Warning sounded by SMEs over funding withdrawal for business advice

PA 328/11

A network of volunteer mentors offering free business advice is unlikely to prevent support for new enterprises from going into freefall, a survey of SMEs and advisors has discovered.

The Government is hoping that its Big Society-style scheme — mentorsme.co.uk — which involves seasoned business pros passing on the benefit of their experience to both new start-ups and established companies, will fill the gap left when public funding for the Business Link network of advisors is withdrawn next month.

However, the UK Business Barometer (UKBB) survey, run quarterly by The University of Nottingham Institute for Enterprise and Innovation (UNIEI) has uncovered scepticism around the prospects of the new scheme and concerns for the future of enterprise support more generally.

An overwhelming majority — three quarters of respondents — told the survey they would be unlikely to call on the new scheme, with just one-third saying they would consider giving up their time to volunteer as a mentor.

One entrepreneur quizzed said: “I have always believed that business advisers/mentors should have run successful businesses themselves, so I generally support the mentoring scheme. However, the Government is setting great store by the use of mentors and I’m not clear how they propose to ensure the quality and reliability of provision.”

In addition, the fears expressed earlier this year by George Derbyshire, the outgoing head of the National Federation of Enterprise Agencies, about the future of business advice for SMEs seemed to strike a chord with many respondents to its sister survey, the UK Business Adviser Barometer (UKBAB). More than half (53 per cent) agreed with his assessment that enterprise support will “fall off a cliff” when state support for the Business Link network ends at the end of November.

Somewhat unsurprisingly, business advisers agreed almost unanimously (92 per cent) that face-to-face advice was too important to forego at a time when the reforms would see much of the support offered online.

The UK Business Barometer (UKBB) and the UK Business Adviser Barometer (UKBAB) provide a snapshot of how small and medium-sized businesses are coping with the current state of the economy and aim to uncover the key issues affecting the small business market. Operating over the web means that results can be rapidly generated and the surveys have unique software that enables results to be processed and posted on their respective websites immediately they arrive.

The latest UKBB survey also posed questions to SMEs on their projected staffing levels over the next six months, whether the use of techniques employed in elite sports, such as target setting and statistical analysis, can be applied to the management of a team running a small business and whether they expect their business to expand or decline over the coming months.

The business advisers were quizzed by the UKBAB on whether they would like to see more competition being brought into the banking sector following the recently published interim report on banking reform by Sir John Vickers, Chairman of the Independent Commission on Banking. They were also asked for their views on the prospects for small business in the coming year and to what extent they had seen an increase in collaboration between businesses in the same industry among their clients in the previous six months.