A number of new business support models are available to small businesses, providing a one-stop shop of support and facilitating their growth, according to a new study by ACCA (Association of Chartered Certified Accountants).
Traditionally, government initiatives and high street advice outlets provided a business support infrastructure for SMEs. ACCA’s new report Space to Grow examines how new and emerging business support models are being used to allow more SMEs (small medium-sized enterprises) to achieve rapid growth, but also to support business recovery post Covid-19. The report is based on a number of case studies from around the world and provides practical insight to SMEs and accountants looking to interact with these support models.
Accountants and small and medium-sized accountancy practices have an important role within this space. Start-ups and growth businesses need sound financial management and data as they start and grow their businesses. Accountants and small and medium-sized practices (SMPs) can provide much more than mere compliance – they can become growth partners, and grow alongside their clients.
Some of the innovative mechanisms supporting scale-ups include:
- Incubators: supporting business creation and development. They are typically physical spaces, which provide additional services such as training and mentoring for entrepreneurs, access to networks, and sometimes specialist equipment or facilities such as laboratories. They can be non-profit institutions set up by Universities, Governments, agencies or donors, or commercial enterprises set up by private sector companies and investor groups.
- Accelerators: focused on growth and often including assistance in developing the business plan, investor pitch deck, prototypes, and initial market testing. In contrast to incubators, accelerators more often base their business model on equity from the start-ups. Historically, accelerators have been highly focused on funding, although elements such as networking, mentoring and market access are increasingly seen as equally important.
Lloyd Powell, Head of ACCA Cymru Wales, said: “Success of scale-ups depends increasingly on new business models of support. This is particularly important in the post Covid-19 recovery of small businesses.
“Covid-19 has put extreme pressure on smaller businesses, many of which have closed their doors as a result. Others have experienced extremely rapid growth.
“SMPs have a crucial role to play in the future provision of small business support and should explore new opportunities to work more closely with the developers of accelerator and incubator programmes. Accountants provide clients with the solid financials and forecast needed to enter incubation and acceleration programmes and pitch to investors.
“This challenging period has also highlighted the need to develop and strengthen partnerships with other stakeholders (such as technology hubs) of the small business support ecosystem. Covid-19 has also reconfirmed the importance of the SMP and we have seen an unprecedented mobilisation of the SMP community: practitioners have been working individually and collectively to keep thousands of small businesses afloat.”
Lloyd continues: “Policymakers focused on supporting growth oriented businesses need to do more to consider the role of finance professionals developing the start-up and small business support ecosystems.”