of business and associated areas. There has to be an end to the “this is what we are offering – take it or leave it approach” which has bedeviled Agency provision in the past. And all this will probably need to be done on a shoestring budget! If the majority of future finance is raised locally, and possibly matched against central government or European funds, then local councils are going to demand a massive increase in the percentage of clients helped. At start-up level, that probably means reaching 75% of the potential market in some way – one-to-one advice, ideas seminars, traditional business seminars and home study provision - and an awful lot of that will need to be done on an outreach basis. The current “this is where we are, come to us and don’t be late” approach has to go. What is that in hard numbers? In Cumbria, Barclays Bank estimated that 2,700 businesses started in 2008. Given that a fair number of people would have looked at self-employment and backed off, it is not unreasonable to assume 4,000+ individuals taking a look at self-employment in any one year. At 75%, that is 3,000 people for the three Enterprise Agencies plus the Chamber of Commerce to help in any 12 month period. That is a tough demand, but if we fall below it, then the County and District councils could move their money elsewhere. And to achieve those numbers effectively we will need to be very good indeed at meeting clients needs. Can we do it? We probably can, so long as we get across the message that self-employment is a multi-disciplined issue, and there is always something else you need to know. Your local Enterprise Agency should be your regular point of contact. If they don't know the answer, they can direct to someone who does, probably better than bank advisers or accountants. All Agencies face a tough future, and will need to change their ways of working. If they try to carry on as they have in the past, they may have no future at all. Jerry Bennett Tim Walby (28 Apr 2010) An excellent article, but one aspect of business support not touched on is the question of public funding of the support. Most of the 100 or so enterprise/business support agencies the article refers to offer at least some services which are free or heavily subsidised, normally due to some form of public subsidy. At a time when public spending cuts are going to happen whatever the result of the election, is there evidence that subsidising the estimated 10%-20% of new businesses which seek support from such agencies, represents good value for money for the economy? Ruth Lowbridge, SFEDI (25 Apr 2010) What an interesting debate – extremely well written and highlights the challenges faced by the wide range of support agencies trying to provide a good service against a background of constant change. It’s even more interesting as the debate continues as to who should really be offering this service and how should this be funded. It is widely recognised, and our extensive research shows, that alongside these support agencies operate an army of business support practitioners offering advice, mentoring, coaching and training either officially or unofficially and it is this type of support that potential or existing business owners value most. This support comes from
The question is why do individuals prefer to engage with this group of people rather than those funded by govt to offer this advice and support? Research tells us that more and more people are turning to the web, online and offline networks for information and ideas so it should come as no surprise that the need for ‘old style’ face to face business support is diminishing. Research also tells us that the face of business is changing and therefore the stereotypical meeting with ‘man in a suit‘ is rarely what prospective and existing business owners want or need. SFEDI, as the UK recognised expert body in describing good practice in Enterprise and Business Support has undertaken extensive research and into what you need to be able to do, know and understand in order to start and run your own enterprise or support (adviser, coach, mentor, broker, trainer) prospective and existing business owners. These descriptions of best practice are developed in consultation with the whole of the UK enterprise training and support sector and are recognised by government for accreditation and qualifications purposes. They are commonly referred to as 'SFEDI standards'. Our standards and the SFEDI Advisory Board's (all the major national small business membership and business support organisations) Enterprise Manifesto identify what every prospective or existing business owner (1 in 7 of the adult workforce ) should expect from an adviser, coach, mentor, trainer or broker whether they are paying for the service or receiving government funded support. Our standards and resulting qualifications are continuously improving the quality and enterprise friendliness of the support and training available to prospective and existing small business owners. Exemplars are also important in driving up quality and the top individuals were recognised at the SFEDI Advisory Board's 8th Annual Enterprise Support and Training Awards at Kensington Roof Gardens last week. The controversial aspect associated with SFEDI over the last 15 years has been our standards setting work for those working in publicly funded support roles. Some people may view these standards as nothing more than extra bureaucracy and red tape, however I would ask those sceptics to look at our current standards, revised with the backing of the sector for the fourth time, and ask themselves, ‘ Is this not the minimum level of service I would expect from someone offering life changing advice and support?’ As a recently approved Awarding Organisation, SFEDI Awards has positioned itself as the leading player in a bid to professionalise an industry which, although the foundation stone of future economic growth and recovery, is pretty much unregulated. By providing qualifications and routes to progression through continuous professional development, SFEDI Awards is leading the way in an industry currently regulated by the millions of pre start, start up and existing business owners using support services. The SFEDI UK Directory of Business Support Practitioners identifies those individuals who are SFEDI Accredited and each member of the directory carries a card which denotes exactly what they are qualified to offer. A way of improving the service offered by Support Agencies would be to ensure that all of their business support practitioners were ‘up for the job’. My own experience of receiving publicly funded business support, as a business owner, has been disappointing to say the least. Highly performing companies employ and continually develop highly performing staff. Through its network of local Centres of Excellence, SFEDI Awards offers a range of development programmes and qualifications for all business support practitioners including, business advisers, social enterprise advisers, mentors, trainers and coaches. There really is no excuse for offering average or poor business support. Milly (22 Apr 2010) I found this article very confusing...I scanned the first few paras not knowing what a business support agency was, hoping for some definition. I gave up reading by the third paragraph because I had no idea what the topic was about and found myself getting unwelcomely stressed as a result!
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TODAY: 5 February 2012
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