With the support of the Institute of Chartered Accountants in England and Wales, we recently commissioned the 'Geared for Growth' report to investigate the ambitions of SMEs in this country and the key factors that impact on their success. We wanted to find out what was pushing the forward and, more importantly, what was holding them back.
The good news is that the report found two thirds of SMEs are expecting to grow in the year ahead, despite the current economic climate. One in 10 business owners set growth as their number one goal. Healthcare, business and financial services and the media were the most ambitious industry sectors - classified by the report as ‘Thrivers’ - determined to make 2013 a success, despite rising inflation, a eurozone in turmoil and a lack of credit (Funding for Lending scheme or no).
Over half of the UK businesses we spoke to, classified in the report as ‘Strivers’, claim to have more modest growth ambitions but it was heartening to find out that only 5% were ‘Despondents’, who believed their business would downsize in the near future.
So what separates the Thrivers from the Strivers? Well, the report found that the former were twice as likely to recognise the role technology has to play in bringing about growth, compared with those who are content with the status quo. In fact, almost 80% of companies participating in the study believe that technology plays an essential part in their plans for growth, claiming it to be important or very important to help drive value through efficiencies and savings.
The UK has one of the strongest internet economies out of any developed country in the world. The internet accounts for 8% of UK GDP and UK consumers spend more money online than almost any other country. It is therefore critical that we are supporting our SMEs to make the most of all the opportunities that being online offers. It's a shocking statistic that while the UK’s most ambitious SMEs recognise that technology is key to their success, only around a third of SMEs have a transactional website. This means they are collectively missing out on benefits valued at £18.8bn a year.
We need to ensure that all small businesses realise the benefits that being online offers, and that they have the right skills to exploit them. Almost a quarter of businesses that took part in the research said that they are negatively impacted by the skills gap and need better technical know-how within their teams to succeed.
In a fast-moving digital economy, the companies most likely to succeed and grow are those with staff who have digital skills. Business can also help themselves to move from good to great by giving greater priority to training staff where needed and realising best value from their existing teams. Digital skills aren't just confined to those who work in IT – in the future every role in every company, whether that's marketing, sales, operations and so on, will need to know how to use digital effectively.
Technology suppliers like ours have a duty to make it easier for small businesses to take advantage of the power of the internet, and at TalkTalk, we want to do all we can to help SMEs to embrace technology. After all, companies that make use of the internet grow up to three times faster than those who don’t. And a Britain in which all of our SMEs are using the internet as a channel for sales, marketing and customer service will be a truly great one.
Dido Harding is the CEO of TalkTalk. Click here to read the full report.