A study by the Association of Chartered Accountants (ACCA) found that many SMEs are risking their future success by failing to adopt effective processes.

‘The report outlines the governance needs of SMEs, where simple but effective practice over vision, strategy and human capital can provide them with greater flexibility, adaptability and resilience as they grow – a huge factor in the long-term sustainability of the business,’ say the authors.

The research also found that half (49%) of SMEs do not involve external advisers in their strategy discussions.

Among those companies surveyed that do seek outside opinions, the benefits of doing so include: additional experience and knowledge of the industry/sector (46%); an independent perspective / constructive criticism (44%) and advice on their growth strategy (39%).

‘If you incorporate good practice for running your business from an early stage, your company is more likely to be resilient and is more likely to appeal to external investment,’ said Jo Iwasaki, head of corporate governance at ACCA.

‘There are a lot of daily concerns for the leaders of a small business, and often the biggest challenge is meeting day-to-day operations and cash management needs while thinking about the long-term future of the company. And while many leaders are keenly aware of the importance of resilience in the rapidly changing business environment and of buy-in from stakeholders, for example funders and employees, there often may not be the time to think or do much about it,” added Iwasaki.

‘I hope that this research helps SMEs in focusing on some of the most crucial issues, and can be a resource not just to SMEs themselves but also to policymakers.’

How Vision and Strategy Helps Small Business Succeed is here.

Report by Rob Munro