Aaron Dicks assesses what the government’s Growth Voucher initiative was aiming to do, how it has helped the companies that have used it and where the scheme’s pitfalls were found.
What was the scheme aiming to do?
The government has a long-term plan to make Britain the best place in the world to start up a business. As such, they have set up a series of grants, loans and funds to help small businesses grow. The Growth Vouchers programme was a £30 million, government-backed fund that was created with the aim of enabling small firms across the country to access expert business advice and support. Growth Vouchers were available up to a value of £2,000 and they covered 50 per cent of the total spend; ie the government will match fund you up to £2,000.
How has it helped businesses?
The Growth Voucher scheme has enabled small businesses who might not normally be able to afford to do so to seek support and advice. What these businesses have gained from the scheme is strategic advice and strategy documents about their competitors and the industry in which they sit, around a number of topics including marketing, management and managing cash flow.
The advisers were specialists and members of a trade or professional body. Advisers from digital marketing agency Impression Digital offered the ‘marketing, attracting and keeping customers’ voucher and their clients used the Growth Voucher scheme to invest in a long-term online marketing strategy. Online marketing is an area that is highly skilled and a large proportion of small businesses have limited knowledge on this, which is where the Growth Voucher scheme has perhaps been most useful, as it has enabled small businesses to gain advice in areas where they have very little knowledge. Impression’s clients have now got a clear outline for what they need to do with their digital marketing thanks to the Growth Voucher scheme.
Could the scheme have been improved?
A lot of small businesses could potentially benefit more from actually receiving work with the money they spend on the Growth Vouchers, rather than just simply acquiring advice. Advice and support is definitely useful to small businesses and the scheme has proven to be key for some of them to reach their goals. However, particularly with the ‘marketing, attracting and keeping customers’ voucher, a small business may struggle to implement any of the advice or strategy that they have received from their adviser without hiring someone to do so. As such, it may have been beneficial for the scheme to also allow small businesses to receive work in addition to advice and support.
One downside is the services which the scheme allows advisers to offer have sometimes been limited and have meant that in some cases, the scheme has not been able to benefit a small business, which it could do if the scheme was a little less restrictive.
Has the scheme been a success?
The scheme has now closed and we are yet to see the final take-up figures, however when there were just a few weeks remaining, it was reported that only £3 million of the £30 million fund had been used. Whether this is due to lack of interest or awareness remains to be seen. The uptake was quite slow initially and many businesses were not aware of it until it neared closure. Advisers meanwhile reported seeing a rush of businesses wanting to access Growth Vouchers during the last month of the scheme, with a 500 per cent increase in applications in February 2015 compared to February 2014. Even though the scheme has now closed, if a business had successfully received a Growth Voucher, they are still allowed to spend it up to three months after the closing date.
One of the more successful areas of the scheme was that it was a really simple service which only took a few minutes to sign up for and money was returned to businesses within ten days of purchasing advice and support from advisers. This made it very appealing to small business owners who often struggle with both finding the spare time to apply for such schemes and also with maintaining their cash flow.
The ultimate objective of the Growth Voucher scheme was to help towards the government’s aim of making Britain the best place to start a business. As such, the scheme has been useful to both the advisers and the businesses seeking advice, fuelling British business at both ends of the spectrum, from small businesses to larger, more established ones. Some of the businesses we advised have subsequently turned into longer-term clients. Schemes such as the Growth Voucher have helped us get to where we are today, so we’re pleased to be able to help other businesses grow and we look forward to future schemes.
During 2014, there was a 10 per cent rise in the number of registered businesses in Companies House, up to 581,000 from 526,000 in 2013, with a 6 per cent fall in the number of businesses that closed during the same timeframe. This illustrates that government-backed schemes such as the Growth Voucher scheme could be responsible for helping businesses in the UK to grow, survive and flourish.
Aaron Dicks is managing director of Impression Digital, an adviser in the Growth Vouchers initiative.