Small businesses need consultants too
It’s easy to visualise the consultancy needs of larger corporate concerns.
Those vast offices, large headcounts and multi-million turnovers, seem to be naturally associated with the idea of “consultancy”. As a result, few consultants need to be made aware of the opportunities that might (but only might) be available in that market segment.
That familiar imagery though can lead to a dangerously constrained marketing focus on major corporate accounts. That’s often at the expense of the SME sector.
SMEs and viability
Yes, don’t blink – you read that correctly. SMEs need and use consultants.
Let’s examine some perhaps surprising facts:
- 99.3% of all UK private sector businesses are small or medium-sized (2018 figures).
- Around 16.3 million people work in SMEs – that’s roughly 60% of all private sector employment;
- Staggeringly, the total annual turnover of SMEs is £2.0 trillion, which is 52% of the total economic private sector turnover in the UK.
(source: Federation Small Businesses)
The first key learning from this is clear – we must discard any notions that the SME sector is somehow “too small to bother with”.
Do SMEs use consultancy?
True, the impressive figures above do not, in themselves, prove that SMEs are a fertile ground for consultants. However, the government has conducted studies (2017) showing that not only do SMEs need consultants but they are enthusiastic existing users of consultancy services from people with specialist skill sets.
Here are some key highlights of their findings:
- almost a third of all SMEs had sought external advice during 2017;
- the subjects they needed help on included business growth, financial advice and improving operating efficiency;
- around 20% of the above SMEs, looked for help in these subjects via email, telephone or website-based contact.
Why SMEs seek advice?
It’s sometimes assumed that SMEs don’t require strategic and special expertise advice because their business affairs are somehow “too simple” to justify it.
That is a myth and we must guard against the dangers of assuming that modest turnover inevitably equates to simple business models.
To understand why, let’s consider the entirely hypothetical case of a garden furniture making business employing 4 people and exporting 50% of their product to various EU countries. Yes, a small operation but in reality, they will have:
- worries over how they should position themselves for Brexit;
- concerns about protecting themselves from excessive Sterling/Euro exchange rate fluctuations;
- the need to understand the optimal and most cost-efficient methods for sending and receiving money to/from overseas suppliers/clients;
- requirements to correctly account for VAT on material imported from and stock exported to outside of the UK;
- banking facilities and funding requirements that need to be managed to ensure they’re on the best terms possible;
- etc.
Many of these issues and concerns would also be found in major corporate entities. The difference between the two is that very large companies may employ their own specialists to deal with these challenges but typically, SMEs can’t – they’ll turn to consultants instead.
Conclusions for consultants
I have seen many consultants trying, and all too often failing, to break into the exceptionally competitive major corporates arena. At the same time, they’ve largely ignored or been entirely unaware of, the available opportunities in the SME sector.
I can’t stress strongly enough though just how productive the SME sector can be for specialist consultants.
It is true that your marketing approach needs to be different for SMEs. The engagement models they’re looking for and their evaluation criteria, are significantly different from those you might be applying in the bigger enterprises’ environment.
The good news is that unlike major corporate clients, SME engagement models don’t necessarily demand that you maintain an extensive (and for you, expensive) on-site presence. SME’s are typically very receptive to services offered through things such as:
- web conferencing;
- phone consultancy;
- remote working
- data sheets;
- template documents;
- etc.
These are all very cost-effective delivery mechanisms through which consultants can share their expertise with SME clients.
That channel expertise is where we can help.
How we can help
Anthony Martin Consultancy is a procurement and bid advisory consultancy. We provide tactical and strategic commercial expertise to help you win more business and cut your supplier costs.
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