sme 100 – roundtable 51
January, he took the bold move of demanding all his customers paid by direct debit. Now average payment is just over 30 days, and the company “is spending more time doing something that is useful.”
Nash mentioned Santander had launched a new trade portal that helps businesses identify where the best importing and exporting opportunities are for their particular products and services. It helps company owners identify where to sell; how to sell and, critically, provides the contacts of specific companies they can sell to. It included a new financial product assisting payment to international suppliers within five days.”
Potter highlighted that the HMRC had been generous with its Time to Pay Scheme during the recession, but now was not so forgiving, particularly if a company had used it recently.
Business planning is so vital
Murray reported research indicating that some SMEs lose 20% extra profit by not having proper business plans.
MacDowall said a business plan covering all areas, implemented by a strong management team, was vital. Recruitment, for example, needed to be structured and signed-off 6-12 months in advance, with five-year forecasts. “Otherwise, it could become reactive and we wouldn’t have the staff to service the contracts our salesmen gain. Clients won’t wait while we recruit.
“Our annual business plan is reviewed monthly and agreed with the senior management team quarterly. Things change.”
Taylor: “Everyone is busy, usually reactive dealing with day-to-day matters involving customers, but it is incredibly valuable to step back regularly and see where you are going. That rigour is essential. You need business direction and a plan to get there. Just treat your business as if you have external funders to satisfy.”
Elliott said the business plan didn’t need to be “a tome of 50 pages with appendices” but SME owner-managers did need to visualise their personal objectives. “It can be a one-page plan, as long as it puts your business in perspective relative to your critical pinch-points, customers, markets, products or services, priorities and aims over the next few years.” A business plan is a written way of expressing an entrepreneurial thought process, she added.
Taylor added that a one-page business plan actually gets read, but “we also have quarterly reviews with our colleagues to disseminate and enthuse that mission across our whole team.”
Potter: “It is also about actually putting a date in your diary and giving yourself time to think about future plans. Otherwise it may not happen.”
Minchin admitted: “I love business planning but I dislike wordy business plans.” For him, keeping the business on course was largely about getting the right management information at the right time and constantly reviewing where the company is in line with its goals. “It’s an ongoing
THE BUSINESS MAGAZINE – THAMES VALLEY – MAY 2014
process because the world is changing so fast that you just can’t plan that far ahead.”
Where does SME work come from?
With business pace so fast, Minchin felt many SMEs gained work by being quickest to react to opportunities. “There is a lot of demand for content in our digital world and we support inhouse teams who know what they want, but don’t have time to deliver on their strategic aims.” The Internet world has no geographic boundaries and Zest Digital has just gained its first international client, publicising safaris in Kenya.
Opportunities are global, Taylor agreed, but the recession and ongoing technological change were key drivers. “People want to talk to you if you can bring down their costs.” Back in the early 1990s he had grasped the Internet opportunity, and now by becoming a niche cloud services provider, his businesses had a similar opportunity.
He also noted that market gestation periods were becoming shorter, and consumer expectations more critical for providers and suppliers.
Anns’ company provides specialist software to independent schools. “We offer unique products and add value for clients.” With the UK market well served, the growth opportunity was now in “oil-based and other new economies trying to tap into knowledge and service-based growth through adoption of international education systems including the UK.” Anns estimated that in three years the du Pré Group’s software activities would flip from 60:40 in favour of UK, to 40:60.
He accepted that du Pré should have sought more help from UKTI earlier. “Previously, we would target key events, get on a plane, turn up, look confident, and learn,” although this strategy has propelled the company from zero exports to 40% in six years.
Nash mentioned that Santander supported SMEs through international advice, trade missions and business ‘master-classes’.
MacDowall felt SFW’s opportunities still lay in central government, with the introduction of digital services. SMEs can get government work by becoming pre-qualified as suppliers, he advised. “There is a relatively high opportunity
cost associated with this as procurement pre- qualification can take a lot of time and effort but SFW has been successful in this area and the cost is more than justified by business wins.”
Taylor agreed, stating that his pre-qualified company was “starting to get some nibbles”, but had the time-consuming task of monitoring 77 online portals to potential government work. However, the CBI was making progress in its lobbying of the Government to meet its target of 25% SME suppliers, he pointed out.
David Murray
Nash queried if SMEs could handle the burden of government requirements, red tape and administration.
Taylor: “It is getting better. Even among large corporates, there is a very strong appetite to be dealing with SMEs. It is a big tick in the box for them.”
To compete, Elliott said SMEs needed to focus on quality. “Be really good at what you do and play to your strengths.”
Garden advised SMEs to differentiate themselves through skill and service. “Our firm is not the cheapest nor most expensive of lawyers but we pride ourselves on our abilities and quality of service, and being nearby and locally known can be a definite advantage.”
Remember, we are the heart of Europe’s Silicon Valley
Taylor always promotes the Thames Valley region to his international clients by saying his company is based in the heart of Europe’s ‘Silicon Valley’. “It’s a big driver for business. Perhaps we should have signs on the M4 saying “You are now entering the Thames Valley – Europe’s ‘Silicon Valley’.
Barry Anns
He applauded strategic work by the Thames Valley Berkshire LEP in promoting the region, lobbying to improve its infrastructure, housebuilding and warehousing. “We mustn’t forget that we already have a lot of high-value knowledge industries in this region.”
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