Business Enterprise Centres grapple with a shifting SME landscape

If you are savvy, or lucky, you will have a number of high-quality mentors to lean upon.

These grizzled business veterans will be on call for a cup of coffee, or something stronger, to discuss everything from the grand vision to the fine detail of running a start-up.

Budding entrepreneurs without their own pool of mentors to call upon often end up turning to government-funded services to get the tutorage they require.

This advice is spearheaded by the Small Business Advice Service, which was launched in 2008.

The service provides the tools for providers – most notably Business Enterprise Centres – to dispense face-to-face help and advice to small businesses. There is also Small Business Support Line, which entrepreneurs can call with almost any business-related query.

In the recent federal budget, the Federal Government made a big play of its support for these services. SBAS, which was due to expire on June 30 this year, will get another $27.5 million over the next four years, while the Small Business Support Line will be extended to 2015-16.

But beneath the headline figures, there is a frontline advice service having to revamp itself to deal with altered circumstances.

It understandably didn’t mention it at budget time, but Labor pledged $42 million for SBAS in 2008, meaning that the program’s funding has been nearly sliced in half.

On top of this, only 37 of Australia’s 95 not-for-profit BECs receive federal funding, leaving the others to rely on state government handouts or run on a shoestring via a hotchpotch of fees from small business members.

So how are BECs realigning themselves to deal with this funding cut, as well as the changing demands of its SME customer base? Are the services run by BECs still relevant, or even well-known enough, among innovative Aussie start-ups?

The BEC reaction to the funding cut – as well as a tender process to retain the funding for its network – has been pragmatic.

“Admittedly, it will be painful bearing a cut in funding from $40 million over four years down to $27.5 million but, to be frank, with all the pressures on the budget there was a real likelihood of getting zero,” said Jack Hughes, chairman of Business Enterprise Centres Australia, in a statement.

“The remaining challenge now is ensuring the government can run the tender process quickly enough so that funding is available by July 1 to ensure continuity.”

“It would be counterproductive if a gap of weeks or months meant the existing network lost funding temporarily and suffered the loss of premises and experienced personnel who are so crucial to SBAS success.”

Jackie Zelinsky, CEO of the BEC network, tells StartupSmart the funding cut won’t harm the services available to small businesses.

“When you look at the funding of a small business commissioner and help for sole traders that was in the budget, the amount of money is in the same ballpark as the original funding,” she points out.

“We were pushing for a small business commissioner, so you can’t complain when the government sits up and takes notice of you.”

“I think the tender process is appropriate too – we welcome a competitive bid and although we cover 85% of Australia there are areas of Western Australia, for example, that aren’t very well covered and we would happily work with Chambers of Commerce to reach these people.”