The use of Business Mentoring by Small and Medium Sized Enterprises A Summary of Data and Policy Development 21 December 2011

Evidence has shown both the suitability and benefits of business mentoring… New and existing SMEs help drive economic growth by raising competition, stimulating innovation and were recently shown to make a disproportionate contribution to job creation Using external information, advice and guidance (for example, through a mentor) can have a major impact on improving business skills and, through this, improve business outcomes Mentoring is particularly suitable for engaging with entrepreneurs as it meets a common preference for learning to be informal, from experienced peers, and it can be tailored to the needs of their business Research and evaluations have shown that mentoring can have significant impacts including : –Positive improvements in soft skills such as business confidence and aspiration which can lead to improved business performance, including increased sales, employees, turnover and profit –Professional development of both parties, enhancing leadership and management skills and abilities of both mentor and mentee Source: NIESR (2006) ‘Business start-ups, Closures and Economic churn- a review of literature’; Anyadike-Danes et al (2011) ‘Job creation and destruction in the UK: ’; SQW Consulting (2009) A review of mentoring literature and best practice’;

…and that it may be preferred by groups under-represented in business ownership Women-led SME employers are more likely to have used a business mentor in the last year –15% of women-led SME employers had used a business mentor, compared to 11% for all SME employers Minority Ethnic Group (MEG) led SME employers are more likely to have used a business mentor in the last year –14% of MEG-led SME employers had used a business mentor, compared to 11% for all SME employers Source: SBS 2010 Women-led and MEG-led businesses boosts

Those who use mentoring are more likely to have grown and to be expecting to grow... Source: BIS analysis of the Small Business Survey 2010

…but in 2010 only around 7% of all UK SMEs had used a business mentor in the last year… …with use found to be higher amongst larger… Source: BIS analysis of the Small Business Survey 2010 …and younger SMEs

…and this equates to over 300,000 SMEs using mentors. But almost 4.2 million do not Source: BIS analysis of the Small Business Survey 2010 applied to Business Population Estimates

The Government is working with business to coordinate the mentoring network… The new mentoring web portal launched in July by the British Bankers Association (BBA), now provides a single point of access for those seeking mentoring and those seeking to be mentors across the UK. Mentorsme.co.uk provides access to over 70 mentoring organisations and around 11,000 mentors and this number continues to grow. The new Business Coaching for Growth service, which will be launched in January 2012, will also provide some mentoring as part of a tailored package of business support. A number of Regional Growth Fund projects will also include the provision of mentoring services locally. We are also working with mentoring organisations, trade and business representative bodies and other key stakeholders to raise awareness of the benefits of mentoring and stimulate the demand for mentoring amongst the SME community.

and is supporting a number of initiatives to increase the number of business mentors. Government has invested £1.9m in Get Mentoring, a new initiative to train 15,000 volunteer business mentors from the small, medium and micro business community, via the Small Firms Enterprise Development Initiative (SFEDI), in partnership with trade and business representative bodies. These volunteers will also be accessible through mentorsme.co.uk. By the end of December 2011, over 800 people had already signed up for training The BBA have already committed to have 1,000 volunteer bank mentors trained and deployed within not for profit mentoring organisations on mentorsme by the end of June By the end of November 2011, 381 bank mentors have already been trained and are mentoring over 160 small businesses We are actively engaging corporate business and are working to explore how we can mobilise the enthusiasm and expertise of leaders and experienced senior staff in corporate organisations in order to support small firms through corporate business mentoring programmes.

By December 2011, mentorsme was providing access to 11,000 mentors from 70 organisations… …and it continues to expand The last two weeks of November saw the largest increase in available organisations since launch Source: BIS analysis of mentorsme monitoring data

Since launch in July there have been more than 33,000 unique visitors… Source: BIS analysis of mentorsme monitoring data. Awareness figures from SME Finance Monitor Survey (Q3) and BIS Barometer August 2011 …and almost 250,000 page views In the last two weeks of November there were over 18,000 page views– almost 1,300 each day Awareness of site is encouraging 21% of SMEs aware of national mentoring network 11% of SME employers aware of mentorsme

Since October over 18,000 searches for mentors have been completed In the last two weeks of November around 1.5 searches were completed per visitor Also, many visitors may have found the information and help they need on the website from the additional resources on the site Source: BIS analysis of mentorsme monitoring data

Summary Businesses tell us that they prefer to receive advice and support from other experienced business people. That is why we are working with the private sector to improve access to and stimulate the demand for mentoring Our vision for business mentoring in the UK is for a vibrant, effective and sustainable mentoring network that supports both start-up and established SMEs locally, helping them to grow. This is a business-led initiative and we do not believe that it should be controlled or dictated by Government. The network will be supported and facilitated at a national level and we are working with a wide network of partners and stakeholders, including UK trade bodies, business representative bodies, private business, diversity groups, and mentoring organisations to expand and develop the business mentoring network in the UK so that potential mentors and mentees can find the right provider for their needs. We are also working with SFEDI, trade and business representative bodies, a number of mentoring organisations, the British Bankers Association (BBA) and private business to encourage more experienced business people to become volunteer mentors. We have made significant progress already in terms of expanding the network and increasing awareness of the benefits of mentoring. This early evidence is encouraging but there is still more to do if we are to reach our aspiration of 40,000 experienced business mentors. However, it is equally important that we ensure that the quality of mentoring provision is high. We have commissioned baselining research, which will be important for assessing progress and determining the growth potential of the mentoring network. We will also continue to use business surveys to monitor impacts of our approach on use by SMEs.