Business standards - the key to SME training

When Justine Chilton was setting up her corporate event management company in 1996, she decided to take an NVQ in business planning - just to be sure she was doing everything right. This turned out to a good decision, because the course led to her first award, and to a business that now has a turnover of £220,000, despite having only two employees.

Chilton puts much of her success down to the fact that her NVQ was constructed around performance standards drawn up by the Small Firms Enterprise Development Initiative. SFEDI was set up by the government to establish what owner managers - and their advisers - must not overlook if they are to run their firms effectively.

It certainly worked for Chilton. Not only did she win a SFEDI achievement award, but the standards are now an essential part of the way she does business. "I could not have set up the business as successfully as I have done if I didn't have the standards," says Chilton. We have to do everything - our own marketing, advertising, events, sales, accounts - and the standards act like a tick list, helping you figure out how to get things done. They teach, help and guide you to do things in the best way possible, and then that's how you continue because that's how you've learnt to do things.

This sort of success may be why the government recently awarded SFEDI's chief executive, Tony Robinson (pictured) an OBE. But Robinson believes the award is simply part of Westminster's increasing emphasis on the importance of small businesses to the general economy. The 'think small first' concept is slowly getting through, says Robinson. Recognition for SFEDI means the government is aware there is a lot to be done in terms of improving the quality of support to small businesses.

SFEDI was set up in 1995 as the national training organisation for SMEs. Funded mainly by the Department for Education and Employment, SFEDI's main objective is to improve the quality of small business learning and development. Tony Robinson's ambition is for 100,000 start-ups a year to draw on expertise, courses or advisers that have been informed by SFEDI standards.At very least we would know that all those start-ups had identified any areas where they might need help and would have put together a simple user-friendly business plan.

Robinson is keen to emphasise that the information contained in SFEDI's standards is not mere jargon-ridden management advice, badly adapted from manuals originally written for the executives of large corporations. I remember seeing a programme on budgeting for small business and it said 'you may have to wait six months for departmental approval', he recalls. It was clearly a big company package they were flogging to small businesses and it was totally inappropriate.

The problem is, Robinson says, there's a huge market in business advice, but its quality is variable. If you're starting up a business, you're a bit of an innocent abroad, says Robinson. If somebody tells you you need £30,000 to start up a particular kind of business, how are you to tell if they're telling the truth? But if you've got the right competence in terms of the adviser, ie they've been trained to SFEDI standards, then you've got a many hundred percent chance that you're going to get the best advice to start up your business.

But what qualifies SFEDI to tell owner managers how to run their businesses? In addition to Robinson's experience running an education and training consultancy and the organisation's chairman, Stuart White's stint as head of small business at Midland Bank, SFEDI's great strength is the fact that its board is composed entirely of active owner managers.

Drawn from sectors as diverse as jewellery manufacturing, hairdressing and IT, every person on the board has tested SFEDI's standards themselves. What SFEDI does could be done by anybody in a way, says White. We bring together people with the right experience. The business standards have been developed by SFEDI analysing successful businesses and talking to the owners to establish what is the best way to become successful. What SFEDI does is codify that into a set of best practice standards.

Not only must all UK NVQs be based on SFEDI's standards, they are fast becoming the basis for the training of all SME advisers. Employees at the DTI's Small Business Service, Investors in People and Technology Means Business have been trained to SFEDI standards. The standards are also used in learning media such as the University for Industry and the BBC's Make A Break video series. And most enterprise agencies now offer business start-up programmes linked to SFEDI standards.

There are currently 650 training centres using SFEDI standards for training start-ups. By 30 September 2000, a total of 14,776 individuals had taken at least one unit of the four available NVQs and SVQs based on SFEDI standards. However, Robinson estimates that six to seven times as many people use the standards in their book or CDRom format.

SFEDI is currently in the process of drawing up a new set of standards for business planning, development and support services. Not only have the Business Start-up Standards and the Business Development Standards been rewritten in conjunction with the Plain English Campaign, both sets of standards kick off with a business health check. They also emphasise only what is absolutely important, allowing businesses to identify their weaknesses. There is also much new information on information and communications technology, and on effective marketing and selling procedures.

If Robinson has one gripe it is that small businesses are sceptical about the benefits of training and unwilling to risk valuable time and money on it. My major passion is to increase our engagement with SMEs so they trust the learning programmes that are there to help them.

Ultimately, Robinson recognises that the burden lies with his organisation to make SME training both relevant and effective - and through that to reduce the rate of business failures in the UK. The cessation rate is 45% after three years, he says We very much hope that improves as a result of what we're doing.