Major report reveals growing number of SMEs seek strategic advice – but more could still be benefiting from opportunities

The number of SMEs seeking strategic advice to help grow their business has increased, according to a leading report that gives a detailed snapshot of the current health of the sector.

However, the latest Longitudinal Small Business Survey shows that those seeking external consultancy still remains comparatively low, with just under half of medium-sized businesses seeking advice and 38 per cent of small businesses opting for assistance.

HWB’s SME and OMB specialist David Brookes said a swathe of the sector currently acting in isolation may not be making the most of the opportunities available, including tax reliefs and operational efficiencies, that may help them thrive.

But David predicted that more and more SMEs – particularly those in the export business – would be seeking external assistance from advisers as Britain’s departure from the EU becomes a reality.

The statistics have been detailed in the leading government survey, which covers employers with up to 250 staff. The survey showed that the use of consultants had increased since 2016, with a seven per cent increase on businesses seeking accountancy advice.

Among the businesses seeking external advice, around a third sought assistance on business growth, 17 per cent for financial advice for the general running of the business and 16 per cent on improving efficiency and productivity.

The survey also revealed that 36 per cent of SME employers had reported growth in turnover since a year previously, 43 per cent had approximately the same turnover and 19 per cent had a fall in turnover.

The most commonly cited obstacle to business success was competition in the market, which was mentioned by approximately half of SME employers. The three other most cited obstacles were regulations and red tape, taxation, and staff recruitment and skills.

Commenting on the findings of the survey, David said: “The survey shines a magnifying glass on the SME sector and there are certainly lots of positives to take from the report.

“Britain’s SMEs have a long history of innovation and tenacity and we continue to see this with growth in turnover, despite trading in potentially difficult conditions as Brexit uncertainty continues to bite.

“It is no surprise to me that more businesses are seeking strategic advice, but I would argue that too many enterprises are still acting in isolation and may benefit from a more collaborative approach. Tax compliance remains a headache for business leaders and it’s fair to say more organisations could be benefiting from strategic tax advice and support.

“Red tape continues to be a barrier for businesses, but I would suggest that this burden could be reduced if more organisations sought consultancy and implemented innovative solutions.”

To download the report click here.

For advice on improving your business strategy and profitability, call David Brookes on 023 8046 1216 or email davidbrookes@hwb-accountants.com