Academic journal article Manager

Find out How to 'Close the Gap'

Academic journal article Manager

Find out How to 'Close the Gap'

Article excerpt

The Small Business Service's recently launched Benchmark Index report, 'Closing the Gap' enables SMEs to make performance comparisons for over 60 key business measures in financial, management and business excellence areas. The Closing the Gap report involved an assessment of over 2,000 SMEs.

David Irwin, Chief Executive, Small Business Service, (SBS) said: "The benchmarking process will help small businesses understand how they can achieve higher levels of performance. It is dear that companies are performing well over a broad range of measures, but cash-flow remains a key problem for small companies.

The Service is committed to ensuring small businesses have improved access to equity finance with an ambitious target of generating L100 billion of investment for small firms nationwide by 2004. L100 million has already been appointed to the SBS in the March 2000 Budget to help plug the equity gap'."

The SBS came into being in April this year, with the aim of providing a voice for small businesses at the heart of Government, to achieve enterprise across all society and provide a world-class business support system.

Further findings in `Closing the Gap' include:

* The bottom quarter of companies are achieving profit levels that are one tenth those achieved by the top 25%.

* Supplier performance is poor. Lower quartile companies clearly do not have control over their suppliers as up to 75% (by value) of the supplies they receive are delivered late.

* Overhead management is a key issue. The bottom 25% of companies require three times as much overhead- as much as the top 25 %. They have three times the number of indirect employees and require twice as many managers per employee.

* Many companies invest more in marketing - claiming they have specific capabilities - than they do in actually building those capabilities. For every L100 spent on marketing, L60 is spent on R&D and only L30 on training. …

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