Six Rules for Healthy Profits
Latest press releasesREVEALED: A 'BLUEPRINT' FOR SMALL BUSINESS SUCCESS WORTH £15 BILLION TO THE UK ECONOMY
Nearly half of the UK's small and medium sized businesses are just one step away from accelerating their profitability potential and generating £15billion[1] for the UK economy, a unique study of the key ingredients to business success revealed today.
The study by Warwick Business School, commissioned by Royal Mail, reveals that 43 per cent of small and medium sized businesses currently adopting the "blueprint for success" criteria have benefited from sales growth of 17 per cent between 2006 and 2009.
But 44 per cent are just one step away from achieving their potential and safeguarding their business by increasing their turnover growth by 34 per cent over three years to match that of companies that currently follow the blueprint.
For the first time, a team of researchers has compared growth rates amongst 500 small and medium sized businesses and their competitors.
They identified six key factors that set firms apart, including human resources planning, research and development and growth ambition.
Adopting any three of the six factors - as 43% of UK firms do currently - enables firms to outperform their competitors and the industry average in terms of growth and profitability.
The findings also indicate: Small businesses in the North West have the highest take up of the blueprint, with 56% of them implementing three of the six characteristics The South West region has the most potential to benefit from increased update of the blueprint, with only 28% of businesses in the area adopting it currently Those in business services, such as financial services companies, are most likely to adopt the blueprint, with 56% take-up amongst businesses in the sector The construction industry - one of the most badly hit sectors in the recession - is least likely (15%) to be adopting the blueprint with only 27% of businesses in the sector adhering to it
The six key factors vary in the probability that they will support above average performance (indicated in brackets). They are: Flexibility (45%) - adopting flexible and responsive managerial approaches will enable firms to meet and surpass customer expectations Business process efficiency (41%) - making active attempts to evaluate and optimise internal processes enables businesses to reduce costs and improve efficiency Marketing (38%) - using a variety of marketing methods, such as mailshots and the internet, enables firms to more effectively make potential customers aware of products and services. Human resources planning (35%) - developing a plan for staff development and future employment increases a business's flexibility and responsiveness and aids its growth aspirations Growth ambition (34%) - having a growth objective or ambition shapes a business's strategy and its willingness to invest in development Research & development (32%) - a thorough understanding of the markets in which it works, and the best ways of delivering services, enables a business to compete more effectively
For example, adopting a flexible managerial approach, such as effective delegation of decisions, makes it 45% more likely that a small business will achieve above average growth.
Stephen Roper, Professor of Enterprise at Warwick Business School said: "The blueprint highlights the range of strategic capabilities in smaller firms and the potential for real growth amongst the UK's SMEs. As the economy moves out of the recession and into a period of growth, new opportunities will emerge for many firms. Adopting the blueprint will help these firms to make the most of these new opportunities and maximise their growth and profit potential."
John Taylerson, Director at Malmesbury Syrups, an artisan syrup producer in the South West of England believes his business is better positioned for any future economic turbulence as a result of adopting the blueprint principles:
"As a small business coming out of the recession, we are constantly looking to improve our performance and to grow our customer base.
"To do this, we've invested heavily in our workforce, marketing and research and are constantly reviewing the way we operate so we can be as nimble as possible in this current challenging economic climate."
He added: "Doing things like this may seem obvious but when you're counting every sale these investments can sometimes be difficult however I believe by doing so, I am safeguarding my businesses' future."
Tim Rivett, Head of Small Business, Royal Mail said: "These findings will help smaller firms to identify where they can improve their business and achieve growth. The characteristics are practical and easily applicable for the majority of businesses and should - along with advice and support from partners such as Royal Mail - help small businesses on their way to achieving the Blueprint for Success."
Nearly half of the UK's small and medium sized businesses are just one step away from accelerating their profitability potential and generating £15billion[1] for the UK economy, a unique study of the key ingredients to business success revealed today.
The study by Warwick Business School, commissioned by Royal Mail, reveals that 43 per cent of small and medium sized businesses currently adopting the "blueprint for success" criteria have benefited from sales growth of 17 per cent between 2006 and 2009.
But 44 per cent are just one step away from achieving their potential and safeguarding their business by increasing their turnover growth by 34 per cent over three years to match that of companies that currently follow the blueprint.
For the first time, a team of researchers has compared growth rates amongst 500 small and medium sized businesses and their competitors.
They identified six key factors that set firms apart, including human resources planning, research and development and growth ambition.
Adopting any three of the six factors - as 43% of UK firms do currently - enables firms to outperform their competitors and the industry average in terms of growth and profitability.
The findings also indicate:
The six key factors vary in the probability that they will support above average performance (indicated in brackets). They are:
For example, adopting a flexible managerial approach, such as effective delegation of decisions, makes it 45% more likely that a small business will achieve above average growth.
Stephen Roper, Professor of Enterprise at Warwick Business School said: "The blueprint highlights the range of strategic capabilities in smaller firms and the potential for real growth amongst the UK's SMEs. As the economy moves out of the recession and into a period of growth, new opportunities will emerge for many firms. Adopting the blueprint will help these firms to make the most of these new opportunities and maximise their growth and profit potential."
John Taylerson, Director at Malmesbury Syrups, an artisan syrup producer in the South West of England believes his business is better positioned for any future economic turbulence as a result of adopting the blueprint principles:
"As a small business coming out of the recession, we are constantly looking to improve our performance and to grow our customer base.
"To do this, we've invested heavily in our workforce, marketing and research and are constantly reviewing the way we operate so we can be as nimble as possible in this current challenging economic climate."
He added: "Doing things like this may seem obvious but when you're counting every sale these investments can sometimes be difficult however I believe by doing so, I am safeguarding my businesses' future."
Tim Rivett, Head of Small Business, Royal Mail said: "These findings will help smaller firms to identify where they can improve their business and achieve growth. The characteristics are practical and easily applicable for the majority of businesses and should - along with advice and support from partners such as Royal Mail - help small businesses on their way to achieving the Blueprint for Success."
See more:
http://www.royalmail.com/portal/rm/content1?catId=66500710&mediaId=121900769
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