New research from Direct Line for Business reveals more than half (55 per cent) of SMEs have hired an IT or web expert to assist with their business, making these professionals the second most popular external adviser to be hired by small businesses.
IT and web experts are second only to accountants (66 per cent) in need of external help by SMEs. Lawyers (52 per cent), designers (43 per cent) and HR experts (42 per cent) make up the top five. The least common professionals employed are project managers (38 per cent) and management consultants (39 per cent).
However, many organisations may be waiting too long before calling in experts to help their business. A quarter (24 per cent) of all SMEs have left it until they hit a crisis before hiring a professional adviser to help them, either because they were already experiencing issues (11 per cent), were in the midst of a crisis that could not be remedied internally (nine per cent) or because the business was actually losing money (seven per cent).
No external help
Over a fifth (22 per cent) of SMEs have not hired any professional adviser to help their business, whether that be a lawyer, accountant or IT expert. The main reason for not hiring advisers is cost, cited by two fifths (40 per cent) of SMEs, although for others it is because they learnt how to do that particular skill themselves (36 per cent) or because they believed they had enough skills and knowledge to not require any external guidance (35 per cent).
Of those who have brought in external help, just a quarter (25 per cent) did so before commencing trading. The average time taken to seek advice for a SME is one year and six months, although it varies depending on type of adviser. SMEs wait around one year, eight months to hire a management consultant but just one year five months to hire a lawyer, accountant or IT expert.
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“Jack of all trades”?
Karneet Chowdhury, Business Manager Office and Professionals, Direct Line for Business, said: “SMEs are often expected to be a ‘jack of all trades’ but it’s very difficult for a small or micro business to have enough knowledge and experience of law, accountancy, IT and/or HR to be able to manage these aspects of their business themselves. While cost control is vital for SMEs, sometimes the DIY approach may be a false economy and in fact cause more problems. Business owners should work out what they can realistically do themselves and what they need expert help with and budget accordingly. Fines for non-compliance with regulation or law could be substantially higher than the cost of an adviser.”
Those SMEs who have not hired experts may wish to do so as the overwhelming majority (95 per cent) of those who have said doing so had had a positive impact on their business. External professional advisers have helped SMEs increase revenue (65 per cent), improve business infrastructure (66 per cent) and look more professional to their customers and peers (74 per cent).
Increased specialist consultancy roles
The number of consultancy related roles has risen rapidly over the past decade, usually reflecting the above average salary increases. Separate analysis2 reveals that around one in 11 (nine per cent) people are currently employed in a specialist consultancy-related profession, which accounts for around two million workers. This is a significant 83 per cent increase since 2009, when there were around 1.1 million in the industry, accounting for just six per cent of workers.
The sales and marketing industry in particular has experienced a meteoric rise, with nearly 550,000 more professionals working in this space since 2009 and a 34 per cent increase in median salary over the decade. Other sectors which have seen a rise in median salary since 2009 are media-based professionals (up 17 per cent), IT and telecommunications-based professionals (up 13 per cent), design-based consultants and legal professionals (both up eight per cent).
The right advice from the right source
Emma Jones, founder Enterprise Nation said: “We have seen for ourselves that businesses who access advice often grow faster than firms that don’t, and from talking to business owners we know it can often be a result of not knowing which advisers to trust and how much to pay for the advice. Our suggestion would be to use business forums to get recommendations or find a support group like Enterprise Nation who can open up a network of trusted advisers.”
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Sector insight
SMEs working in financial services are most likely to call in expert help, no doubt due to the strict rules and regulations faced by financial firms. The greatest proportion of financial services SMEs use lawyers, accountants, management consultants, HR experts, project managers and designers to help their business of any sector. Engineering SMEs, however, are most likely to employ marketing and PR consultants of any industry.
SMEs cite the main benefit of using advisers as ensuring compliance with regulations. SMEs working in the engineering, healthcare, IT and web design and retail and wholesale industries all listed complying with regulations as the key benefit to their business of bringing in expert help. Financial services businesses also listed this as a key benefit but equal in importance to improving the infrastructure of their business and making the business look more professional. Business management firms ranked compliance as equal in importance to expanding the company’s reach, while building and property businesses ranked the top benefit for external help as making the business look more professional.
Appropriately insured help
Karneet Chowdhury added: “Clearly bringing in expert advice at the correct time makes economic sense and instils good practice within an organisation. It is vital that companies ensure that their expert help is appropriately insured for their line of work.”
https://www.directlineforbusiness.co.uk/small-business-insurance
