Business News
Small businesses come to the rescue in 2011
While all else was crumbling, 2011 is likely to be remembered as the year that SMEs laid the groundwork for the UK’s economic recovery, rising like a phoenix from the ashes despite harsh trading conditions, restricted access to credit and a number of counterproductive legislative moves by the government, believes entrepreneur and business start-up consultant, Darren Fell.
In comparison to 2.65 million the year before, Companies House listed 2.8 million companies on their register for November 2011. In November alone, 39.168 new companies were registered – a substantial rise from the 33,457 registered in November 2010. Meanwhile, the amount of companies entering receivership or liquidation fell from 13,607 to 12,273, which is encouraging news.
Although the scaremongers are warning us about the European debt crisis, the reality is that the UK seems to be ready for business – it is only the banks and the government that seem intent on holding it back.
Regulations
A study carried out in the middle of last year by the Forum of Private Business discovered that although the government has pledged to cut red tape for small businesses, bureaucracy is actually increasing, with 84% of respondents stating that the firms’ spending on compliance activity had risen.
This regulatory burden increased further last October when the Agency Workers Regulations was introduced; the government believes that these new regulations will cost UK firms more than £1.5bn to monitor and police. Plus, George Osborne made a major faux pas with the country’s contractor community when he scrapped the IR35 in March 2011 and completely dropped the ball.
2011 was also the year the banks slammed their purses shut. Access to credit is essential for any small business – we all know that poor cash flow can be a killer – but, perhaps unsurprisingly, given how the UK got into our current predicament, the banks were hesitant to allow anyone to borrow. The government’s Project Merlin simply couldn’t deliver what was needed and numerous small businesses were left without vital capital and up the proverbial creek.
Small businesses to the rescue
Despite all of these hardships, challenges and restrictions, the majority of the country’s SME’s continue to grow – or at the very least, hold steady. The public and private sector’s mass redundancies in the past 18 months have pushed up unemployment and forced former employees to become owners and employers themselves. In fact, in November, the Professional Contractors Group reported that the amount of UK freelancers has increase by approximately 200,000 in only two years!
Something that the government did manage to get right last year was to plough heavy investment into the tech start-up community – particularly in the capital’s Silicon Roundabout area. It does depend on who you speak to but the amount of tech start-ups in the London area has done anything, from double to increase tenfold in the last few years, which is the kind of news we are looking for – exactly the kind of high-growth, profitable businesses that can aid and ably lead the country’s economic recovery.
Looking to the future
So what is set for 2012? Of course, we have the Olympics to look forward to but for the first half of the year, we’re likely to experience the doom and gloom of the previous six months. For some entrepreneurs clever enough to navigate their way around the trademark minefield that is the IOC, there are profits to be made.
Apart from the looming spectre of the Olympics, small businesses and individuals are more than likely to feel the pinch and will have to make a decision – get smart about money and business or suffer the consequences. For this to happen, we must adopt cheaper and more efficient services, such as utilising the internet for both advertising and buying.
However, the biggest challenge for all business owners in 2012 will be to respond quickly to demand, making it clear to consumers (whether B2B or B2C) that cutting costs doesn’t always mean sacrificing quality and service.
