Three weeks ago I wrote a blog, inspired by a claim by a select committee in the House of Commons that it wanted to meet with Small and Medium Enterprises. The challenge with SMEs is they represent businesses referred to as micro enterprises that employ less than 10 people and turnover less than £2m, through to businesses referred to as medium sized enterprises that employ between 50 and 250 people and turnover up to £50m. In between these two groups are small businesses. As I wrote at the beginning of June, there is a huge difference between all three groups and in one sense to classify them together is itself very unhelpful for both the businesses and the people who claim to want to understand them. A few years ago when the Tories were running the coalition government, they promised to increase the level of SME procurement up to 25% and then they upped that promise to 33%. The majority of SMEs by a huge margin are small and micro enterprises, yet the Government is turning to medium size businesses for most of its SME purchasing requirements even though the small and micro enterprises are in a much better position to raise employment and improve productivity in the UK.
A couple of days ago I spotted that the same select committee, known as the Business, Energy and Industrial Strategy Committee (BEIS) claimed it “wanted to hear from SMEs, the Federation of Small Businesses (FSB) and others agencies on scale-up and the effectiveness of Government initiatives to improve the productivity of small businesses”. The reality is that like any group that advocates for a particular community, the FSB is only partially able to speak up for SMEs. The company I work for has been a small business for the last four years and we were a micro enterprise prior to that. Along with the Managing Director I am involved with most of the external connections that we participate in and in the 9 years I have been involved with the company we have never once had any meaningful discussions with the FSB and our involvement with other collective agencies outside of our local Chamber of Commerce is relatively modest. Yet we are judged by many to be a great deal more engaged than many businesses of our size and punch a bit above our weight when it comes to such activity. If we have not had any contact with the FSB, one wonders how much they truly understand about micro enterprises and the smaller, small businesses? So whilst they are an important body for the BEIS committee to listen to, it is vital that the committee also listens to some businesses.
It was for this reason that I last wrote about this issue, because the committee on 5th June were listening to 9 people. One ran a small business, five provided training for SMEs and three were groups that locally or nationally represent SMEs in one form or another (including the FSB). The meeting last Tuesday which as stated above was an attempt by BEIS to listen to SMEs and the FSB was a meeting with 8 people. One was a representative of the FSB, five were from bodies that claim their role is to help scale up FSBs and on this occasion, two people at the meeting run businesses that fall within the SME classification. One is a small or micro enterprise and the other is a medium size business. This means the proportion of SMEs in attendance has more than doubled since the last meeting from 11% to 25%. However there is a still a long way to go so let us hope MPs like Peter Kyle (Hove) and Rachel Reeves, the Chair of the Committee will focus on how to persuade their colleagues to listen to a wider range of small and micro enterprises and then consider if demanding they come into Westminster to be heard is the best mechanism for businesses that spend a great deal of time working in their locations, trying to increase their turnover and workforce as well as their profit.