The last few months have seen many promises offered in the form of election manifestos, as well as much speculation over whether the UK would witness a change of government following the General Election.
However, while electioneering may have brought some excitement and interest to the newspaper front pages, for many small business owners and entrepreneurs there has been little cause for optimism – especially when it comes to the state of the economy.
Earlier this year, just before the election was announced, we carried out a survey among small business owners which painted a fairly bleak picture about the current, and future, state of both the SME sector and the wider economy. We found that over half (52%) of respondents felt ill-informed on the different political parties’ policies and their potential impact on small businesses – while many said they believed that economic growth would be unlikely for at least another year and that their own business prospects would remain equally flat.
Our research revealed that 2 in 5 respondents (39%) said they believed there will be little to no change in how the economy performs over the next 12 months, while a quarter (26%) felt the economy will perform worse than it has over the past 12 months. We also found that UK small business owners are not particularly optimistic about their own prospects, with nearly half (49%) expecting their businesses to continue to perform at their current levels for the next 12 months.
When asked about key concerns for their businesses this year, it seemed that preventative measures were front of mind with over half (53%) entrepreneurs highlighting the need to keep on top of cashflow/cashflow forecasting. Other priorities included expanding into new products or revenue streams (36%), reducing business overheads (35%), getting paid faster (26%) and investing in new technology/software (18%).
This is a scenario that our new Government will need to address if it wants to lessen their impact on the UK’s business landscape. SMEs need reassurance that there is hope for the future and that their political leaders are committed to helping small businesses – and the wider economy in general – to thrive.
During the build up to the election, we saw little in the way of policy announcements aimed at the SME sector aside from a handful of suggestions centred around business rates and National Insurance – so far more will now be needed to help the millions of small business owners who are struggling. Given small businesses – i.e. those with 50 employees or less – make up around 99% of the UK’s business population, the new Government will need to address these concerns in order to not only support the small business sector but also encourage growth in the wider economy.
We know that small businesses have a number of key priorities that they would like the new Government to focus on. In our survey, we found that over two thirds (70%) of small business owners said that they would most like to see the lowering of business taxes for freelancers and small businesses enacted by the government. Other prospective measures included a greater crackdown on tax evasion/avoidance by multinational businesses (55%), the introduction of more statutory protection for self-employed (e.g. pensions, sick leave, maternity pay) (39%) and more financial aid and/or incentives for people starting a business (33%).
I hope, therefore, that the new Government will look closely at the issues most impacting SME owners, including making tax easier and fairer, cracking down on tax avoidance, properly addressing the scourge of late payment and providing greater statutory protections for the self-employed. By doing so, we can help support our current generation of entrepreneurs, enable them to grow their businesses and, ultimately, revitalise the wider economy.
