What do Small and Medium Enterprises (SMEs), business advisors and funders think about the challenges faced by SMEs when they seek advice and funding to grow their business? That is the question that the Business Development Bank team, the user research and engagement team, and the mygov.scot team collaborated on to understand.
Together we designed and organised an SME Discovery day workshop to explore who SMEs are, the challenges they face and the changes we can make. Each team had a different role and agenda, but the core focus of the day was the user; the approach was with, not for.
The October workshop had 56 attendees, split over 8 tables. Each table grouped 7 attendees with 1 facilitator, whose role was to support the discussions and act as a scribe. The morning was devoted to understanding the background of each attendee and the challenges they faced. The afternoon was all about identifying changes and solutions that would help better meet their needs. The workshop day was just the first step – we plan to continue the conversation with the attendees by developing and sharing a workshop report. The next step after that will be to tackle some of the biggest challenges.
Thoughts on the day:
“I learnt more (about looking for finance) in the first hour than the last three weeks” – Discovery Day participant Rachel Gwyon, Head of Business Development Bank Division at The Scottish Government
“I found the day highly useful in that it reconfirmed my belief that there are a wealth of funding options available today for companies in Scotland. The challenge is in accessing this funding… but through information sharing, mentoring and access to networks a solution is at hand. I would be very supportive of future such events which bring together all stake holders in an open, collaborative environment. Thank you.” – Russell Dalgleish, Managing Partner, Exolta Capital Partners – Delegate
“During lunch I fell into a conversation with an attendee who told me that he had been attending events like this for over thirty years. “This one has a lot more dynamism… but what do you plan to do next? Usually nothing happens after.” The hard part, a surprise to many, is not undertaking research with your end-user, it’s continuing the dialogue about what you are or are not doing next, and how they can continue to engage with you. Feedback fatigue is rife – so how do we handle that?” – Kate Saunderson, Workshop facilitator and user researcher
“It was great to see so many attendees at the SME discovery session. The attendees at my table all had the same view – events like this are held but it’s the next steps that matter the most. One attendee voiced his frustrations with the gap in the availability of funding between seed and A-round funding and is keen to be kept up to date with future developments.” – Angela Macfie, Workshop facilitator and Transformation Manager
“The Discovery Day gave us a great insight into the issues faced by SMEs; we’ll use that and involve them further as work progresses.” – Russell Bain, Business Development Bank team
“I facilitated the group of funders, so it was interesting to hear their frustrations. I came away with three strong messages from their perspective:
- They all wanted to see businesses earlier in the process, and not at the point of critical need. They felt they could help to avert possible catastrophes by working over a longer period of consultation.
- There’s a consensus among fund providers that a wealth of funding opportunities are being missed by businesses with growth potential. Businesses are being put off by lengthy application processes and less transparent eligibility criteria.
- Directors are almost always wildly optimistic about the length of time it takes and the value of the return on investment.”
– Cath Hoult, Workshop Facilitator and Content Designer for mygov.scot.
Key finding #1: Terminology
The term innovation is an economically and politically topical term for business right now. Through discussions on the day it was noted that the term is being interpreted differently by different groups and organisations. One SME owner said he didn’t think he could apply for innovation funding as he didn’t see his business as innovative. His own interpretation of where his business fitted into the funding framework prevented him accessing funding opportunities. To give some background, the business in question is a recycling business (mainly focussing on hardware) which is a fashionable field for business investors right now – due to this there is a more proactive approach from funders.
Hanging a tranche of funding listed under an ambiguous term is potentially causing problems for accessing funding. We have encountered similar challenges to labelling in our engagement with other sectors. For example, if someone is defined by the system as a young carer but doesn’t identify themselves as a ‘carer’ we reduce access to that information. Another term SMEs had an issue with was the term creative – Government agencies saw a particular SME as a creative firm, but the company did not have the same view. Adopting a different label can affect how you pitch to investors and how investors see you. Asking ‘who are we as a business?’ could have wider implications in the context of the business plan. For the mygov.scot site we are having a discussion around how we can make funding more transparent by defining industry terms (such as innovation or creative).
Key finding #2: Categorisation
During discussions it became clear that across business organisations the classification of businesses is different. Sometimes the sector that a business thinks they are in does not conform with what business organisations and banks think that business should be in. New businesses often begin their business registration journey on GOV.UK’s ‘registering a company’ page (which gets over 1.98K page views a day). The business sector categorisation terminology used on the GOV.UK page is highly likely to influence the business’s own sector definition and so it makes sense for banks and business organisations to follow this same Companies House classification.
Key finding #3: Funding tool
At a couple of tables nobody had heard of the business funding search tool either on mygov.scot or, more worryingly, it’s predecessor on the Business Portal (business.scotland.gov.uk, which recently moved to be a part of mygov.scot). This raises alarm bells that our own government internal processes are failing to alert users to tools that may help them, and reminds us all in the mygov team that we still have a lot to do to get the word out about some of the great content on our site. From a user’s point of view, having a single point of information goes a long way to improving informed decision making. The more people who use the funding tool, the more traction we’ll have to drive evidence-based design. One participant had never heard of the funding tool yet when the feed updates with their “competition” it will display details of their fund – to not know is to miss out. It’s a fundamental flaw if such a powerful tool to aid advisors, let alone businesses, is not being used. And if there are problems we want to hear about them – the more users who interact with (and feed back about) the funding tool, the more data and feedback is analysed, and we can make tactical designs based on something better than opinion.
We talk about user journeys a lot in the mygov.scot team and in some ways this workshop was just one step in our own journey – work that began way back when when we started taking on the responsibility of the Business Portal site continues as we interact more with business users. Over the next few months our work on our business content will continue and we’re glad to have made a bunch more SME connections – our goal is to make business content (especially funding) simple to find and easy to use… and we’re glad to be well on that journey.
Follow the team via @mygovscot on Twitter for more updates. Want to comment? Let us know below!