Blueprint for success: Growth
Investing in a better future
It may seem a statement of the obvious to say that SMEs in Britain are actively investing in marketing and product development to drive growth. But the fact that businesses are expanding, rather than retrenching, shows the mood in the sector is buoyant.
- entering new markets (35 per cent)
- strengthening existing client relationships (34 per cent)
- seeking to increase the efficiency of their marketing (27 per cent)
- developing new working partnerships (26 per cent)
- increasing productivity through new working practices (27 per cent)
- maintaining or increasing prices – only 12 per cent of small firms claimed they were cutting their prices
Maintaining investment in operational areas
SMEs are often run on tight margins and do not have the benefit of economies of scale so cannot easily find savings in areas such as equipment, premises, vehicles and training. As a result, the firms in this survey were looking to maintain their investments in these areas.
Advice and support
Nineteen per cent of surveyed firms expect to make savings on external advice. This is a difficult strategy, as cheap or free advice can be counter-productive, especially in turbulent economic times. Banks may be expected to play a significant role in this area over the next 12 months.
Where will the money go?
The largest areas of investment for British SMEs in 2011 are expected to be in marketing, IT and technology, and new product and service development, with 43 per cent, 26 per cent and 24 percent of SMEs surveyed planning to invest in these things, respectively.
These figures suggest that SMEs are sensitive to the uncertainties of the environment, are seeking to manage their spending and are being selective about where they invest their money. In other words, owner-managers are seeking to accomplish more with less to assist them in growing out of the recovery.