Why UK Business Advice is Broken
All the many claimants to provide small business advice seem to...
…home in on delegation, leadership, getting the team motivated and attending a webinar where an expert will reveal astounding solutions, as the answer to everything in the business, once you sign up to their newsletters.
94% of businesses have no management team.
And when you do sign up why is it that the global answer reveals itself to be that you need coaching or mentoring (for a hefty fee) wherein you discover that you are the problem and that you are actually being life-coached into becoming a better person and through that run a better business?
And when it then turns out that you do indeed have a marketing problem, or people issues, IT challenges, suffering losses or bad cashflow, your sympathetic mentor / coach will introduce you to their consultant friends who will charge you £500+ per day for an unknown number of days.
Hardworking business owners mostly know what they are doing
After all, they have to think of and do everything, day in day out, finding answers the hard way. So, when up against problems s/he just wants straight answers to immediate problems ie what steps must I take to make something happen right now?
They are already very good at making and supplying the product or service. They must be, or there wouldn’t be a business.
But they are often not so capable at marketing, selling, managing people and finances, knowing what technology to use, or managing a crisis. And they periodically wonder how to resolve longer term issues such as exit, growth, life / work balance, diversification, personal effectiveness or risk management.
It is for these issues that they seek, but rarely find, competent, practical, affordable, sustained, help.
And I’ll hazard a guess that very few of the ‘experts’ they meet have ever run a real small business and confronted such issues themselves
And by ‘real small business’ I mean it was their sole source of income for several years, financed wholly with their own money, had premises, invented products, made, bought, sold goods and services, held stocks, employed people or contractors, invoiced, chased payments, looked after customers, raised finance, managed cashflow, used technology and strove to make a profit, single handedly.
There are 5.8m such businesses in the UK that want to be helped with straight answers, but is anyone genuinely providing them?
Consultants and accountants aren’t too interested, because they are too small to pay them £500+ per day. Government writes them off as ‘the hard to reach’ because they don’t queue up to join the Growth Hubs, Local Enterprise Partnerships, Innovation UK, et al, in common with 99% of all businesses. They don’t do so because they either aren’t aware of these sources or having tried them, found it was too much like hard work to get their problem fixed.
Why are consultants and accountants too expensive for small businesses?
They have operating costs like us all, just living and working modestly amounts to £200 per day. Then not all days get sold, so call that £400. Therefore £500 per day is an essential charge to keep themselves afloat.
Then, the work needed to properly advise a business is time-consuming. First there is the internal and external research to understand the problem and its environment. Then analysis of the situation, benchmarking and identifying the options to present to the client.
Once agreed, a plan must be created setting out the actions to take. The bill for this will be in the £thousands and must be paid before proceeding further. Then, the advisor will wish to help the client implement the plan for a further weekly / monthly fee, at which point the client tries to reduce the first bill and refuses any further paid help. So, s/he now has a nice plan but neither the skills nor experience to implement it.
If the advisor tries to help by cutting corners in the above process to stay inside the business’ small budget, there is a big risk that the advice will be wrong.
Either way, neither the advisor nor the client can win, which explains why they dislike and distrust one another.
So, is there any way that small businesses can ever be helped with competent, practical, affordable, sustained advice?
Ideas...
The Government could reintroduce the Business Links and the Training and Enterprise Councils that paid for 5000 advisors to each visit and help 3 small businesses daily between 1988-2010.
That played a strong part in raising UK International competitiveness from 21st to 7th place. But even so, only enabled 50% to be visited annually.
In this way, over 22 years 1m businesses were helped, 20% of all businesses, at an annual cost of £3bn. A £66bn project.
The same service could be activated online which would reduce the cost to £1.5bn pa or for £3bn pa, help twice as many businesses.
Because we know it works, if taking so many years to show an effect.
The big problem is time in all its forms. Elapsed time to make a national impact and real time available to advisors to give quality help.
But if…
The proper consultancy processes could be automated online, time spent by advisors would reduce by 90%, bringing day rates down to below £50.
So, at that level, the smallest of businesses could afford themselves to pay up to 20+ days pa, enough to make permanent performance improvements.
Then, one advisor could handle 100-200 businesses at once through light touch coaching.
Backed by…national awareness marketing.
And a distribution system, to move reachable advice into every local community.
Even so, the problem would still remain that only 5% of businesses are reachable annually, and we no longer have 20 years ahead of us to engage with them all.
But here is what a national strategy could look like:
Invent software that can work online for any business owner to analyse and benchmark its performance and value now and as it could be
Show them their sales, profit and capacity losses
Show them what actions would close all the performance gaps
Set up a library of readymade practical action plans for online implementation
Train the 10,000 accountant practices that already have 50% of the business population as clients to use the software
Teach them how to market to the rest
Mail a free assessment offer to all 5.8m microbusinesses with a link to their local accountant
Cost of assessments – free
Cost of action plans £50 per month
Cost of action plan coaching by accountants £100 per month
Time taken per client – one hour per month
Link all forms of government funding for businesses to a mandatory assessment and report – action plans to be implemented where gaps are shown.
And the outcome would be a surge in business survival and national productivity.
See the Runagood® solution:
By Duncan Collins
Founder of Runagood.com Ltd