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BIG conference presentation on SME segmentation

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Martin Wootton presentation to the BIG conference, May 2014, on the need for research companies and business to recognise the huge differences that exist between companies categorised as SMEs.

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BIG conference presentation on SME segmentation

  1. 1. Criminal Activity: SMEs – why size matters Martin Wootton, Research Director
  2. 2. Meet some of the suspects…
  3. 3. “The research identifies that only 37 per cent of staff in small businesses have above average IT skills” UK Federation of Small Businesses, Digital Imperative Survey, published 2013 http://www.fsb.org.uk/frontpage/assets/fsb-intellect-april13.pdf
  4. 4. “A third of SMEs think their turnover will increase in the next 12 months, with another third thinking it will stay the same, and 31 per cent thinking it will decrease” 2009 Survey of SMEs UK Department of Business, Innovation and Skills http://www.bis.gov.uk/assets/biscore/enterprise/docs/10-636-2009- finance-survey-smes-results
  5. 5. “A survey of 750 UK SMEs found that the main reason holding businesses back is perceived cost, with 90% of respondents indicating that international expansion is too expensive” Baker Tilly survey of UK SMEs, published 2014 http://www.bakertilly.co.uk/media/news/pages/SMEs-reluctant-to- expand-internationally-says-survey.aspx
  6. 6. What do these all have in common?
  7. 7. SMEs
  8. 8. How to define SMEs? AUSTRALIA US EU Minute/Micro 1-2 1-6 <10 Small <15 <250 <50 Medium <200 <500 <250 Source: http://en.wikipedia.org/wiki/Small_business#Size_definitions
  9. 9. Q. Why are SMEs important? A. Because they account for the large majority of all businesses
  10. 10. In the US, small business (<500 employees) accounts for more than half of private sector GDP and around half of private sector employment Enterprise Employment Home Office Self employed 1-9 10 - 49 50-99 100-249 250-499 500+ Total Agriculture 18,620 170,661 103,855 24,970 4,053 26,498 21,330 1,298 475,140 Mining and quarrying -5,140 2,836 3,068 1,920 26,398 28,966 16,435 87,599 Manufacturing 57,737 164,953 360,897 494,440 237,258 322,874 266,774 1,189,396 3,455,226 Electricity, gas and water supply -3,064 5,197 5,622 3,518 30,741 46,596 61,129 161,064 Construction 41,741 774,292 686,841 364,004 86,591 90,404 62,783 350,552 3,144,049 Wholesale and retail trade 84,341 350,857 1,073,898 587,289 155,444 165,942 122,519 2,128,971 5,743,159 Hotels and restaurants 54,729 58,939 382,806 187,472 48,867 46,034 29,739 483,777 1,675,169 Transport, storage and communication 18,849 222,521 209,364 165,703 56,705 71,851 64,884 1,137,637 2,156,878 Financial intermediation 28,222 29,996 73,559 56,774 22,952 36,049 33,402 905,088 1,259,601 Real estate, renting and business activities 165,088 499,124 933,234 474,118 155,289 175,742 131,806 812,021 4,279,656 Public admin and defence - - 4,139 4,033 2,809 11,570 36,109 2,119,518 2,182,317 Education 92,219 - 428,970 521,993 298,508 407,841 265,530 995,093 3,439,124 Health and social work 41,849 191,614 357,534 692,421 172,374 108,991 62,124 2,309,628 4,294,069 Other community, social activities 32,086 328,190 536,931 223,330 60,774 71,417 52,287 416,034 2,257,980 Personal Services 41,882 21,870 79,213 12,859 3,999 - - -239,036 Total 677,363 2,821,221 5,239,274 3,818,096 1,311,061 1,592,352 1,224,849 12,926,577 34,850,067 8.7M 3.8M 2.9M
  11. 11. The consequences of poor SME research • Loss of trust • Loss of face • Loss of clients For both agencies and clients
  12. 12. Advice for crime prevention 1. Make sure your clients know the importance of their smaller customers – especially if they don’t believe they are important. 2. Make your clients aware that you can’t treat all smaller businesses as one group.
  13. 13. Alternatives to SMEs Select a specific sector or vertical market Add a behavioural classification to that sector or market Managed vs. unmanaged IT Banking or pension arrangements Recent spend on specific services Number of Directors
  14. 14. Tips for best practice DON’T GENERALISE – the ONLY accurate classifications and meaningful findings are sector-specific Number of employees can be really misleading – AVOID if possible Be creative with sub-classification Don’t ignore home workers, franchises, and serviced offices! Think about WHY you want to survey SMEs as a whole
  15. 15. (classified as both a small and a mid-sized business by the EU!) Thank you, (and don’t have nightmares)

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