The Great British SME Revival
New research from the Barclays’ Entrepreneurs Index has found that there are now more SMEs operating in the UK than ever before, with our fair isle now seen as Western Europe’s key start-up hub.
With the UK’s economic environment having undergone a gradual process of regeneration since 2008’s financial crash, the terrain, now smooth and enriched with opportunity, appears ready for harvest. Government policies are now being reconsidered to take into account the likely impact on small and medium-sized enterprises; indeed, such realignment has proved crucial to the recovery, with SMEs proving to be a driving force in the country’s financial upturn.
Over the second half of 2014 there was a 3.9% increase in the number of new start-ups – the highest upsurge since records began in 2012 – to over 3 million, whilst 7.1% of 18-64 year-olds are currently involved in the development of a new business. A new culture of entrepreneurship is upon us; the DIY ethos that now pervades UK business emanating from a combination of growing distrust towards multinational corporations, concerns over the job market, the fear of losing control of one’s own future and, for a lucky few, surplus capital for investing.
However, though self-autonomy may be the new economic focus, the need for support is no less important.
Despite Their Importance, Many SMEs Still Fail
The importance of SMEs can be clearly demonstrated by the fact that, according to statistics from the Department for Business, Innovation and Skills, 99% of the UK’s private sector businesses are SMEs. Small to medium-sized enterprises account for ￡1.6 trillion (47%) of the UK’s annual turnover, whilst such companies also employ upwards of 15 million people.
However, despite their importance to the economic recovery, many small businesses still fall by the wayside. Research from RSA posits that up to 50% of the UK’s SMEs collapse within five-years, a stat that, surprisingly, exceeds the rate of failure pre-financial crash. This is owed partly to saturated markets, a tax system still out of touch with the contemporary eco-structure, and the costs of running a business – yet there’s another factor at play too.
Underinvestment in advertising represents a danger to the long-term health of an SME, in that it limits growth. Research from Deloitte highlights how only 30% of small to medium-sized enterprises advertise – despite the fact that every ￡1 spent on promoting a company of under 250 employers benefits that brand 8x than it would a larger firm, relatively speaking. Additionally, of the SMEs that do advertise regularly, two thirds believe that it represents good value for money. So, why the reluctance to advertise?
Currently, SMEs account for roughly 18% of overall UK ad spend. This needs to change if more enterprises are going to make it beyond the five-year barrier.
Why the Answer Could be TV Advertising
Guerillascope estimates that less than 2% of the UK’s 3.5 million SMEs are presently advertising on TV. Yes, you read that correctly – there are no missing digits. This figure is the by-product of a lack of awareness around TV’s evolution into a platform perfectly calibrated to deliver sustainable business growth at affordable costs, rather than a reflection on its pitfalls, most of which are either myths or outdated beliefs.
The fact is TV advertising serves small businesses more effectively and more efficiently than ever before. Even ignoring the point that the average cost of a TV spot is now 20% less expensive than it was a decade ago (one single view of your advert now costs just half a penny), new targeting capabilities mean that response rates increase and lead to more sales, whilst believe it or not, the UK as a population is watching more TV than it was a decade ago, with 71% of adults reached every day and 2 hours 25 minutes of commercial TV consumed per individual.
Platforms such as Sky Adsmart enable advertisers to pinpoint target audiences by household composition, age, occupation, postal area and lifestyle attributes – the result of which is improved ad relevancy – whilst TV planning and buying strategies implemented by smaller, independent TV agencies are exhibiting a reconfigured focus that serves the bespoke needs of small businesses requiring reach, frequency and response at affordable rates.
Long term, TV advertising campaigns spanning three years or more have been shown to increase company profits by an average of 140%, with 45% of all sales effects manifesting after the first year of activity. This demonstrates TV’s effect, both short term and long, but why? According to Thinkbox, 69% of all web traffic derives from paid media, with 47% of that directly attributable TV. Essentially, television adverts still catch our attention and still engage, driving a generation of multiscreen TV viewers online to research compelling brand messages or products in greater detail.
TV is not the be all and end all when it boils down to the success of your business – depending on your specific sales proposition, it may very well be an unviable, or unnecessary avenue for you – but for many, it may just be the catalyst a company requires to reach the next level. If you have the ambition, product/service and business model to make the most of TV, then discover how, from as little as ￡10,000, Guerillascope can support the sustainable growth of your brand. Simply call 0800 357 675, or email [email protected].