SMEs relying on brokers more heavily in 2020

by Madison Utley15 Dec 2020

Over the past year, a majority of SMEs have relied more heavily on their key advisor – and "overwhelmingly" reported doing so as having had a positive impact – than ever before, according to ScotPac SME Growth Index research.

Nearly 54% of the more than 1,000 small businesses surveyed by East & Partners on behalf of ScotPac said over the last 12 months, they had turned more regularly to their advisors, such as their accountant or broker; on average, they indicated reaching out 13.3 times each quarter.

Only one in 10 of the SMEs "went their own way" and declined to seek external advice, with less than 5% saying they relied less on their key advisors than before the pandemic.

Conversely, eight in 10 (82%) SMEs who sought advice from trusted advisors said it had a positive impact on their organisation's operations.

“Successfully navigating through the recession caused by the COVID crisis requires SME owners to make the hard decisions about their business – without delay,” said ScotPac senior executive Craig Michie.

“Given that many SMEs indicate they don’t know how to fund their business in 2021 and given the high degree of change and uncertainty about how to go about business, it’s a lot to ask traditionally time-poor business owners to go it alone.

“Cash flow management and funding advice will be more important than ever in steering SMEs through the pandemic aftermath.”

Small businesses who did not seek specialist advice during the pandemic said it was because they did not have enough time in the day (40%), didn’t need advice (21%) or the cost of advice was too prohibitive (18%); but, according to Michie, it’s important small businesses continue to seek expert advice as they navigate back to smoother waters in 2021.

“We see it time and again, that businesses with a trusted broker in their corner have a much better chance of success,” he explained.

"Often a broker can guide their small business clients on structuring a deal - and they can make it happen much more quickly and efficiently for their SME clients.

"Businesses will give themselves a better chance of success if they continue this trend in 2021 and beyond, and I feel the smart businesses will do so.”