SMEs embrace collaboration to weather tough economic conditions

POSTED: 28th March 2013
IN: Business news

Against a backdrop of today's cautious lending culture, many smaller British companies are turning to alternative business models to remain competitive, including collaboration and outsourcing.

Courier service CitySprint revealed in a recent Collaborate UK report that 24 per cent of SMEs are now more open to working with other small businesses, in reaction to the challenges of the current economic climate. On average, SMEs were shown to work with 23 business partners in 2012, either to reduce the burden of operating costs, to share advice, or to work together on obtaining new leads and accounts.

In addition to this increased propensity to combine efforts or resources, SMEs report outsourcing an average of five business functions to third parties, spending a mean outlay of £206,772 on outsourced activities.

There are undoubtedly several positive conclusions to draw from these results, as SMEs become more nimble by stripping back their work profile to reflect the business' core competencies and benefit from the expertise of others. Conversely though, these businesses are also left more reliant on partner businesses and limit the scope for growing their own services or business portfolio.

Perhaps a telling statistic is the fact that 39 per cent of those surveyed expressed the intention to reduce the volume of outsourced work in 2013, compared to just 18 per cent planning to increase it. For many, it seems the benefits of nurturing internal talent and growing operations from the ground up still holds appeal.

However, the reality of the current financial climate may not necessarily fit with this preferred route. Numerous SMEs have expressed that they are struggling to obtain crucial funding from traditional sources to overcome the first initial barrier to expanding their business. As a result, these businesses may be forced to resort to outsourcing certain business functions.

Seeing the importance of supporting SME growth to refuel the flagging economy, Aldermore is dedicated to reversing this trend of SMEs being denied access to vital lending capital. Instead of a blanket approach to lending decisions, Aldermore's financial experts personally assess each case on an individual basis, to ensure promising businesses are given the opportunity to flourish.

Taking SME feedback into consideration, Aldermore have refined our financial services to best serve the needs of the UK small business community and hope to allow even more SMEs to pursue their business goals in the future.

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