SMEs fail to realise business value of community relations - Business Works
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SMEs fail to realise business value of community relations

John Minhinick, President, Rotary International Small and medium sized businesses in the UK are missing a trick when it comes to supporting their local community, according to a new report released by Rotary International in Great Britain and Ireland (RIBI). Results reveal that almost half (47%) of SMEs do not support their local community, despite the fact that most recognise that community relations increases staff morale (65%) and makes their business more attractive to potential customers (70%) and employees (58%).

  • Almost half (47%) of SMEs do not support the local community in any way;
  • Consumers (59%) are more likely to buy from a local business that supports organisations in their area; and
  • Most SMEs (65%) agree community involvement increases staff morale.

The RIBI 'Community Matters' report, which surveyed more than 500 senior managers in small- and medium-sized businesses (SMEs) and 1700 members of the general public, also found that companies are failing to understand the business opportunities that local community engagement can present. More than a third (35%) think 'giving back' is the main benefit, with just one in ten (11%) spotting the opportunity for business development.

John Minhinick, RIBI President, said, "With more than half (59%) of consumers more likely to buy from a local business that supports local organisations, businesses have a real opportunity to benefit from their community support."

"While 'giving back' is an important element, businesses are missing out on the other commercial benefits such as raising brand awareness, meeting new contacts and employee development. Choosing a route that makes business sense will result in a stronger and more long-term commitment to the chosen cause, thereby benefitting all those involved."

The research also identifies an emerging 'community gap' with small businesses becoming more involved in their local community once they hit a certain size, decreasing again when they get too big. Only 31% of self-employed business owners are involved with the local community, compared to 82% of businesses with 50-99 employees. However, this dips again as the company size increases further, with 74% of businesses with 100-249 employees involved with their local community.

John explains, "Once a company reaches the 100+ employees mark, it is more likely to look for national business development opportunities. Indeed, almost a third (30%) of large companies (100+ employees) said that while they believed that engagement with the community used to have an effect on business success, this was no longer the case."

"Companies of this size are therefore becoming disconnected with the community and 13% admitted that the main barrier between getting more involved was a lack of awareness as to what local charities and organisations even existed."

While almost half of SMEs do not support the community in any way, 52% of respondents think their company could do more, citing lack of money and time as the main barriers (64% and 42% respectively).

More than two thirds (70%) of respondents also believe they would feel differently about their company if it was involved with the local community, with a quarter (27%) saying it would make them feel more motivated at work and one in seven (14%) stating they would be keen to get involved themselves with any projects the company was supporting.

"Rotary provides a link between businesses and the community, enabling companies of all sizes and functions to get involved in local projects while ensuring they maximise the opportunities such engagement brings," adds John. "If businesses have a better understanding of how they can make their community support work for them on a commercial basis, then any money outlaid on a particular cause can be justified and will result in a more planned, strategic and beneficial commitment."

The research also showed that the public believes businesses should be responsible for filling funding gaps left by the government and other third parties post-recession. The business response post-recession has been positive, with almost a fifth (17%) increasing their community support and just 10% making cuts.

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