Over 50% of the UK's population are employed by the small business community.
Furthermore, there are so many small businesses that, if only half of them successfully took on one new employee, then concepts such as unemployment (and probably even the government budget deficit) disappear. Crime and Benefit cuts also become easier to manage. Not sure we could ever deal with the NHS, but that is a topic for another day. It is not a surprise then that the question I get asked most is: What can government do to encourage small businesses?
My stock response is: As little as possible!
This may seem flippant, but we are dealing with two completely different types of organisations. One is massive, political, where for most delivering the policy, individual success is measured in terms of career progression, pay rises and appraisals. Despite what you hear, compared to a small business, they have limitless resources and the money is not theirs. There is a natural rhythm to them which provides comfort to many. Small businesses are the exact opposite. For most the only thing that matters is whether they have sold enough to pay next months bills and collected in enough of last months work to pay this months bills. The strain can be a 24 hour 7 day a week stress which takes over family life.
So when government acts, they think in terms of political direction, annul budgets and medium term commitments. The small business community are looking for value now and preferably yesterday: Oh yes and they would rather not pay for it: And certainly not before they have the money in the bank So, for most government initiatives, to abuse a famous Hollywood line: "You lost them at hello!"
It gets more complicated still. My day job deals very much with businesses, whether they be corporate or personally owned, that are too weak to survive without massive change. It can be a tragedy for those caught in the middle, but for there to be progress and development in our economy, businesses both large and small that are not keeping up with change will inevitably get to a point where the fundamentals are just so weak that failure is the only option. Too few businesses failing in a year can be worse for our economy as too many.
But government needs to be seen to be doing something. Politicians who suggest that they either can’t effect a situation, or that the status quo is fine tend not to be re-elected. But, when you are expecting a group of people who you struggle to understand to act in a way which benefits you then you have difficulties from the start. And when you get into a more detailed debate, the answer from Government tends to be that the Small Business Community should really aim to be more like them! This has never worked and will never work!
To my mind then Government must focus on reducing the costs of doing business. Cutting bureaucracy and taxes and taking back into the public domain those elements of business life which are for the benefit of the state rather than the small business owner.
This article was published in the Croydon Advertiser on 19 November 2014 - http://bit.ly/1y4BcK9
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