DOI: 10.5176/2251-2038_IE13.04
Authors: David E Gray, Mark NK Saunders and Harshita Goregaokar
Abstract: There are approximately 4.5 million businesses employing less than 250 people in the UK, providing a total of 13.7 million jobs, equating to half the private sector workforce in 2011. However, while such Small and Medium Enterprises (SMEs) are of importance, it is their durability that can be considered of greater significance. Much of the research into small firms has focused on their failure. The danger of this approach is that it identifies what has gone wrong, but may fail to discover what they need to get right. The approach of the current study, then, was to focus on the triggers that lead to SME success, as a way of highlighting more effective strategy decisions for firms themselves, and to inform better policy decisions for government. A return of over 1,000 survey questionnaires completed by SME owners/directors or senior managers, 20 in depth interviews and 13 focus groups, makes this one of the largest surveys ever into the strategic management of SMEs in the UK. The main findings are that small businesses, at start up, finance themselves through the use of personal and family savings. At later stages they again use personal and family savings but also reinvested profits. Loans from banks come in a disappointing third place. Small businesses also realised that they need to monitor cash flow on a regular and accurate basis. Successful SMEs see the need to use social networks and do this through a strong engagement with web technology (including LinkedIn and Twitter). Search engine optimisation is key. SME owners are innovative but not rash risk-takers (they would usually be risking their own money) and they learn from crises. Many use outsourcing to keep control of cash flow.
Updating...