Despite by startup companies since they bring in

Despite support from government both
financial and legal SMEs less than half of startups can survive for more than
five years and only a fraction of the SMES could be seen to become high growth
firms. The lack of training and development within these firms and high job
turn over highlights the major causes as to why these firms are unable to
succeed beyond a certain time period. Most of the OECD countries extend
effective support programs for the growth and development of Small firms. For
example OECD countries like Japan, Germany, Iceland, New Zealand etc dedicate
almost 50% of their public support programs for the growth and development of
SMEs in their respective regions. In the year 1993 huge investments of around US$3.75
billion was dine in order to help and support startup companies with research
and development techniques, acquisition of necessary equipment etc (Escrivão
Filho, 2017).

Discussion

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Small and medium firms are the backbone of
the UK economy which helps in the growth of new jobs, opening up new markets
and overall helps in driving economic growth of the country. The status quo of
the UK economy is challenged by startup companies since they bring in new ideas
and serve as the seedbeds for innovation in the market and also help open up
new markets in a given economy (Brown, 2017).  Hence small firms should be encouraged to
flourish in the UK economy. Although the SMEs receive support from the
government but almost 50% of the SMEs have doubts regarding the efficient
operations of their businesses. As per the research findings by RSA almost 55%
of small firms fail to survive beyond the time span of five years. In the year
there were estimated to be around 5.2 million businesses in UK of which around
99.9% of the businesses were SMEs. Small firms largely contribute to the gross
domestic products of economies (El Kalak, 2016).  However
despite the economic contribution made by the SMEs in any given economy the
performance level of small firms fall below expectations in many regions. UK is
home to a large number of SMEs that have significantly contributed towards
economic growth and employment generation but more than half of the small firms
do not make it to the status of big firms and are seen to shut down within a
span of 5 years. There are several factors that led to the failure of SMEs in
many regions which include unfavorable economic conditions in different regions
that do not support the growth and sustenance of small firms. Unstable economic
conditions often result from harsh political conditions which in turn do not
allow small firms to grow. Big firms however can bear the harsh political
conditions owing to their expertise and sound economic conditions but it is
difficult for the small firms to survive in these conditions and is often seen
to shut down (El Kalak, 2016).

Another major factor that leads to the failure of small firms in many economies
in gross under capitalization that does not allow small firms to acquire credit
from banks and other financial institutions that is important for running a
business. Some of the other factors that could be associated with failure of
Small firms in different economies are highly dilapidated infrastructure,
comparative high cost of operations and corruption in the political system and
lack of transparency in operations. At times the failure of SMEs could also be
attributed to the lack of support extended by government organizations that do
not support small firms to flourish their business beyond a certain point (Escrivão
Filho, 2017).

In UK the small and medium firms form to
be the largest proportion of the business segment and it has been estimated
that in UK alone SMEs represent around 95% of the entire business segment of
the country which suggests the magnanimous size of the SME sector in the
economy of the country. The small firms in UK contribute towards around 30% of
the GDP of the country and 65% of the labor force in the region. Compared to
developing countries in general UK has better support framework for the growth
and development of SMEs in the region. SMEs in UK have better backing from the
government as compared to developing countries like Nigeria where the failure
rate of SMEs is higher (Brown, 2017).  The 2006 government led by Tony Blair
introduced some very effective policies for the growth and development of SMEs
in the region. Some of the policies are as follows- building of a culture for
the development of enterprises, encouragement of a market that paves the way
for startup organizations, building capability for the growth of small
businesses. The most effective policy that paved the way for the growth of
small businesses in the region is the access to financial support from banks
and other financial institutions. UK being a developed nation has better
potential for the growth and development of SMEs as compared to developing
nations as UK is technologically much advanced.

Several studies regarding the success and
failure of SMEs highlights that factors like disaster and crises, high taxes,
lack of infrastructural adequacy, lack of social support, poor accounting and
book keeping practices and improper planning and lack of financial access leads
to the failure of small firms in any given economy. Many researches in
developed as well as developing nations highlighted that high taxes and lack of
infrastructural support for startup companies lead to failure of SMEs as a lack
of a good infrastructure may not allow start ups to expand their business
beyond a certain extent. Poor accounting and book keeping could also be related
with failure of small firms in developed nations. Researches however show that
in UK internal factors are more responsible for the failure of small firms as
compared to external factors which are responsible for failure of SMEs in
developing countries. Thus it can be said that internal factors like poor
accounting practices and improper planning involved with startups as well as
lack of training and development of employees often lead to the failure of SMEs
in the UK economy.  Hence while Internal
factors are more responsible for the failure of SMEs in UK small firms should
focus on improving goods and services, prove the quality of commitment to their
customers, sharpen the business process, bring in innovation, carry on better
book keeping practices and try to cut costs for driving profitability of their
firms.

With sustainable economic growth in UK
there has been a rise in small and medium size businesses in UK. SMEs are
growing on the country at an alarming rate. Like each and every economy SMEs
form to be the backbone of the UK economy as they contribute to employment and
GDP of the country. The causes of failure of SMEs in UK however have been
discussed in the preceding paragraphs. However most of the causes of failure of
SMEs in UK are seen to be internal rather than external. The government
policies are favorable for the growth and development of SMEs in the country
but lack of proper training and development is the main cause as to why SMEs do
not survive for a longer time. Thus some recommendations to improve the
internal factors leading to failure would be – maintaining a sharp focus on the
market. When small and medium firms are able to maintain a focus on the market
they would be able to adapt to these changes easily. The market is ever
changing which is truly recognized by big firms but is often ignored by small
firms as a result they fail to identify the changes and as a result they
fail.  SMEs should be more concerned
about their position in the market and how appropriate their position in the
market is. This would help them to identify the gaps and mend those gaps to
attain competitive advantage and grow over the years.

Another factor that would lead to the
success of SMEs is the fact that they need to bring in innovation in their
products and services and offer something new to their customers on a regular
basis so that they can attain a loyal base of customers. A financial discipline
is also important for SMEs to adopt, improper financial planning and
inappropriate book keeping and accounts might also lead to losses and closure
of small businesses (Bennett, 2016). Building resilience would also help small firms to
succeed in face of strong competition and external and internal causes of
failure. SMEs should have a prudent attitude when it comes to borrowing from
external resources since a careful planning would help in achieving financial
stability. Financial planning also helps small firms to have safety buffers
during economic crisis and have funding for growth in future. On the other hand
increasing international outlook and expansion of geographical footprint would
also enable SMEs to gain competitive advantage and attain sustainable growth.

When SMEs are able to bring in customers from other markets they are likely to
enhance growth. For example the German SME market is larger and at the same
time more innovative as compared to other markets.

The government of UK has been assisting
the development of SMEs with the help of regional grants for businesses. There
are certain areas which are marked as economically disadvantaged areas and
hence starting a business in these areas help SMES to have special regional
grants from the government (Bennett, 2016).These policies are adopted in order to help small
businesses to get the needed support for growth and development. The UK
government also has grants for research and development for facilitating the
growth of start ups in the hi-tech industries in UK. Tax incentives are also in
place in the country for supporting research and development activities. More
over other initiatives adopted by the government are the growth Vouchers
program which enables small firms in the country to access advice from experts
in the business field that help them to attain expertise thus resulting in
growth and development. Tax relief is also offered for small and medium
businesses in the country to help them grow. Tax relief is often seen in the
form of R &D tax, credits and capital allowances for reducing tax
liabilities of a start up business. Another program launched by the government
of UK is the National business support helpline. Under this program start ups
are given advice before they start up their business. Signposting and
diagnostic support is also extended to businesses under this specific program.

Some of the business support programs undertaken by the government of UK are
Mentors ME that gives access to business mentors from the SME community this
has been an effective effort in boosting the network of local mentors. The
Manufacturing Advisory service has been developed to help guide manufacturing
businesses in the country. This service helps in business planning,
manufacturing process, enhancing innovation and efficiency of manufacturing
businesses etc. The growth Accelerator on the other hand helps in the
development of specific skills necessary for a particular industry. This however
is an important program as the major cause of failure of SMEs in UK has been
identified as lack of industry skills. Another government body that is the UK
trade and Investment provides SMEs with advice on export capacities and
opportunities for a firm. This body also extends support to SMEs regarding
e-commerce, export training and market Research. Financial advice is provided
by British Business Bank which is a new initiative of the government. The
website provides all type of finance related information to start up companies
in how they can avail finance for their business. The advantages and
disadvantages of different types of finances available to SMEs are also
available in this website (Bennett, 2016).

Despite
the initiative undertaken by the government of UK SMEs operating in the country
are of   the view that their revenue will
shrink or will face a standstill in the year 2017 since they feel that the
initiatives adopted by the government is not effective in addressing their
issues.  Hence for improving the current
status of SMEs in the country the government must provide more information on
markets and consumer behavior so that they can build strategies based on these
businesses. Government should be able to provide useful information to SMES so
that they can protect their business from the economic uncertainty if any.  More over investment should be done by the
government for the development of robust infrastructure which would pave the
way for growth and development of SMEs in the country. Companies should also be
provided with better access to finances so that they can have better financial
planning for future enabling them to grow over the years.

Conclusion

Despite
being home to the largest proportion of Small scale business UK has not been
able to cope up with the increasing issues in the market. There are number of factors
that need to be worked upon in order to make a proper environment for SMEs to
operate in the UK business environment. There are challenges that the UK
government has to work upon in order to provide the businesses with environment
that is conducive for business. Irrespective of the size of the organisation it
is important for the entrepreneurs to make effective strategies for proper
operations of the organisation. As discussed in the previous columns there are number
of factors that affect the operations of the SMEs. Internalisation has changed
a lot of things and in business SMEs have gained importance but with the
constant ambivalent attitude of the government it has been tough for the small
scale organisations to operate their business. It could be said that the
economic environment has to be changed for the SMEs to work in the market effectively
(Huggins, Prokop and Thompson, 2017).

The
small scale organisations doesn’t get proper support in terms of finance and
this clearly shows how the organisations need to strategise their business in
order to get the best possible result. It could be concluded that it might
apparently seem the SMEs get proper support from the UK Government and the
other bodies regulating the business environment in the country. The support
that the Small scale companies mainly need is financial support and a proper business
environment that is important for the organisations to flourish. The political environment
in the certain regions has affected the business of the Small scale
organisations (Hanage,
Scott and Davies, 2016).

There
has been lack of planning and strategy for the SMEs to communicate with the
government about the consumers and their behaviors and the demands. It is
important that the small scale companies operating in the UK develop effective
strategies that will help better financial planning which would help the
organisations to strategise their businesses. Apart from that there are certain
smaller issues that the small scale organisations need to manage the business
operations. The IT problems have kept the small scale companies engaged to a
large extent and have also wasted a lot of time in that. The staffing issues
also need to be managed effectively in order to manage the operations
effectively (Escrivão
Filho et al., 2017). The SMEs have faced number of key
issues in the UK business environment and so, it is essential that certain
suggestions are made for the organisations to improve their possibilities of
doing business for a long time. The recommendations are as follows:

·     
The Small scale companies
need to improve their infrastructure for business challenges.

·     
The integration of
artificial intelligence for the use of big data in the business for better and
effective decision making.

·     
Better positioning of
leads and sales force.

·     
Development of
competitive strategy is important for the SMEs.

·     
Better communication with
the government about organisational position and market analysis implementation
for better performance (Bennett, 2016). 

Despite support from government both
financial and legal SMEs less than half of startups can survive for more than
five years and only a fraction of the SMES could be seen to become high growth
firms. The lack of training and development within these firms and high job
turn over highlights the major causes as to why these firms are unable to
succeed beyond a certain time period. Most of the OECD countries extend
effective support programs for the growth and development of Small firms. For
example OECD countries like Japan, Germany, Iceland, New Zealand etc dedicate
almost 50% of their public support programs for the growth and development of
SMEs in their respective regions. In the year 1993 huge investments of around US$3.75
billion was dine in order to help and support startup companies with research
and development techniques, acquisition of necessary equipment etc (Escrivão
Filho, 2017).

Discussion

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For You For Only $13.90/page!


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Small and medium firms are the backbone of
the UK economy which helps in the growth of new jobs, opening up new markets
and overall helps in driving economic growth of the country. The status quo of
the UK economy is challenged by startup companies since they bring in new ideas
and serve as the seedbeds for innovation in the market and also help open up
new markets in a given economy (Brown, 2017).  Hence small firms should be encouraged to
flourish in the UK economy. Although the SMEs receive support from the
government but almost 50% of the SMEs have doubts regarding the efficient
operations of their businesses. As per the research findings by RSA almost 55%
of small firms fail to survive beyond the time span of five years. In the year
there were estimated to be around 5.2 million businesses in UK of which around
99.9% of the businesses were SMEs. Small firms largely contribute to the gross
domestic products of economies (El Kalak, 2016).  However
despite the economic contribution made by the SMEs in any given economy the
performance level of small firms fall below expectations in many regions. UK is
home to a large number of SMEs that have significantly contributed towards
economic growth and employment generation but more than half of the small firms
do not make it to the status of big firms and are seen to shut down within a
span of 5 years. There are several factors that led to the failure of SMEs in
many regions which include unfavorable economic conditions in different regions
that do not support the growth and sustenance of small firms. Unstable economic
conditions often result from harsh political conditions which in turn do not
allow small firms to grow. Big firms however can bear the harsh political
conditions owing to their expertise and sound economic conditions but it is
difficult for the small firms to survive in these conditions and is often seen
to shut down (El Kalak, 2016).

Another major factor that leads to the failure of small firms in many economies
in gross under capitalization that does not allow small firms to acquire credit
from banks and other financial institutions that is important for running a
business. Some of the other factors that could be associated with failure of
Small firms in different economies are highly dilapidated infrastructure,
comparative high cost of operations and corruption in the political system and
lack of transparency in operations. At times the failure of SMEs could also be
attributed to the lack of support extended by government organizations that do
not support small firms to flourish their business beyond a certain point (Escrivão
Filho, 2017).

In UK the small and medium firms form to
be the largest proportion of the business segment and it has been estimated
that in UK alone SMEs represent around 95% of the entire business segment of
the country which suggests the magnanimous size of the SME sector in the
economy of the country. The small firms in UK contribute towards around 30% of
the GDP of the country and 65% of the labor force in the region. Compared to
developing countries in general UK has better support framework for the growth
and development of SMEs in the region. SMEs in UK have better backing from the
government as compared to developing countries like Nigeria where the failure
rate of SMEs is higher (Brown, 2017).  The 2006 government led by Tony Blair
introduced some very effective policies for the growth and development of SMEs
in the region. Some of the policies are as follows- building of a culture for
the development of enterprises, encouragement of a market that paves the way
for startup organizations, building capability for the growth of small
businesses. The most effective policy that paved the way for the growth of
small businesses in the region is the access to financial support from banks
and other financial institutions. UK being a developed nation has better
potential for the growth and development of SMEs as compared to developing
nations as UK is technologically much advanced.

Several studies regarding the success and
failure of SMEs highlights that factors like disaster and crises, high taxes,
lack of infrastructural adequacy, lack of social support, poor accounting and
book keeping practices and improper planning and lack of financial access leads
to the failure of small firms in any given economy. Many researches in
developed as well as developing nations highlighted that high taxes and lack of
infrastructural support for startup companies lead to failure of SMEs as a lack
of a good infrastructure may not allow start ups to expand their business
beyond a certain extent. Poor accounting and book keeping could also be related
with failure of small firms in developed nations. Researches however show that
in UK internal factors are more responsible for the failure of small firms as
compared to external factors which are responsible for failure of SMEs in
developing countries. Thus it can be said that internal factors like poor
accounting practices and improper planning involved with startups as well as
lack of training and development of employees often lead to the failure of SMEs
in the UK economy.  Hence while Internal
factors are more responsible for the failure of SMEs in UK small firms should
focus on improving goods and services, prove the quality of commitment to their
customers, sharpen the business process, bring in innovation, carry on better
book keeping practices and try to cut costs for driving profitability of their
firms.

With sustainable economic growth in UK
there has been a rise in small and medium size businesses in UK. SMEs are
growing on the country at an alarming rate. Like each and every economy SMEs
form to be the backbone of the UK economy as they contribute to employment and
GDP of the country. The causes of failure of SMEs in UK however have been
discussed in the preceding paragraphs. However most of the causes of failure of
SMEs in UK are seen to be internal rather than external. The government
policies are favorable for the growth and development of SMEs in the country
but lack of proper training and development is the main cause as to why SMEs do
not survive for a longer time. Thus some recommendations to improve the
internal factors leading to failure would be – maintaining a sharp focus on the
market. When small and medium firms are able to maintain a focus on the market
they would be able to adapt to these changes easily. The market is ever
changing which is truly recognized by big firms but is often ignored by small
firms as a result they fail to identify the changes and as a result they
fail.  SMEs should be more concerned
about their position in the market and how appropriate their position in the
market is. This would help them to identify the gaps and mend those gaps to
attain competitive advantage and grow over the years.

Another factor that would lead to the
success of SMEs is the fact that they need to bring in innovation in their
products and services and offer something new to their customers on a regular
basis so that they can attain a loyal base of customers. A financial discipline
is also important for SMEs to adopt, improper financial planning and
inappropriate book keeping and accounts might also lead to losses and closure
of small businesses (Bennett, 2016). Building resilience would also help small firms to
succeed in face of strong competition and external and internal causes of
failure. SMEs should have a prudent attitude when it comes to borrowing from
external resources since a careful planning would help in achieving financial
stability. Financial planning also helps small firms to have safety buffers
during economic crisis and have funding for growth in future. On the other hand
increasing international outlook and expansion of geographical footprint would
also enable SMEs to gain competitive advantage and attain sustainable growth.

When SMEs are able to bring in customers from other markets they are likely to
enhance growth. For example the German SME market is larger and at the same
time more innovative as compared to other markets.

The government of UK has been assisting
the development of SMEs with the help of regional grants for businesses. There
are certain areas which are marked as economically disadvantaged areas and
hence starting a business in these areas help SMES to have special regional
grants from the government (Bennett, 2016).These policies are adopted in order to help small
businesses to get the needed support for growth and development. The UK
government also has grants for research and development for facilitating the
growth of start ups in the hi-tech industries in UK. Tax incentives are also in
place in the country for supporting research and development activities. More
over other initiatives adopted by the government are the growth Vouchers
program which enables small firms in the country to access advice from experts
in the business field that help them to attain expertise thus resulting in
growth and development. Tax relief is also offered for small and medium
businesses in the country to help them grow. Tax relief is often seen in the
form of R &D tax, credits and capital allowances for reducing tax
liabilities of a start up business. Another program launched by the government
of UK is the National business support helpline. Under this program start ups
are given advice before they start up their business. Signposting and
diagnostic support is also extended to businesses under this specific program.

Some of the business support programs undertaken by the government of UK are
Mentors ME that gives access to business mentors from the SME community this
has been an effective effort in boosting the network of local mentors. The
Manufacturing Advisory service has been developed to help guide manufacturing
businesses in the country. This service helps in business planning,
manufacturing process, enhancing innovation and efficiency of manufacturing
businesses etc. The growth Accelerator on the other hand helps in the
development of specific skills necessary for a particular industry. This however
is an important program as the major cause of failure of SMEs in UK has been
identified as lack of industry skills. Another government body that is the UK
trade and Investment provides SMEs with advice on export capacities and
opportunities for a firm. This body also extends support to SMEs regarding
e-commerce, export training and market Research. Financial advice is provided
by British Business Bank which is a new initiative of the government. The
website provides all type of finance related information to start up companies
in how they can avail finance for their business. The advantages and
disadvantages of different types of finances available to SMEs are also
available in this website (Bennett, 2016).

Despite
the initiative undertaken by the government of UK SMEs operating in the country
are of   the view that their revenue will
shrink or will face a standstill in the year 2017 since they feel that the
initiatives adopted by the government is not effective in addressing their
issues.  Hence for improving the current
status of SMEs in the country the government must provide more information on
markets and consumer behavior so that they can build strategies based on these
businesses. Government should be able to provide useful information to SMES so
that they can protect their business from the economic uncertainty if any.  More over investment should be done by the
government for the development of robust infrastructure which would pave the
way for growth and development of SMEs in the country. Companies should also be
provided with better access to finances so that they can have better financial
planning for future enabling them to grow over the years.

Conclusion

Despite
being home to the largest proportion of Small scale business UK has not been
able to cope up with the increasing issues in the market. There are number of factors
that need to be worked upon in order to make a proper environment for SMEs to
operate in the UK business environment. There are challenges that the UK
government has to work upon in order to provide the businesses with environment
that is conducive for business. Irrespective of the size of the organisation it
is important for the entrepreneurs to make effective strategies for proper
operations of the organisation. As discussed in the previous columns there are number
of factors that affect the operations of the SMEs. Internalisation has changed
a lot of things and in business SMEs have gained importance but with the
constant ambivalent attitude of the government it has been tough for the small
scale organisations to operate their business. It could be said that the
economic environment has to be changed for the SMEs to work in the market effectively
(Huggins, Prokop and Thompson, 2017).

The
small scale organisations doesn’t get proper support in terms of finance and
this clearly shows how the organisations need to strategise their business in
order to get the best possible result. It could be concluded that it might
apparently seem the SMEs get proper support from the UK Government and the
other bodies regulating the business environment in the country. The support
that the Small scale companies mainly need is financial support and a proper business
environment that is important for the organisations to flourish. The political environment
in the certain regions has affected the business of the Small scale
organisations (Hanage,
Scott and Davies, 2016).

There
has been lack of planning and strategy for the SMEs to communicate with the
government about the consumers and their behaviors and the demands. It is
important that the small scale companies operating in the UK develop effective
strategies that will help better financial planning which would help the
organisations to strategise their businesses. Apart from that there are certain
smaller issues that the small scale organisations need to manage the business
operations. The IT problems have kept the small scale companies engaged to a
large extent and have also wasted a lot of time in that. The staffing issues
also need to be managed effectively in order to manage the operations
effectively (Escrivão
Filho et al., 2017). The SMEs have faced number of key
issues in the UK business environment and so, it is essential that certain
suggestions are made for the organisations to improve their possibilities of
doing business for a long time. The recommendations are as follows:

·     
The Small scale companies
need to improve their infrastructure for business challenges.

·     
The integration of
artificial intelligence for the use of big data in the business for better and
effective decision making.

·     
Better positioning of
leads and sales force.

·     
Development of
competitive strategy is important for the SMEs.

·     
Better communication with
the government about organisational position and market analysis implementation
for better performance (Bennett, 2016). 

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