Small business challenges, from late payments to business rates, hit the headlines in 2017 but what are the issues that will face the country’s small business owners for the year to come?
In December, Vonage convened and co-hosted a roundtable discussion with the Department for Business, Energy and Industrial Strategy (BEIS), convening a group of leading small business founders to highlight the ambition and potential of the UK’s thriving small businesses. Participants were united by the fact that they had all started their businesses in the home – but were now at various stages along the path to growth.
I have written previously on the potential of these businesses, which we call ‘step ups’, to drive economic growth here in the UK, and have produced a report on the enormous, untapped potential of these scaling businesses.
Critical, then, for small businesses in the next year, will be addressing barriers to growth and harnessing the exceptional opportunity posed by entrepreneurship in the UK. The lively debate at BEIS highlighted three key issues to consider in the coming year.
The future of work
All of our entrepreneurs agreed that the world of work is changing. Working from home, whether its once a week around the kitchen table or full time from a home office, is no longer a disadvantage. Technology is helping entrepreneurs to manage everything from strategy to sales from almost anywhere – and Vonage is proud to help enable this.
While there is a perception that technology may have a negative impact on jobs and livelihoods, our attendees were quick to champion the future of flexible working. For one of them, for example, a traditional franchising model is being used to enable the workforce to set its own agenda during this period of technological change.
For another, running her business from home focused her energies on creating a flexible workforce. As a result, she has embraced the self-employed and found that her business has been a gateway for experienced people to get back into the workforce.
This is not big and scary technology, it is simply enabling people to work in better, simpler ways that unlock the tremendous potential of small businesses and their workforce.
Small but mighty
A challenge that really resonated with the group of entrepreneurs was the perception that home businesses are small and insignificant.
‘Getting started was incredibly difficult. We were two women, two mums with no product, no investment, who would take us on?’ said one of our attendees. Their products are now stocked in thousands of supermarkets nationwide and much of this success is down to the early support offered by Sainsbury’s, when the founders won a pitching competition and signed a contract with the supermarket.
This was a case of a small business making the best of a big retailer, with Sainsbury’s taking a chance on what was then a fledgling business that, in the founder’s words, had ‘never sold anything to anyone in their lives’. They strongly believe, however, that big stands to gain just as much as small if they collaborate more often: ‘Home businesses and start-ups are ultimately challenger brands and larger corporates are now looking to these challengers to support their own success.’
Many entrepreneurs have had much less positive experiences with big businesses. Access to funding was cited as the biggest barrier to growth for home businesses, while many said that the only times their business had ever ‘come close to the brink’ were when clients had not paid on time.
It’s a common belief for small businesses across the country, that big businesses need to be pushed far harder to pay on time. One founder went so far as to say that the UK needs ‘a campaign to name and shame big companies that pay late’.
Hopefully, small business commissioner Paul Uppal, tasked by BEIS to address the significant challenge of late payments, will make progress on this issue in 2018.
Our ‘Heart of Home Business Britain’ report last year revealed that a third of home business owners are female. This research showed that whilst 31 per cent of male home business owners said that they would otherwise be running the business outside of the home, only 15 per cent of female business owners thought the same.
Clearly, home businesses have inspired women across the UK, unleashing an untapped entrepreneurial spirit. Technology has been central to this movement – democratising the process of setting up a business and enabling truly flexible working that has allowed work to fit around home life.
Discussions like this are always invigorating, spotlighting the resilience and determination of the UK’s small business founders. It’s clear that there are challenges ahead in the next year, but if they harness the power of technology, the nation’s entrepreneurs are more than capable of rising to them.
At Vonage, we will be continuing to spotlight the issues that matter to this community, and will work with stakeholders like the Department for Business, Energy and Industrial Strategy to help develop solutions.
Thanks to our customers and community members Sam Acton, founder of Domestic Angels; Lucy Woodhouse, founder of Claudi & Fin; Jessica Williams, founder of Sidekicks; Paul Wightman, founder of Indigo Dingo for their contribution to this discussion.
Simon Burckhardt is managing director of Vonage UK.