October 30, 2009
Filed under: Small business — Alan @ 8:35 am
The FSB, Federation of Small Businesses, has petitioned the Chancellor not to hike taxes in their latest pre-budget report, amidst fears that higher taxes may lead to a greater rate of unemployment.
In the submission, the FSB points to a report performed by the Centre for Economics and Business Research (CEBR) that shows that raising taxes costs UK businesses billions of pounds, which in turn leads to businesses being forced to cut hundreds of thousands of jobs.
The hypothetical report by the CEBR shows that a simple 1p increase in employer national insurance can result in massive job losses without actually helping out public finances in a significant manner.
Additionally, the FSB is asking that corporation taxes be reduced so that small businesses are rewarded with incentives if they hire more staff.
According to the CEBR report, if the Government were to raise corporate taxes on small businesses from 21% to 26%, 100,000 jobs would be lost from SME’s, reducing the economic output of these businesses by £4.3 billion, which in turn would only help reduce the deficit of the public sector by around £1.6b over a period of ten years.
Additionally, the FSB would like to see the VAT rise delayed as well.
October 26, 2009
Filed under: Small business — Alan @ 10:26 am
The past 18 months has resulted in Manchester and North West companies reaching their highest level of confidence, even though falling sales are still one of the predominant issues facing boardrooms, according to a new quarterly business confidence survey by KPMG.
The survey questioned senior executives about whether they had seen signs of economic recovery out of which 57% answered yes, with another 48% reporting they had seen good signs, firsthand, in their own markets.
A fifth of the executives surveyed reported that they felt UK SME possibilities over the next year were ‘good’ or ‘very good; which was much higher than the ten percent who answered the same last quarter.
At the same time, the amount of executives with a negative view of the future year decreased with 24.5% answering that prospects were ‘very bad’ or ‘bad’ compared to 55% last quarter.
Additionally, only 21% of those surveyed predicted that a ‘double-dip’ scenario is possible, which means the economy will experience a period of growth, only then to sink back into a recession.
Office senior partner for the Manchester KPMG, Jonathon Hurst, said that although the statistics are encouraging, it is important to remember that opinions are still harshly divided.
October 21, 2009
Filed under: Loans — Alan @ 8:30 am
The latest Quarterly Credit Conditions Monitor by the British Retail Consortium reported that business members have been impacted severely by the withdrawal or reduction of trade credit insurance.
Most respondents additionally reported that they do not believe trade credit insurers accurately assess risk levels with 74% of SMEs responding to this claim and 92% of large retailers.
An anonymous retail company commented on its survey form that trade credit insurers need to take more time to look at a business specifically instead of simply looking at the umbrella category it falls under and stating no.
The commenter continued to say that risk assessors often simply refuse coverage because it is easier than aiding the insured company.
Currently, the BRC has called for an extension on the top scheme cover period that would stretch back to April 1, 2008, which is when insurers started to reduce the amount of businesses they covered as a result of the economic downtown.
Initially the credit insurance scheme was used in April of 2009 by the Government in an effort to allow businesses to buy credit cover with their insurance providers, and extends back from Oct. ,2008 reductions.
However, the new survey from the BRC shows that 95% of all SMEs do not feel as if this time period is long enough. And that extended the eligibility time frame will help solve problems that are currently faced by SMEs.
Additionally, many retailers also believe that the scheme should be extended past Dec. 31st when it is slated to end.
October 20, 2009
Filed under: IT — Alan @ 7:45 am
SME’s that were IT friendly were less affected by the recession than those that dismissed its value, a new report suggests in the largest study performed on the impact the current recession on SME’s.
The study took into account the effects of the recession on 7,200 SMEs throughout the UK, and was performed for the BT group by Vanson Bourne.
It showed that companies that had a positive view of IT and used the expertise of professionals were affected much less with figures of 34% compared to those who ignored IT, with figures of 69%.
Head of BT Business, Mike Hegarty, said that if IT technology is not taken into account a company was twice as likely to have more than 10% turnover when compared to those that had a positive view of technology.
According to the study, technology was able to help 30% of firms reduce costs, aid 28% in finding new clients, and help 32% of all businesses find advice and network.
It also showed that SME’s were beginning to see social networking as a means to an end while older firms that were larger in nature saw increased broadband speeds as helpful.
The London and South West areas reported the most advanced use out of IT teams, while the North East business areas were the least positive towards IT. In fact, Humberside and Yorkshire businesses did not think IT was helpful at all for their businesses.
October 16, 2009
Filed under: Loans — Alan @ 6:31 am
The RBS, or Royal Bank of Scotland, has responded to pressure from the Government to increase its SME business loans, by setting up a hotline tailored at helping small firms get approved and access to loans.
Both the RBS and fellow bank Lloyds have come under fire by the Treasury lately, for offering interest rates on loans that are so astronomical SME owners have been afraid to touch them.
The banks defended their position saying that it is hard for small firms to compete with larger companies as everyone is looking to stay out of further debt during the recession.
The Chairman of the small business department at the RBS, Peter Ibbetson, said that the new Business Hotline will be open for all small firms to utilize, even those that may not be customers of the bank.
He said that this way all businesses get a fair hearing, and small firms that feel they should be reconsidered after being passed by, can get the chance to be re-investigated.
According to Ibbetson the bank approves about 85% of all loan applications at the moment, and is always looking at ways that they could increase the lending approval figure.
October 13, 2009
Filed under: Loans — Alan @ 7:58 am
The RBS and Lloyds Banking Group are currently under investigation by the Government after allegations surfaced that the two groups may be purposely increasing loan costs to small business enterprises.
An unidentified source from the Government stated that investigators are not focused on forcing the banking institutions to make uneconomic loans, but current research shows that they may be increasing the price of credit past realistic levels.
Both banking institutions are members of the Government Asset Protection Scheme, under which they agreed that they would lend an increase of £39 billion in loans to SME’s above the previous norm.
Although both of the banks will be able to reach the target of mortgage loans by March, the banks have admitted the same target will not be achievable in terms of corporate lending.
At the same time as the investigation, SME’s have also reported an increase in anxiety when it comes to finding loans.
October 9, 2009
Filed under: Small business — Alan @ 9:51 am
Argos announced today that they will move away from Royal Mail delivery, if the unions take on a national strike until working conditions are met.
For the time being, the company has already arranged to use rival operators so that its company deliveries would not be affected.
Many other businesses both small and large have made the same move over the disruption that seems to be surrounding the Royal Mail.
In fact, 30 businesses based online, met at the Earl’s Court trade fair in London, and agreed to make the same move, many of which were small businesses.
A Post-Switch consultant from the meeting, Jonathon DeCarteret stated that a good many of the companies did not feel they could trust the Royal Mail service to ensure proper delivery to consumers. He also added that most companies that decide to use an alternate mail service do not return to Royal Mail.
It is not just small businesses that are making the move, but also many of the largest customers of Royal Mail such as charities, banks, and utilities.
Out of 250 businesses that were surveyed by the British Chamber of Commerce, 75% reported they are thinking about switching services.
Filed under: Small business — Alan @ 1:45 am
The Conservative party has initiated a new ‘Get Britain Working’ campaign that is meeting wide approval from business leaders across the UK, at least according to the Shadow Chancellor.
The campaign is aimed at giving businesses a break on national insurance on the first ten new employees that they hire, in order to encourage businesses to take on new employees. Ordinarily businesses must pay a tax of 12.8pc for each worker’s wages.
The Shadow Chancellor estimates that the campaign could lead to over 60,000 new jobs, which would drastically help lower the unemployment rate that is steadily increasing in the UK.
Deputy Director General of CBI, John Cridland stated that there are many business people who refrain from hiring an employee because of how much red tape and taxes surround the process. However, with the aid of the proposal the process needed to hire employees will become simpler, which will help entrepreneurs in the UK hire employees, and grow their businesses.
The idea is that small business owners will see Britain as a place where they can invest, and set up a business, without high start up costs, which will lead to an influx of small business, and employment opportunities.
October 2, 2009
Filed under: Small business — Alan @ 7:09 am
Britain’s small businesses are facing an uphill battle to keep their staff in the wake of Britain’s unemployment costs, that reach up to £350m, and the highest number of households without all members employed in ten years.
A new study by Close Invoice Finance surveyed 500 entrepreneurs, and found that 68% think they will be able to keep most of their employees over the next year, with only 7% worried they would have to make employees redundant.
CEO of Close Invoice Finance, David Thomson, said that even though the recession is affecting Britons, it is uplifting to see that the backbone of the British economy, small businesses, are managing to retain their employees in the face of difficulties.
At the same time, a different study by The Small Business Finance Barometer, showed that only 15.3% of all SMEs expect that their company will be able to expand over the next year.
Managing director of ANS Group Paul Sweeney said that he was able to get 12 new people on board over the last two months, and that the company is expected to recruit more in the coming months, with double the revenue, which is at least inspiring to struggling SMEs who are panicked in the face of the recession.
