Criminal Activity:SMEs – why size matters

Martin Wootton, Research Director

Meet some of the suspects…

“The research identifies that only 37 per cent of staff in small businesses have above

average IT skills”

UK Federation of Small Businesses, Digital Imperative Survey, published 2013

http://www.fsb.org.uk/frontpage/assets/fsb-intellect-april13.pdf

“A third of SMEs think their turnover will increase in the next 12 months, with another

third thinking it will stay the same, and 31 per cent thinking it will decrease”

2009 Survey of SMEs UK Department of Business, Innovation and Skills

http://www.bis.gov.uk/assets/biscore/enterprise/docs/10-636-2009-finance-survey-smes-results

“A survey of 750 UK SMEs found that the main reason holding businesses back is

perceived cost, with 90% of respondents indicating that international expansion is too

expensive”

Baker Tilly survey of UK SMEs, published 2014

http://www.bakertilly.co.uk/media/news/pages/SMEs-reluctant-to-expand-internationally-says-survey.aspx

What do these all have in common?

SMEs

How to define SMEs?

AUSTRALIA US EU

Minute/Micro 1-2 1-6 <10

Small <15 <250 <50

Medium <200 <500 <250

Source: http://en.wikipedia.org/wiki/Small_business#Size_definitions

Q. Why are SMEs important?

A. Because they account for the large majority of all businesses

In the US, small business (<500 employees) accounts for more than half of private sector GDP

and around half of private sector employment

Enterprise EmploymentHome Office Self employed 1-9 10 - 49 50-99 100-249 250-499 500+ Total

Agriculture 18,620 170,661 103,855 24,970 4,053 26,498 21,330 1,298 475,140Mining and quarrying - 5,140 2,836 3,068 1,920 26,398 28,966 16,435 87,599Manufacturing 57,737 164,953 360,897 494,440 237,258 322,874 266,774 1,189,396 3,455,226Electricity, gas and water supply - 3,064 5,197 5,622 3,518 30,741 46,596 61,129 161,064Construction 41,741 774,292 686,841 364,004 86,591 90,404 62,783 350,552 3,144,049Wholesale and retail trade 84,341 350,857 1,073,898 587,289 155,444 165,942 122,519 2,128,971 5,743,159Hotels and restaurants 54,729 58,939 382,806 187,472 48,867 46,034 29,739 483,777 1,675,169Transport, storage and communication 18,849 222,521 209,364 165,703 56,705 71,851 64,884 1,137,637 2,156,878Financial intermediation 28,222 29,996 73,559 56,774 22,952 36,049 33,402 905,088 1,259,601Real estate, renting and business activities 165,088 499,124 933,234 474,118 155,289 175,742 131,806 812,021 4,279,656Public admin and defence - - 4,139 4,033 2,809 11,570 36,109 2,119,518 2,182,317Education 92,219 - 428,970 521,993 298,508 407,841 265,530 995,093 3,439,124Health and social work 41,849 191,614 357,534 692,421 172,374 108,991 62,124 2,309,628 4,294,069Other community, social activities 32,086 328,190 536,931 223,330 60,774 71,417 52,287 416,034 2,257,980Personal Services 41,882 21,870 79,213 12,859 3,999 - - - 239,036Total 677,363 2,821,221 5,239,274 3,818,096 1,311,061 1,592,352 1,224,849 12,926,577 34,850,067

8.7M 3.8M 2.9M

The consequences of poor SME research

• Loss of trust• Loss of face• Loss of clients

For both agencies and clients

Advice for crime prevention

1. Make sure your clients know the importance of their smaller customers – especially if they don’t believe they are important.

2. Make your clients aware that you can’t treat all smaller businesses as one group.

Alternatives to SMEs

Select a specific sector or vertical market

Add a behavioural classification to that sector or market

Managed vs. unmanaged IT

Banking or pension arrangements

Recent spend on specific services

Number of Directors

Tips for best practice

DON’T GENERALISE – the ONLY accurate classifications and meaningful findings are sector-specific

Number of employees can be really misleading – AVOID if possible

Be creative with sub-classification

Don’t ignore home workers, franchises, and serviced offices!

Think about WHY you want to survey SMEs as a whole

(classified as both a small and a mid-sized business by the EU!)

Thank you, (and don’t have nightmares)