Could growth vouchers eventually grow on business?

Back in January 2014, the government launched a ‘growth voucher’ scheme aimed at supporting small businesses. It was designed to help SMEs gain access to technical and financial advice and offered £2,000 if companies were to match the funding with their own cash.

The idea was that small firms and start-ups would benefit from financial advice, assistance with business planning and marketing consultancy. Just the kind of boost that would allow them to take the next steps towards expansion.

In order to qualify, you needed to be an independent company with fewer than 250 employees and turnover or assets of under £50m.

Although the principle seemed sound, the scheme wasn’t as much of a success as the government had hoped. Out of a pot set aside of some £30m, only £3.6m was actually used. Even more strikingly, only 1,800 of the 7,000 successful recipients spent their vouchers.

So what lessons can be learnt? Well, first of all, the vouchers weren’t very well advertised. And even if you had heard of them, it wasn’t entirely clear what you were able to use them for.

When firms are growing fast, they’re often very focused on the day-to-day challenges of the business and may not be ready to reflect with external consultants. Although marketing support is always valuable, the chances are that most companies would already have created a business plan some time previously.

There’s then, of course, the issue of finding your own £2,000 up front in order to make use of the £2,000 voucher.

The government is putting a positive spin on the programme, arguing that it was effectively a piece of research that we can learn from. It may be that if a new version of the voucher programme is planned, consideration should be given to widening the range of potential consultancy and support that companies can access from approved suppliers.