Think small first

accawebmaster —  14 January 2011 — Leave a comment

By Stefan Töpfer, CEO of WinWeb.com

To bring you a different perspective on some of the SME issues that get mentioned on this blog, we thought we'd bring you some guest posts from small business expert Stefan Töpfer. This is his first post.

When you listen to governments, or some large consulting firms, you could be excused for believing that any home, micro or small business is insignificant to our economy and therefore does not deserve consideration.

The facts that SMEs account for 50%+ of the UK's GDP, over 50% of employment and a staggering 60% of innovation makes the 'insignificant' claim a difficult argument to follow. So why are governments so condescending towards small businesses?

Let's look at the history of government involvement with SMEs. Governments have had a multitude of programmes and initiatives in place over past decades to stimulate growth among the SME businesses. It has been a declared policy by many in government to get more SMEs to grow.

In the past few years, the government conducted a survey that found that 73% of SMEs did not want to grow – so all of the government policy that was in place was geared towards only 27% of the SME market.

As we all know by now, this policy failed and has now culminated in the closure of all BusinessLink offices around the UK – a powerful demonstration of government inability to understand small business. The last Labour government embarked on involving celebrity entrepreneurs. Following some of the comments made by these celebs, you could often be excused for thinking that you only need a very capable management team to succeed in business – some of them even denied that we are in a recession.

Accountants, the most important group of SME advisers, have effectively been removed from the small business frontline by an unparalleled flood of new tax code provisions over the last decade. This is a massive blow to SMEs, with tax advisers no longer having the time to devote to their small business owner clients.

All this demonstrates, quite clearly, that most in government are completely ignorant about the needs for small business, under-pinned by the fact that the five-year mortality rate among SMEs has not changed over the past two decades or more and remains at almost 60% – a damning reminder of failed government policy.

In my opinion – and for now – it would be best for government just to get out of the way of SMEs, and lower the bureaucratic burden on small business and its advisers.

Disclaimer: The author Stefan Töpfer is CEO of WinWeb.com, a leading cloud-based small business infrastructure provider (small business software, e-commerce solutions and business process outsourcing). The views and opinions expressed are his and are based on over three decades of personal experience as a serial entrepreneur #1 small business blogger, mentor and angel investor in the SME/SMB sector.

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