Business schools should increase focus on SME support, says Saïd Business School Dean Soumitra Dutta.
Analysis by Saïd Business School at the University of Oxford and Goldman Sachs has revealed the views of some of the UK’s leading, high growth small to medium enterprises (SMEs) on the current economic crisis, showing the significant challenges many are facing.
The data comes from the Goldman Sachs 10,000 Small Businesses UK Programme (10KSB), delivered in a partnership between the global financial institution, Oxford Saïd, and Aston University. It is uniquely placed to capture insight, with 2,200 SME business owners having joined together in programming designed to help them take their businesses to the next level.
The survey of SME business leaders, from multiple sectors, including food and beverage, clothing and technology, showed:
- 68% believe the current economic challenges are the same or worse than at the height of the pandemic
- Only 17% of alumni believe the Energy Price Guarantee for businesses up until March 2023 is sufficient
- 65% of alumni have already increased their prices and 10% have already been forced to lay people off
- 76% have already been negatively affected by the ‘war for talent’ and expect it to restrict their ability to grow in future
- Looking ahead to 2023, only 16% have confidence in the broader economy.
Since launching in 2010, 10KSB has built a powerful SME alumni community through a unique partnership, leveraging the world leading education and academic rigour of Oxford Saïd and the expertise and insight of Goldman Sachs.
Joe Formisano, founder of wood-fired oven company DeliVita, is a 10KSB alumni and took part in the survey. Commenting on his experience on the programme and the current economic climate, he said:
‘10KSB has been critical to our growth as the business now has a solid foundation and structure in place. This means I’ve been able to focus on future direction and continued growth, doubling turnover year-on-year and expanding into 24 different countries. It is a lonely position being a business owner but the alumni network allows you to lean on others with similar issues and learn from their experiences.
‘It does not feel like the government is supporting manufacturing in the UK, for example from a funding perspective, we have requested a small overdraft from a bank we have worked with for four years and it has been refused at a time where we need it to buy stock and fund growth. We don't want to have to go to alternative lenders who charge far higher rates. The increased cost of living, combined with higher costs of running the business day-to-day, is creating a situation where you might have to make difficult decisions like redundancies.’
Oxford Saïd’s Dean, Professor Soumitra Dutta, has called on business schools to do more in supporting SMEs. He said:
‘Every SME deserves to benefit from world class teaching that helps them to grow effectively. They are the entrepreneurial heartland of the business community, not just in the UK but all over the world. The challenge many of them face is not creating a business but growing it. Yet they don’t easily fit the global business school formula, and I don’t think business schools have focused enough on them. Now, more than ever, I would like to see us, and other business schools, increase focus in this area. Our work with the Goldman Sachs Foundation is impactful and we are grateful for their collaboration. Given the right support at the right time, SMEs are a powerful force for job creation and improved productivity.’
Charlotte Keenan, Head of the Office of Corporate Engagement International at Goldman Sachs, said:
‘Small businesses are not only at the heart of communities across the UK but are also the engines of our economic growth. In the current climate, even the highest performing small businesses are feeling the impact, but as always, they see the opportunity in adversity. It is vital SME’s across the country are equipped with the skills and networks they need to succeed.’
The support offered through 10KSB comes at a critical time for small businesses. Nearly half of the programmes’ alumni surveyed (45%) said their UK businesses have been negatively impacted by the recent volatility of the pound compared with other global currencies. Another 45% said they have already been negatively impacted by rises in interest rates.
Speaking about Oxford Saïd’s ongoing offer to SMEs, Dr Pegram Harrison, Senior Fellow in Entrepreneurship and co-Academic Director of the 10KSB Programme, said:
‘Our highly practical, targeted business education programme is focused on UK small business owners with the ambition and potential to grow and create jobs. Participants battle the relentless challenges of accessing finance, managing spiking costs and retaining skilled people. We create learning opportunities for them to work together on expanding critical business skills, and to develop a detailed business growth plan collaborating closely with their own growth coach. After the programme, participants join a growing alumni community of 2,200 entrepreneurs with access to an offering of continuous learning opportunities.
‘Most participants achieve growth even in challenging market conditions. Successes of the programme include striking deals with high street retailers, upscaling from one site to three and reducing order processing from 29 minutes to two. The biggest challenge cited currently is economic uncertainty. However, the support and transformative learning available through the programme mean 65% of our businesses believe they will make a profit this year and 62% believe they can grow their business further in 2023.’
The results from the survey coincide with Global Entrepreneurship Week.