Are small businesses wasting money on consultants?

New research commissioned by Zeqr has found that UK SMEs spend a total of £60 billion per year on external consultancies. They don't, however, always get the results they want, with an estimated £12.6 billion of that sum being used on services that are poor value for money. 

Cautious optimism

The scale of the costs doesn’t come as a surprise. SMEs account for 99.3% of UK companies and have a combined turnover of £1.8 trillion. What’s more, many small businesses are sure they will continue to grow over the coming year.

FSB (Federation of Small Businesses) members recently reported higher confidence levels and more exports. This suggests that they’re making the right decisions for their future – but balancing the challenges of new expenditure with the benefits of growth is still proving difficult for some.

Risk and reward

The Zeqr study found that 50% of small companies lack essential growth skills, but also that many still felt deterred from bringing in experts. 49% said consultancy costs were over-inflated and 39% were concerned about the level of knowledge and skills on offer – so finding the right advisors and taking the plunge is proving tricky for UK SMEs.

Sensible spending

The number one goal for 39% of growing UK SMEs this year, according to Hitachi Capital Business Finance, is keeping fixed costs down. This compares to 25% who are targeting expansion into new markets. When taken in combination with the number of companies who are sceptical of advisors, this suggests a generally cautious approach to the future among many companies.

Whether your business is targeting new clients or looking inward at cutting costs and improving cashflow, the right support can prove key. While some advisors may fall short of expectations, others may provide assets or improvements in essential areas, from driving efficiency in accounts to improving marketing return on investment.

More importantly, recent studies show that value for money is not subjective. If your company has a pain point or knowledge gap, that’s where outside advice can help. And with thorough research of all your options, you could find it makes a big difference.

For more information about how Dukes Bailiffs can help your business, contact a Dukes operator today.