ACCA's most recent technical paper entitled Living up to Expectations has identified three fairly distinct and coherent groupings as emerging from an effort to benchmark the experiences of businesses smaller than those of the Economist Intelligence Unit (EIU) panel against larger SMEs, and to contribute to a better understanding of how accountants are supporting small businesses through the recovery.
Strategists
More numerous than any other grouping (39% of respondents to ACCA's Global Economic Conditions Survey Q4 2009), the Strategists believe that small business owners need to take a moment as economic conditions improve in 2010 to look at the big picture and make robust plans for the future. More than other members, they tend to advise small businesses to seek out opportunities as markets begin to recover, to invest and to explore new or niche markets.
Competitives
Competitives believe that the downturn offers a rare opportunity for smart businesses to build a strong competitive advantage. They advise on competitive pricing, achieved by cutting costs or building more efficient operations, as well as on maintaining or improving quality and customer service. More than a quarter (26%) of the respondents to ACCA's Global Economic Conditions Survey Q4 2009 were classified as competitives.
Defensives
Defensives typically advise small businesses to be extremely cautious: to prepare psychologically for tough years ahead and to focus on survival. In particular, Defensives are preoccupied with maintaining strong cash flows, improving financial controls and reducing reliance on other organisations, including lenders. This group was also noted as being more likely than any other to direct small businesses to government assistance programmes. Just over one-third (36%) were classified as Defensives, including a substantial part of the sample in western Europe (44%) where they are substantially over represented.
The findings of this study suggest that the advice of professional accountants has rarely been more valuable. At the global level, the consensus view appears to be that survival can no longer be the sole preoccupation of small businesses.
For some, time and resources will now allow a brief period of reflection and planning that could yield benefits in the future. Others must wade straight into the recovery in search of competitive advantage. However, in those regions where the recovery is weakest, large numbers of finance professionals are still advising businesses to prepare for the worst.
Small businesses appear to have outperformed larger organisations against most of the key indices monitored by ACCA, despite facing disproportionate cash flow pressures and benefiting less from government intervention. In particular, their refusal to engage in indiscriminate cost cutting is serving them and the global economy reasonably well.
Strategists
More numerous than any other grouping (39% of respondents to ACCA's Global Economic Conditions Survey Q4 2009), the Strategists believe that small business owners need to take a moment as economic conditions improve in 2010 to look at the big picture and make robust plans for the future. More than other members, they tend to advise small businesses to seek out opportunities as markets begin to recover, to invest and to explore new or niche markets.
Competitives
Competitives believe that the downturn offers a rare opportunity for smart businesses to build a strong competitive advantage. They advise on competitive pricing, achieved by cutting costs or building more efficient operations, as well as on maintaining or improving quality and customer service. More than a quarter (26%) of the respondents to ACCA's Global Economic Conditions Survey Q4 2009 were classified as competitives.
Defensives
Defensives typically advise small businesses to be extremely cautious: to prepare psychologically for tough years ahead and to focus on survival. In particular, Defensives are preoccupied with maintaining strong cash flows, improving financial controls and reducing reliance on other organisations, including lenders. This group was also noted as being more likely than any other to direct small businesses to government assistance programmes. Just over one-third (36%) were classified as Defensives, including a substantial part of the sample in western Europe (44%) where they are substantially over represented.
The findings of this study suggest that the advice of professional accountants has rarely been more valuable. At the global level, the consensus view appears to be that survival can no longer be the sole preoccupation of small businesses.
For some, time and resources will now allow a brief period of reflection and planning that could yield benefits in the future. Others must wade straight into the recovery in search of competitive advantage. However, in those regions where the recovery is weakest, large numbers of finance professionals are still advising businesses to prepare for the worst.
Small businesses appear to have outperformed larger organisations against most of the key indices monitored by ACCA, despite facing disproportionate cash flow pressures and benefiting less from government intervention. In particular, their refusal to engage in indiscriminate cost cutting is serving them and the global economy reasonably well.
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