Listen up folks, it’s the news we’ve all been waiting for! Britain could be set to experience a long-overdue business boom as the unemployment rate plummets and economic revival skyrockets. New studies have shown that confidence is high amongst small businesses and growth is on the horizon but could it all come to a bitter end if the management skills gap isn’t addressed? Experts think so.
In his 2015 Budget Speech, Chancellor George Osborne boasted that “the pace of net job creation under this government has been three times faster than in any other recovery on record”. He also recently cooed that unemployment has hit its lowest since 1975, with the UK now holding a higher employment rate than the US for the first time in nearly four decades.
There’s also great news for SME owners as the Hitachi Capital quarterly British Business Barometer reports 43% of small companies are planning to grow over the next three months. This figure demonstrates a 9% increase on the statistics reported six months previously.
UK SMEs were championed as the new Enterprise Bill was announced during the Queen’s Speech. The bill has been put in place after acknowledgement of the prominent role small businesses are playing in the country’s rapid economic recovery. Confidence is flying particularly high in the construction, transport, distribution and manufacturing sectors.
Hitachi Capital Finance general manager, Gavin Wraith-Carter claims that eventually, “the focus will shift more towards business investment as a means of achieving long-term growth”. However, research taken out by Lancaster University and Warwick Business School has suggested there is serious work to be done to bridge the management skills gap before any of these ambitious goals can be reached.
It seems that it’s a case of three steps forward two steps back, or should we say 2 per cent back, as output per hour worked remains 2% below its pre-crisis level according to numbers released by the Office of National Statistics. It is a distinct lack of management skills, entrepreneurship and leadership abilities that is being blamed for this lacklustre productivity and business owners are being urged to do something about it.
Director at Lancaster University’s Work Foundation, said:
“If productivity can rise at a steady state once more, the budgetary plans look as though they can be achieved. But if it cannot, meeting deficit targets will be an impossibility.”
Professor James Hayton from Warwick Business School is amongst those who have identified a “long tail” of SMEs not employing good management practice. He outlines a direct correlation between an entrepreneurial skillset and three measures of performance (turnover, productivity and employment growth) and currently sees this connection as destructive.
“An important practical takeaway from this research is owner-managers should understand the fundamental benefits of a formal approach to strategic planning, communication, and adaptation, as well as being able to connect HRM practices to the strategic planning process.”
He also said:
“Given limited resources, especially time, SME owner-managers may benefit most significantly from ensuring that their entrepreneurship skills and leadership skills are well polished.”
We recently identified a difference between the roles of leadership and management, which you can read more about here but when it comes to small businesses, it’s often down to one person to play both parts. Here are our quick top tips to improving your entrepreneurial skills and subsequently increasing the productivity of your business and its employees.
- Strategise and prioritise – Thorough planning is key when it comes to business management and when we say thorough, we mean thorough. Go through that stuff with a fine-tooth comb if you have to then prioritise your plan of action. Harvard Business recommends ticking three tasks off your to-do list before noon if you can and tackling the biggest ones first. Everybody needs to be singing off the same hymn sheet and it’s down to you to conduct the running order.
- Communicate – We’ve said it before but we’ll say it again, communication is absolutely vital when it comes to building a team that will be efficient and productive. Communicate your expectations clearly and always offer praise and credit where it’s due. There’s nothing like a pat on the back every now and then to get 100% out of your employees.
- Delegate – Assign the right tasks to the right people. You hired them for a reason so capitalise on their strengths to get the best out of your business. You have to ensure that all aspects of the business are running smoothly but also make sure that they are working in harmony and if outsourcing is what it takes, then that’s what you need to do.
- Keep learning – There’s no such thing as the perfect manager; you’re a constant work in progress as your industry evolves and your market place adapts. Attending regular training courses, seminars and conferences may sound like a right drag but it will benefit both you and your employees and in turn, take your business to the next level.
- Break bad habits – Four out of five small business owners admit that they are hampered by their own bad habits. Having a last minute work ethic, not striking a good work-life balance and not keeping accounts up to date are amongst the many habits that are having a negative impact on SMEs across the UK. General Manager at Sage One, which conducted this new research, said:
“Habits can become second nature to us, and once we have them they’re as hard as a nut to crack. But by making an effort to shift them and break routine, businesses can transform the way they work, take greater control and reclaim valuable time to spend on driving their business forward.”
Now it’s up to you to break your nasty little habits but we can definitely help you out when it comes to keeping your accounts up to date and tax efficient. Our cloud bookkeeping software Pandle comes as part of the package and has been simplified and streamlined to take the unnecessary stress out of your accounting process.
Click here to get a free instant quote and see how we can start saving you time and money so you can concentrate on increasing your productivity.