Paul Lawton, General Manager of SMB at O2 talks to us at Business Matters and gives us his reaction to Lord Young’s report:
The proposals outlined in the report include a removal of the start-up loans age cap, making it easier for small businesses to bid for public service contacts, and encouraging firms to get expansion advice through the creations of a £30m voucher scheme.
By Lord Young’s own admission, all of these recommendations were made with micro businesses – those with 10 or fewer employees – in mind. Accounting for 95 per cent of businesses in the UK, widespread success for this sector would have a truly transformative effect on our national economy.
But we cannot expect the government to single-handedly solve the problem, and I do believe that larger businesses have a huge role to play in providing solutions for small companies. Whilst government initiatives and recommendations provide a vital backdrop, private enterprise can offer a huge amount in encouraging and developing business growth – and from our perspective this means encouraging small businesses to embrace digitisation.
Encouragingly, it appears that there’s a real willingness from SMBs to move into the digital world. We recently conducted some research which found that 72 per cent of businesses believe that keeping up with the latest technology is important to their business – with 23 per cent believing it is extremely important.
They’re absolutely right. Embracing digitisation can provide smaller companies with a global platform to showcase their products and services, reduce costs, improve customer service and reduce costs; all of which can give them that vital edge against their larger competitors.
For example, even just having a website and engaging in social media mean that even as a micro business, you can attract customers from all over the country – and indeed the world. An SMB ignores this opportunity at their peril. We recently calculated that SMEs without a website are collectively missing out on £13 billion a year from missed sales.
And once you have attracted this customer base, it’s vital to keep them happy – as they’re arguably the most powerful engine of growth. Our same survey found that, for most consumers, good customer service means being able to contact an SME in a swift and timely manner. By equipping your staff with technology which allows them to work flexibly, they can do just that; responding quickly to customers and making sure that problems are efficiently dealt with.
From a personal standpoint, I believe that fostering innovation and giving small businesses and start-ups the tools they need to grow is vital. As a result, I mentor start-ups in our technology incubator, the Wayra Academy, in addition to ensuring that advice on the best digital solutions we provide is available to our small business customers.
While an incubation model like Wayra will not be an option for every growing company, there is much that SMBs can do themselves. Every company should be looking internally to determine how they can operate more efficiently – but when you’re desperate for growth this is even more vital.
Whilst I would argue that any company aiming to streamline business models and operations should look to digital solutions, the good news is that the micro businesses highlighted by Lord Young are among those best placed to adapt.
The recommendations set out in Lord Young’s report are a positive development for small business owners across the country, and should provide a boost to the entrepreneurial culture that’s growing in Britain.
However, recommendations and proposals alone are not enough. If we want to unlock Britain’s potential for growth big businesses need to play its role, but collectively small businesses need to embrace the digital economy and ensure they’re making use of the latest technological developments.