A new initiative by the government’s Small Business Service may give the UK’s SMEs the chance of survival they so desperately need.
Small businesses, which make up 55% of the country’s GDP and account for half of its jobs, are bearing the brunt of the economic slowdown, according to figures released last week by Dun & Bradstreet.
The figures show that 18,191 small businesses have failed this year, up 3.5% from last year, while large business failures have decreased by 6.6%.
Business Link, the new initiative, will run as a pilot scheme in a number of locations including Manchester, Newcastle and the East of England.
An SBS spokeswoman said the scheme would have two stages. First, the company would come in to Business Link and be asked questions about its state of affairs, such as how much money it owed, who the money is owed to and what the company plans to do about it.
She added: ‘If it is found that you are having difficulties through no fault of your own, the service will send a business adviser. This first part of the service is going to be free.’
After a full day’s review, where the adviser reviews the problems, they will provide a report on what can be done to save the company. Then the business has a choice whether to heed the advice and continue with the service or not.
‘If you want to take the advice further it will cost you money,’ said the spokeswoman. ‘I can’t say how much because it depends on what’s wrong with the business and what needs to be done.’
The advisers, or company doctors, are people who are already working for the Business Link, so the service hasn’t had to take on any new people.
‘We’re doing the pilot project to assess the ways we can help small businesses. If after a year it proves successful we will roll the scheme out nationally,’ the spokeswoman concluded.
John Harris, chief executive of the Society of Turnaround Professionals, which recently had its first annual general meeting, applauded the initiative.
He said: ‘They are tackling the small business sector, which is a difficult one to supply to, whereas the initial focus of STP is those who deal with medium and large companies.’
According to Harris, the small businesses sector can’t afford to pay for what it needs, as it requires a lot of work, and small businesses sink faster than larger ones.
More on Business Link at www.sbs.gov.uk.