A report by The Co-operative Bank into the importance of purpose amongst the UK’s 5.7m small and medium sized businesses (SMEs), reveals 70 per cent, an estimated 3.9m SMEs, are purpose-driven businesses with a strong desire to make a difference in the lives of their customers and local communities.
The Co-operative Bank’s research shows SMEs around the country are leading the way in rooting their businesses in improving life for their customers and local communities.
- Over half of SMEs (52 per cent) said their businesses exist to make a difference to customers’ lives and to serve customers better.
- A quarter (26 per cent) said they exist to help customers save money or provide better value and 16 per cent said they have a specific social or environmental purpose.
- Almost three-quarters (72 per cent) stated they play an important role in their local area; with over a third saying they were an integral part of community life and helped to make their community a better place to live (30 per cent), in addition to creating jobs and wealth (32 per cent).
- More than a quarter (28 per cent) provide invaluable services to specific groups in need, while a fifth (23 per cent) support local charities and community projects.
With a recent report revealing that more than half (53 per cent) of consumers prefer to purchase products and services from companies that stand for a purpose that reflects their own values, the research also highlights that nine out of 10 (91 per cent) SMEs understand that having a clear sense of purpose, why they do what they do, is a vital part of business success.
|The benefits of a clear purpose to small businesses||Percentage of UK’s SMEs|
|Creates a clearer focus and strategy for the business||53 per cent|
|Makes decision making easier and keeps a business on track||49 per cent|
|Creates a more engaged workforce and a strong sense of team morale||40 per cent|
|Provides their business with a competitive edge and sets them aside from their peer group||40 per cent|
|Helps to deliver excellent service||31 per cent|
|Increases customer loyalty||31 per cent|
|Improves business performance overall||26 per cent|
Andrew Bester, CEO at the Co-operative Bank said, “Small businesses are leading the way with their clear sense of purpose, for themselves, their customers and society, and our ambition is to help support more SMEs in fulfilling theirs. Our research shows how seriously they take improving the lives of their customers and in helping communities thrive and we understand the vital role they have to play. Greater competition in the business banking market through the RBS alternative remedies fund provides a real opportunity to help power these businesses and deliver growth across regional economies.
“Our aim is to pioneer banking that makes a positive difference to small businesses and the communities they serve, particularly focused on supporting the many ethically-minded small businesses that are looking for a bank that shares their point of view about making a difference in the community.
“As the only UK bank with a customer-led Ethical Policy we have a unique position in the market and this point of difference, together with the strength of our brand and a heritage in this market, gives us the ability to become a genuine competitor to the Big five banks and to significantly increase the scale of the business for the benefit of customers. ”
The Co-operative Bank is the 7th biggest provider of business current accounts, currently looking after the banking needs of more than 85,000 SMEs, 700 co-operatives, 5,000 charities, and 279 credit unions. The bank’s application to the RBS remedies fund aims to enhance this existing capability by improving and innovating its SME banking service; by increasing the speed and access to lending that equips firms for growth; and through establishing community hubs that help local economies.
The Co-operative Bank has a unique partnership with the Federation of Small Businesses (FSB), the UK’s largest membership body and voice of SMEs. In addition, in February 2016, the Co-operative Bank and Co-operatives UK partnered to form ‘The Hive’, the first co-operative development programme of its kind in the UK, which provides new business support for people wanting to start or grow co-operative or community enterprises, using a mix of online resources, training and advice.
All three of the Bank’s core business current accounts are rated five stars by Moneyfacts.