The value of effective time management among small and medium-sized enterprises has been highlighted for the first time in a new report – with SMEs that do manage their time well proving a fifth more likely to clock up higher growth margins than those that don’t.
The report by Exact and the Centre for Enterprise and Economic Development Research (CEEDR) shows SMEs with above average levels of operational efficiency – based on 17 different operational functions – not only have greater productivity levels, but are also “considerably” more successful in terms of achieving sales growth and more optimistic about continuing to do so in the future.
While external market factors have impacted the 757 SMEs who took part in the research, the report suggests a key part of improving performance levels is through the adoption of new technologies – but many, particularly smaller businesses with 40 employees or fewer, are unable to do so because they are too busy to step back and take stock of existing processes.
The research, which included input from SMEs in the manufacturing, professional services and wholesale & distribution sectors, showed 70% of those that consider themselves to have above industry average levels of operational efficiency saw sales figures increase last year, with just 8% experiencing falls. This compares to just 50% who saw sales figures grow among those with below average levels of operational efficiencies, with nearly a quarter (24%) of them seeing sales decrease.
Furthermore, among the 3% elite group of trailblazers, those SMEs who managed to increase their sales turnover by more than 100% last year, 56% had above industry levels of operational efficiency; none of them had poor operational efficiency levels.
The report shows adoption of new software is “significantly” related to better growth performance, most notably through the use of cloud and mobile technologies. Almost one in five businesses surveyed used cloud solutions, 78% of whom are deemed to be operating at above industry norms.
“These findings come on the back of recent Government statistics showing the vast majority (68%) of the UK’s 4.9 million SMEs set out to grow their businesses last year, but only 13% succeeded in doing so,” said Dr Rob Baldock, Principal Researcher at CEEDR. “The message from our research is an extremely strong one. Effective time management is of considerable importance in increasing performance capacity and growth, yet less than one quarter of SMEs see it that way.”
Although fear over the costs involved in introducing change is a barrier among SMEs who are performing less well, notably those with 40 staff and under, the report states that proportionally a far greater barrier lies in the fact that many (36%) lack the time to consider improvements and do not know where to find appropriate help and advice to address their problems.
Lucy Fox, General Manager, Cloud Solutions at Exact UK, said: “What this research proves is the extent to which time management efficiencies can impact on business performance. It shows that the majority of SMEs are focused on growth and many working at full or near capacity to achieve that, but not always focusing those efforts in the most productive way.
“It’s also clear that one quick way for small businesses to make immediate operational efficiencies is to invest in cloud and mobile technologies - with almost 80% of those businesses already doing so performing above their peers for operational efficiency. What’s more, these businesses are also experiencing better growth performance.”
“While there is plenty of financial support being offered to SME businesses through growth accelerator funds and Government grants, more needs to be done to help support them in other ways, given many are just too busy to do anything about it,” she added. “Time is one of the most valuable commodities SMEs have, and it needs to be invested wisely.”