Small business

STAKEHOLDER DEVELOPMENT
4.1 Building SME association advocacy capacity
Objective: To encourage the development of representative associations.
Private sector associations include Chambers of Commerce, industry and sector associations and local
business clubs. The importance of SME associations and the problem of adequately representing the
heterogeneous SME sector have been noted above. The strength of associations and the quality of their
staff are a major factor in the effectiveness of private/public partnership initiatives. In the interest of policy
development, governments need strong and coherent associations. 
Their establishment can be supported in different ways. They can be given public law status or remain
entirely voluntary NGO-type bodies. They may need initial support in areas such as:
• The development of a clear mission statement as an anchor for strategy and role. Such a statement
requires careful thinking – what is the association expected to take on? ‘To create and sustain a
healthy small business community’ provides for a much wider role than the statement ‘to create as
level a playing field for small business as possible at the local, regional and national level’; 
• Defining their value to its members in relationships with customers, suppliers, accountants, bankers,
regulatory authorities, workforce, unions and so on. An association working with banks may, for
example, be able to reduce the cost to the bank of lending to SMEs and through mutual guarantees
may reduce the cost to the business of complying with loan conditions. The establishment of
international networks of SMEs is another way of adding value; 
• Defining their added value to the work of other stakeholders, for example, by working alongside regulatory
authorities and/or taking responsibility for self-regulation;
• The development of their membership base.
In providing such support, it must be realised that each SME segment has different needs, determined
by the nature and markets of the business, the national or local industry service base, geographical location
and the restructuring needs of other industries (such as heavy industry) offering opportunities for SMEs.