Nurturing Local Businesses: A Guide for Local Authorities

In the heartbeat of every community lies the vitality of its local businesses. These enterprises not only contribute to the prosperity of their owners but also play a crucial role in the overall prosperity & well-being of the entire community – contributing to jobs, economic output, services & far more. Local authorities, as stewards of the community, have an important responsibility to foster an environment where businesses can not only survive but thrive.

The Federation of Small Businesses put together some key statistics about the SME local business community for 2023, taken from Department for Business & Trade statistics:

  • At the start of 2023 there were 5.5 million small businesses (with 0 to 49 employees), 99.2% of the total business population. SMEs account for 99.9% of the business population (5.6 million businesses).
  • SMEs account for three-fifths of the employment and around half of turnover in the UK private sector.
  • Total employment in SMEs was 16.7 million (61% of the total), whilst turnover was estimated at £2.4 trillion (53%).
  • Employment in small businesses (with 0 to 49 employees) was 13.1 million (48% of the total), with a turnover of £1.6 trillion (36%)

The above numbers highlight the huge importance of SME local businesses within the UK. It is important for organisations supporting economic and social development, like Local Authorities, to consider how they ‘bake-in’ the right business support models into their strategy and delivery plans. It is vital that support addresses current needs for businesses whilst anticipating upcoming challenges on the horizon such as technological revolutions, environmental events, and generational issues – such as the climate emergency. 

Local Authority & City representatives from Tartu (Estonia) and Gavle (Sweden) at BEC’s offices in Birmingham (UK) on a trip to discover best practice and ideas on supporting businesses & innovation with presentations from BEC & Innovation Alliance for the West Midlands.

Understanding Local Business Needs

Local businesses are the lifeblood of a community, each with its unique set of challenges and aspirations. It’s essential for local authorities to immerse themselves in the diverse landscape of these businesses, from the local bakery navigating food regulations to the tech startup seeking venture capital. Recognising and understanding these varied needs across the spectrum of businesses within the ecosystem is the first crucial step toward providing meaningful support.

Whether it’s the need for accessible funding, assistance with navigating complex regulatory environments, or support in developing digital infrastructure, a holistic approach that tailors solutions to individual businesses is paramount. Local authorities can conduct surveys, host town hall meetings, or establish advisory boards to facilitate direct communication with businesses and gain deeper insights into their challenges. It’s important that these activities don’t just become ‘talking shops’ but have pathways to create actions and change. 

It is critical also that those involved understand that these needs are dynamic and are always changing. Support that worked in the past may no longer be fit for purpose so organisations must constantly review and reshape their support & interventions. 

Building a Supportive Ecosystem

A thriving local business community doesn’t exist in isolation but rather within a supportive ecosystem that the local authority must play a part in developing. Infrastructure investment, intervention investment, physical space, events, policy, and marketing initiatives can create an environment where businesses not only exist but can find the opportunities they need to thrive. 

Networking opportunities are the lifeblood of many small businesses – meeting who they need to meet. Local authorities can facilitate networking events, business mixers, or industry-specific meet-ups to encourage collaboration and knowledge sharing. In doing so, they contribute to a supportive ecosystem where businesses can connect, share resources, and collectively contribute to the economic health of the community.

It is important for local authorities to consider how they can act as the glue to bring the various elements together. Often as an ecosystem grows pockets and silos develop, making it difficult for businesses to navigate through the relevant elements of the ecosystem. Local Authorities must consider the physical and digital aspects of supporting businesses to navigate the ecosystem and understand the support offer.

Understanding Clusters & Priority Sectors

No Local Authority has an unlimited budget when it comes to business support funding. Therefore, value for money and generating the most amount of return possible is critical. This is tough if you are trying to be all things to all businesses so it is important to consider what sectors are a regional priority in order to direct funding into key areas for development. 

Additionally, this is where sector clusters become strategically important in order to:

  • Provide a gateway or focus for investment & support
  • Attract & retain the attention of relevant businesses to increase engagement
  • Attract private sector investment including FDI
  • Provide feedback mechanisms 
  • Generate network effects 
  • Supply chain opportunities for local businesses 
  • Sectorial defragmentation 

Generally, clusters that run well are able to generate a lot of ‘money can’t buy’ intangible benefits and opportunities that follow on from the development of the cluster. Here is some further reading about clusters from an insightful blog put together by City REDI at the University of Birmingham. 

Tailoring Services to Business Requirements 

Recognizing that one size does not fit all, local authorities must tailor their support services to match the unique requirements of businesses within their jurisdiction. This involves a detailed understanding of the industries present, the specific challenges they face, and the stage of development each business is in.

For example, a start-up may require mentorship programs and access to co-working spaces, while an established small business might benefit more from assistance in navigating government contracts. By providing targeted assistance, local authorities can significantly enhance the impact of their support programs, leading to tangible and sustainable outcomes for the businesses they serve.

Generalised vs Specialised 

As has been mentioned, your business community is filled with different businesses with different needs. Therefore, it is important to consider the mix of business support offerings you have available. These could be generalised pieces of support i.e. those that cover business essentials that all types of business need to know and understand. Alongside this it is important to consider specialised pieces of support. These specialised pieces of support could be sector specific (perhaps a programme focusing on creative businesses) or stage specific (for example a programme of support for businesses raising equity investment for the first time). Specialised support offers can be developed hand in hand with sector clusters to create interventions that are fit for purpose and engaging for those in the cluster.

Collaborating with Business Support Organisations

Local authorities don’t have to go it alone. Collaboration is a powerful tool, and partnering with business support organisations can amplify the impact of local business support efforts. Business support organisations often bring specialised expertise, resources, and a network of connections that can complement the efforts of local authorities.

In fact there are many business support organisations set up with a focus on supporting regional business development. We see this across the National Enterprise Network (NEN) – an organisation that BEC is a proud member of. The membership have helped to create over 26,000 businesses and have supported over 93,000 businesses in total. 

Real-world case studies highlight the success stories that can emerge from such collaborations. From joint workshops and training sessions to co-hosted events, the synergy between local authorities and business support organisations can lead to innovative solutions and a more robust support framework for local businesses.

BEC as a Delivery Partner
As an organisation, we have developed key strengths that make us an impactful delivery partner for a range of organisations looking to provide business support including both local and national government. We take a community led co-design approach which means we start with understanding the real needs of the businesses being supported and look at how a programme can be designed that delivers relevant and impactful support to those participating whilst addressing the desired outcome of the commissioning organisation. Our support includes programme design, delivery and evaluation. 

Green Landing was a joint project between the Department for International Trade, the British Embassy in Santiago and ProChile which looked to leverage the opportunity COP26 was giving to sustainable companies to come to the UK. It was a challenging project due several reasons. Therefore I was on the search for not only a good partner in the UK in terms of quality assurance but also with the flexibility to pivot plans in case of contingencies. After some conversations, BEC emerged as the perfect match for this project. They have a highly professional, empathic and results given team with the availability to successfully overcome any last minute obstacle.”

– Jorge Castro, Trade Manager at ProChile (Part of the Chilean Government’s Ministry of Foreign Affairs)

Checkout our Impact Page for examples of projects that we’ve run on behalf of local authorities, national government departments, universities and other institutions – utilising our expertise to deliver on important priorities and desired outcomes for those organisations. 
BEC x ProChile x Latam Scaleups Event as part of Birmingham Tech Week 2023 to help support UK businesses to explore opportunities in the Latin American Markets.

Accessibility to Resources

Financial assistance and resources are often critical to the growth of local businesses. Local authorities can play a crucial role in connecting businesses with grants, funding programs, and other resources available at the local, regional, and national levels. Simplifying application processes and providing guidance on eligibility criteria ensure that businesses can easily access the support they need.

Furthermore, local authorities can work proactively to identify gaps in available resources and advocate for additional support where needed. This might involve collaborating with regional economic development agencies, engaging with financial institutions, or even exploring public-private partnerships to bolster available resources for local businesses.

Communication and Feedback Mechanisms

Open lines of communication between local authorities and businesses are the backbone of effective support. Establishing feedback mechanisms allows authorities to continually refine and improve their support services. Regular check-ins, surveys, and community forums create a space for businesses to voice their needs, concerns, and suggestions. Again, this has to have meaningful pathways to do something about the feedback shared – it cannot just be a tick box. 

This iterative process ensures that the support offered remains relevant and impactful. Local authorities can demonstrate responsiveness by actively addressing feedback, updating support programs based on evolving business needs, and communicating transparently about the outcomes of collective efforts.

As we collectively strive for thriving local economies, let us foster an environment where businesses can not only survive but grow, innovate, and contribute to the vibrancy of our communities – job creation, economic growth, social impact, and delivery of products & services that people need. 

What Next?

We invite local authorities to take a proactive role in fostering local business growth. Share your success stories in supporting local businesses, and let us work together towards a future of economic prosperity for our communities. Reach out for further collaboration, as together, we can create a resilient and thriving local business landscape.

Get in touch with BEC Chief Executive Daniel Evans –

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