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Managing and Leading SMEs - Accurate Essays

Managing and Leading SMEs

Managing and Leading SMEs

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Managing and Leading SMEs


Small and medium enterprises (SMEs) in the UK have witnessed a steady rise over the recent past. There were approximately 5.5 million SMEs (with 0 to 49 workers) at the beginning of 2021, which represents about 99% of the entire business (FSB 2021). SMEs in the UK contribute to about 99% of the entire business population in the region. Moreover, SMEs stands for three fifths of the workforce and at least half of turnover of the private sector in the UK (FSB 2021). The total number of those employed in the area is about 16.2 million people, which represents 60%, whilst those quitting work in these areas (turnover) is estimated to be worth 2.4 trillion pounds (FSB 2021). Nonetheless, development in business population dropped by at least 390,000, which represents 6.5% within 2020 and 2021 (FSB 2021). Besides, business in this area grew significantly between 2000 and 2021 when the business population escalated by more than two million, with the largest expansion of more than 6.7% recorded between 2013 and 2014 and 6.6% from 2003 and 2004 (FSB 2021). The objective of this research is to study is to identify some of the challenges facing SMEs in the UK, and to find out whether the government has enacted any mitigating measures. Findings from the study may help SMEs to make proper preparations that would help them to deal with issues that disrupt operations. The study relies on secondary materials to gather data, which provides a suitable chance to understand what various scholars say about the identified issues. Despite the challenges that SMEs encounter, it is possible to embrace measures that would help to overcome concerns that could derail how such firms perform.


Small businesses in the UK should watch out for some of the issues that could impact on their businesses negatively and take swift measures to address the situation. One of the issues that many SMEs encounter is lack of effective leadership structure which also impacts on strategy development. Unfortunately, lack of effective leadership and development is absence of effective business planning techniques (Cassia & Minola 2012, p. 182). While a significant number of SMEs rely on certain documented planning tools that help the firm pay attention to what matters, some lack the capacity to offer guidance on how to create a more robust structure to guide business practices. Another issue that impacts on the operations of SMEs is inability to cope with the rapid changes in technology. Cassia and Minola (2012, p. 184) inform that technological transformation pose a significant challenge to the advancement of SMEs. Most of these forms are not able to embrace and use new technology because of the high costs associated with acquisition and installation (Cassia & Minola 2012, p. 182). Furthermore, in many instances, the new technology does not meet the requirements of these organizations. The problem is much serious for firms located in interior places because they find it difficult to gain fully from technological growth and advancement.

The UK government has introduced various measures that it hopes will help small businesses overcome the identified issues. The government has collaborated with other agencies to equip SMEs with information that help with forming leadership structures and business strategy. For instance, the Arts Council of England offers a wide range of information to SMEs that help to improve their practices (Intellectual Property Office 2020, p. 2). On the other hand, the Department for International Trade offers training and advice on selling in their nations, from contacting suppliers and identifying target markets (Intellectual Property Office 2020, p. 2). Such training initiatives play fundamental functions in equipping SME leaders and workers with valuable skills and awareness that would help them improve their practice.

Regarding technology, the government facilitated the development of catapult centers and the Technology Strategy Board to help SMEs embrace technology and benefit from it. Catapult centers serve as global-leading technologies and innovative hubs that bridge the gap between the government, research, and business (Intellectual Property Office 2020, p. 4). The centres help SMEs to embrace innovative concepts while using technology that has the potential to transform how the organisation functions. On the other hand, the Technology Strategy Board provides guidance in various areas that help SMEs to advance their technological proficiency (Intellectual Property Office 2020, p. 4). The Board offers adequate guidelines that enable SMEs to make use of renewable energy as well as that help to achieve improved transport systems. The Board also provides valuable information concerning how SMEs may gain from digital forms of technology that continue to transform how businesses conduct their operations (Intellectual Property Office 2020, p. 4). Such interventions play critical roles in equipping SMEs with skills that make it easy to incorporate technology. Furthermore, the Manufacturing Advisory Service (MAS) offers manufacturing business aid for firms of all sizes including SMEs (Intellectual Property Office 2020, p. 6). The government initiative based in England works with highly qualified and competent technological advisors who work with individual SMEs to help minimize waste, streamline operations, and become increasingly energy efficient.


Outside the UK, small business owners are grappling with contemporary issues that impacts significantly on how SMEs impact on firms. A major challenge facing SMEs in other parts of the world that deter their attempts to achieve growth is lack of enough knowledge and skills (Omar et al., 2009, p. 96). Every work position regardless of whether in a small business requires adequate skills and information. Nevertheless, research indicates that most of the members of staff in SMEs lack enough education and knowledge to expand their businesses and become more prosperous. With a lack of skilled workers, productivity can depreciate and result in lengthened operation costs, reduced production times, and other performance concerns (Omar et al., 2009, p. 97). Consequently, SMEs have no option but to treat the concern with the urgency it deserves; otherwise the business may fail to achieve most of its key goals and objectives. Taking measures to improve knowledge and skills presents a better chance to enhance staff productivity because workers are able to gain from their colleagues’ expertise and knowledge to identify the most suitable way to do things. Consequently, employees feel more acknowledged and appreciated in an organisation where their ideas are acknowledged and appreciated (Omar et al., 2009, p. 98). In addition to lack of adequate knowledge and skills, SMEs outside the UK experience significant challenges putting up with new laws and regulations taking into account that governments continue to create new regulations that determine business practices. New legislations are formed with the goal of regulating the operations of SMEs and large corporations. These regulations are also enacted to foster sustainable economic stability in the country. Nonetheless, such regulations sometime present significant challenges to the expansion of SMEs. Such issues require effective remedies to ensure SMEs remain operational.

The remedies should provide concrete solutions to the issues that deter SMEs from growing in other parts of the world.  A suitable remedy to the issue of lack of skills and knowledge among employees is to offer relevant training, especially in areas that require much attention and focus or where employees show great weakness. Training workers has many benefits other than equipping them with relevant skills and information (Omar et al., 2009, p. 99). The process presents an opportunity to enhance performance and productivity and to minimize wastage while performing organisational operations. Furthermore, adequate training makes it possible to improve employee morale, which impacts directly on their performance (Omar et al., 2009, p. 99). On the other hand, an effective way to deal with the issue of inability to cope with changing legislations is to encourage members of staff to acquire information about these policies and how they are likely to change. However, team leaders should also be at the forefront informing workers how laws and regulations impact on business operations and how they constantly change to reflect changing business needs and environments.


The study identifies challenges that deter SMEs from achieving their aspirations in the UK and other parts of the world. Challenges such as improper leadership and lack of effective leadership are some of the challenges that SMEs face in the UK. Inadequate leadership makes it difficult for SMEs to develop effective strategies that would help them compete effectively. The same happens with lack of proper technological skills that make it difficult for SMEs to conduct certain operations effectively. Globally, SMEs encounter significant hurdles such as lack of adequate skills among employees and inability to cope with changing laws and regulations. An effective remedy to lack of skills and knowledge among employees is to train workers that offers an opportunity to gain valuable skills and information that help to foster growth. A suitable way to familiarise employees with readily changing laws and regulations is to encourage them to learn about existing laws and how they change. Team leaders should also take the initiative of familiarising workers with changing legislations. The findings suggest that SMEs have an opportunity to grow if they adequately address the challenges that could affect their performance and ability to grow.


SMEs need to consider certain factors that would help to overcome the challenges that could evidently interfere with their operations if nothing happens to salvage the situation. A suitable strategy to help SMEs in the UK and other parts of the world to is to emphasise on training practices that provides an opportunity to gain new skills and information. The venture could be costly but with proper planning it would be able to achieve the most appropriate outcomes. Another effective approach that could help SMEs to progress effectively and overcome the challenges that could affect their operations is to conduct a SWOT analysis that presents an opportunity to know the firm’s strengths, weaknesses, opportunities, and threats that could affect how the SME works. A well-planned SWOT analysis provides an opportunity to understand where the firm needs to improve on to achieve impressive outcome. In addition, a SWOT analysis presents an opportunity to know what other firms do that could threaten organisational performance and to take suitable mitigating measures. SMEs that embrace the recommended techniques are better placed to deal with issues that affect SMEs and are likely to achieve growth and sustainability.

Reference List

Cassia, L, & Minola, T 2012, ‘Hyper-growth of SMEs,’ International Journal of Entrepreneurial Behaviour & Research, vol. 18, no. 2, pp.179-197.

FSB 2021, UK small business statistics. Available from: <> [Accessed December 10, 2021]

Intellectual Property Office 2020, Business support for SMEs: Maximising the value of intellectual property. Available from: <> [Accessed December 10, 2021]

Omar, S, Arokiasamy, L, & Ismail, M 2009, ‘The background and challenges faced by the small medium enterprises: A human resource development perspective,’ International Journal of Business and Management, vol. 4, no. 10, pp. 95-102.

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