Small Business Growth About More Than Credit
Like all businesses, SME / SMB sized companies need cash. In the US, Gallup’s Chief Economist, Dennis Jacobe has been talking about the fragile state of the economy and how credit is hard to come by for small businesses.
In the same report, businessman William Hall from the International Franchise Association says that 6 out of 10 new jobs are created in the SME / SMB sector, but because of the credit situation many more jobs that could be created are not.
In the UK there is a general assumption that small businesses and entrepreneurship will fuel an economic revival. The government is actively encouraging growth through funding with Local Enterprise Partnerships (private sector led), but the picture is still hazy as to how much of the funding will be channelled and when it may start to become readily available.
It is also interesting that many of the big UK banks (Barclays, Nat West and HSBC to name three of the biggest) are offering small business support for growth in TV and radio advertising campaigns. Almost as if they had been told to make an effort by someone...
The problem with all this is that money is not the answer to generating growth, although it is part of the answer. We are going to need something better than simply available credit.
Assuming credit conditions do improve in the medium term, smaller businesses might feel less pressure on their cash flow and start thinking about planning for growth. Having available funds to invest will mean questions / decisions such as:
What is my 3 / 5 year strategy?
What are my Core values?
What is my Core vision?
Where are new markets for my existing product?
Is there an opportunity to develop new products?
Are R&D resources available?
Do we have production capacity?
These questions and many others besides are not easy to answer for people who are “at the coal face” day in and day out and this is exactly where many business owners find themselves The economic downturn has necessitated lay-offs leading to an “everybody pitch in together” culture. Not in itself a bad thing, but not good for making time to plan a business strategy.
In the long run, a support network will be needed to provide good quality guidance, analysis, advice and hands-on, action-oriented people to engaged with small businesses in strategic processes.