SMEs reckon skills shortages and a lack access to growth capital are the biggest barriers to business, with research suggesting these issues are far more pronounced in the UK than anywhere else in the world.
A poll conducted by (the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) over an 18-month period found that that compared to SMEs in other markets, concerns about skills shortages were expressed almost entirely by those in the UK, with 15% of UK respondents highlighting the issue.
Cash flow problems were also flagged up by the UK’s SMEs, who were almost twice as likely to cite securing late payment as a problem than larger businesses.
Despite SMEs across the globe reporting greater access to growth capital, small businesses in the UK did not see much improvement.
Rosana Mirkovic, ACCA’s head of SME policy, said: “Cash flow and access to finance difficulties are not new to SMEs, especially during what is a very fragile time of recovery for the smaller end of the business spectrum. However, our global analysis revealed trends that are very specific to the UK SMEs, most notably a skills shortage. 15% doesn’t sound like much, but the fact is it barely registered as a problem with the small business communities elsewhere in the world. It is unique to the UK.”
Mirkovic said that SMEs are frequently referred to as the lifeblood of the UK economy, but right now companies face obstacles that their overseas counterparts did not.
“In the USA, for example, access to growth capital has increased considerably over the last 21 months. That’s not the case in the UK,” she said.
The survey also revealed that 90% of UK SMEs had experienced negative business outcomes in the current economic climate, including problems securing prompt payment, while access to finance was also an acute issue for smaller companies in the UK.
“Late payment problems have actually increased significantly for small and micro enterprises since late 2011 across the world, when 33% cited it as a business outcome compared with 48% in the first half of 2013,” said Mirkovic. “This increasing trend was partly driven by the smallest business in the UK, where 49% highlighted it as a pressure in the first half of 2013.”
She added that given there was still a lot of uncertainty clouding the horizon, SMEs needed to consider a new approach that involves prioritising investment and seeking internationally-focused market growth, as they prepare for a more stable economy.