Small Business Matters | A Blog for UK Small Businesses

Budget 2010: What’s in store for small businesses?

The budget date is set for Wednesday 24th and we’re all wondering what strategies Darling will have in store to reduce the growing £178bn fiscal deficit. Having experienced some of the most turbulent times on record, small business owners will be calling for the Chancellor to restore confidence in the UK economy and asking for the needs of small businesses to be taken into immediate account.

According to research conducted by YouGov and commissioned by Intuit, the driving force behind Small Business Britain, over 45% of British small business owners want banks to offer better rates for their small business customers, 35% want interest cuts to be passed on in full and 40% believe that a reduction in employers’ national insurance contributions are essential.

However, while these are the issues that matter the most to small businesses, many are questioning whether Darling will actually be able to address them with the General Election looming:

“We need a clear plan from government on spending and taxes, but this will only be clear after the election.”  (Julian Lewis, MD of Positive Computing)

This month’s budget looks set to be an interesting day, especially as the nation starts to look beyond the recession.  We’ll definitely be tuning in on budget day and reporting on the issues that concern UK small businesses, so be sure to check out the blog.

If you’re a small business owner with a view on the Budget why not get involved with our discussion at www.smallbusinessbritain.co.uk

What Small Business Britain wants from …

With our Small Business Britain Charter now live we thought you might be interested to read some of the key findings from the YouGov survey which questioned over 1,000 small business owners from around Britain.

The survey was split into three focus areas, what Government needs to do for small businesses, what banks need to do for small businesses, and what small businesses can do for themselves over the next year and beyond.

In order to avoid posting a novel, we will focus on the first two today and the third tomorrow!
… the UK Government

• 40% of respondents called for a reduction in employers’ national insurance contribution.
• 30% called for Corporation Tax deferment

The UK’s small business community are a leading contributor to the country’s employment and economy. In the run-up to the 2010 General Election, small businesses are looking to the successfully elected party to develop programmes and policies that will encourage growth in this economically difficult time.

Small businesses welcome support

Yesterday Chancellor Alistair Darling announced the pre-Budget report 2009, the results are available on the HM Treasury website. Overall the measures were positive and encouraging for small businesses. The focus was on freeing up cash and providing access to credit, which is exactly what small businesses need right now.

Below are the key outcomes that will impact small businesses.

1. The Enterprise Finance Guarantee scheme has been extended by six months to September 2010. This scheme guarantees 75% of loans to small businesses with a turnover of £25m or less, allowing start-ups to get moving while established small businesses can consider expanding and investing. So far this scheme has already supported 6,500 firms with offers of loans totalling £660m.

2. The time to pay scheme which allows small companies to spread tax payments over a longer period of time has been extended indefinitely. This scheme has been helpful for businesses trying to free up cash in the past year. 150,000 businesses have already deferred £4bn of tax in the past year as a result of the scheme and this extension now allows further small businesses to take up this opportunity and invest the available cash in new projects.

Strike set to continue

So the postal strikes are set to continue, and hopes for a trouble-free two months in the run up to Christmas don’t look promising!

The walk-outs across the country have being going on since June now, that’s nearly five months of disruption, and it is fast becoming one of the most frustrating times – especially for the smaller companies, who rely solely on Royal Mail to deliver their letters, parcels and goods to customers.

Whereas bigger players, for example Argos and Ebay, have the flexibility to sidestep Royal Mail so their customers don’t feel the effects, small businesses are left troubled by the ongoing disputes, which may have a crippling affect on trade, especially with one of the busiest periods approaching. According to a poll conducted by the Federation of Small Businesses, strikes could cost every UK small businesses up to £5,000.

It’s no surprise then, that according to a survey from the British Chambers of Commerce, 75 percent of small businesses are looking elsewhere for a more reliable service. Richard Tyler, Enterprise Editor at the Daily Telegraph is encouraging businesses to walk away and consider alternative postal providers:

“the best punishment for any organisation that abuses its position is for its customers to walk away. Complain first, yes. If they don’t change their behaviour, that’s it!”

UK economy still in recession

This morning’s unexpected news that the UK economy is still in recession is likely to weigh heavily on the minds of small business owners. According to the official figures from the Office of National Statistics (ONS) the UK economy contracted by 0.4% between July and September – a record sixth successive quarter of recession. Despite hopes that the recession was finally over, these figures indicate that the bumpy ride for small businesses owners could continue.

 
 

Small businesses owners have shown incredible grit and determination to survive this downturn. The customer research that we conducted over the summer showed that one in four small businesses put the success of their business in the recession down to their own individual efforts and that of the team they work with. Today’s news means that the struggle is by no means over.

Reliance on small businesses increases

 At all three of the party conferences, UK small businesses have been firmly on the agenda. For example, last week David Cameron spoke about the importance of entrepreneurs to society “I see a country with entrepreneurs everywhere, bringing their ideas to life – and life to our great towns and cities”. It was positive news for small businesses of Britain!

Small business owners can start to hope for extra support to grow their businesses. This benefits everyone, as start-ups create employment, support the local community and bring strength to the economy as a whole. As we slowly come out of last year’s global financial crisis, the priority for next year is to get Britain working. 

Small businesses and start-ups have always played a role in this, but now more than ever society is heavily relying on small businesses to create jobs. There are also plans to temporarily freeze the National Insurance of start-ups and there is recent research by Culture map to prove how small businesses are considered the most recession resilient sector of the UK.

What this means for small business owners is that increased support is to be expected, the sector may be set to grow and competition is likely to rise. The opportunities are there for those who are willing to take them.