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Champion small business – the vital engine of the UK economy!

Champion small business – the vital engine of the UK economy!

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Guest blog from Howard Graham, CEO and Founder of The Made Simple Group and member of the BBC’s Small Business Panel of Experts. All opinions stated are the author’s own.

 

During the forthcoming election campaign, there will be many promises made by politicians of all hues to help UK businesses grow and prosper during the current economic downturn.

Yet, the focus will not be on small businesses who, despite their diminutive size, employ many millions of people up and down the country. Instead, they will be concentrating on the large firms and multinationals who employ a tiny fraction of the country’s workforce.

So I am going to put together my own manifesto which will champion the cause of small business owners and, in so doing, aid the economic recovery.

Simply put, small businesses are the life-blood of the UK economy.  Official data from the Office of National Statistics shows clearly that sole proprietors, partnerships and small companies represent the bulk of UK business entities.

In the ONS September 2009 employment survey, it was revealed that 88.7% of businesses had less than 10 employees and 98% had less than 15. Large enterprises - those with 250 or greater employees - represented just 0.4% of all businesses

Furthermore, anecdotal evidence suggests that changes in the employment landscape over the last 20 years have seen more and more people working from home, providing their services to larger organisations as consultants. And this only looks set to continue as the effects of the recession take further hold and redundancies increase.

However there is a total lack of understanding about what actually constitutes a small business with some official definitions categorising them as having as many as 250 employees.

But, this doesn’t really take full account of the true nature of the many small businesses that have less than ten employees, a concept perhaps better understood by the European Community who recently published directives on the concept of the micro-entity.

This lack of understanding of how small businesses operate is even highlighted at ministerial level.  Both the previous and current incumbents as Small Business Minister, Baroness Vadera and the current minister Lord Davis of Abersoch, both have literally no experience working with, or within, small business. 

And even the role in the Government itself suggests a lack of emphasis on the position of Small Business Minister.  In fact, the official title is Minister of State for Trade, Investment and Small Business.

There seems to be a similar lack of understanding on the Conservative side too.  Leader of the Opposition David Cameron recently appeared on the BBC’s Andrew Marr Show stating that he aims to help small business by removing bureaucracy and in particular making it easier for small companies to start in business. 

He then went on to say that it currently takes 14 days to get a new company started.  The truth of the matter is that a new company can be formed within three hours so he has clearly been misinformed.

Not content with misunderstanding what defines a small business and what their needs are, the Government is also intent on throwing a number of obstacles into their path.

In recent years, there has been a raft of legislation affecting businesses, from health and safety to employment, tax, environmental, data protection and money laundering.

However none of these take into account a small business’s lack of resources to implement and comply with them. While larger entities can spread the load, the small business is often overwhelmed by these compliance issues. 

To counteract this unfair bias against the thousands of SMEs in this country, I am going to launch the ‘Made Simple Small Business Manifesto’ which has three main policies:

  • More effective representation in government. Quite simply we need a bona fide Small Business Minister who can look after the needs of small businesses.
  • We need to have people in government representing small business who understand small business i.e. have run them themselves.
  • Legislation affecting businesses needs to be more selectively implemented - the implementation and application of legislation needs to be more tailored towards SMEs – it makes no sense at all that a small high street shop employing 1 or 2 people has to comply in the same way as a large multinational. 

I want the political leaders in this country to sit up and take proper notice of how vital and significant small businesses are to the UK economy.  They aren’t an afterthought – after all they are the majority – the true enterprise leaders.  And instead of paying lip-service to their needs, I want whichever party is returned on May 6th to listen to my policies and put small business at the heart of Government.

To paraphrase John F. Kennedy, the question I have for the next Administration is: “Ask not what small business can do for you - ask what you can do for small businesses.”

Join the Made Simple Small Business Manifesto here

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