Dragons’ Den James Caan says more must be done to encourage the next generation of entrepreneurs: ‘More and more young people want to get into business and I think the education system in this country should reflect the needs of students. Schools and universities should be more actively participating so students can get a better grounding when they enter the world of business.’
Reduce the deficit
Securing the UK’s reputation as a good place to do business will mean bringing Britain’s finances under tighter control. Alex White, partner at BDO, says: ‘The government will need a clear strategy for tackling the deficit. If it’s perceived by the markets to have a “policy paralysis” the cost of borrowing may increase.’
Make employment easier
‘The hike in national insurance is just nonsense and should be scrapped as it’s a tax on jobs,’ says Mark Olbrich, owner of sandwich shop Salade.
Matt Goodman, policy director at the Forum of Private Businesses (FPB), says employment law compliance is also putting too much pressure on small businesses: ‘It’s currently weighted in favour of employees, with many SMEs now spending a lot of time and money over-complying because they are worried about tribunals. The system needs to be simplified.’
Tackle late payment
It’s time to get tough on late payment. One solution would be the introduction of late payment legislation similar to that of Sweden and Denmark, where debtors are legally obliged to pay interest on overdue sums at a rate set by the government and fixed to be significantly higher than the bank rate.
Improve availability of finance
Access to funding has become extremely difficult for many SMEs, with bank lending to businesses hitting an all-time low due to the high cost of borrowing. ‘The government needs to start telling the banks to lend more money. At the moment it feels like there’s no support out there,’ says Alex Ciangola owner of four hairdressing salons in London.
The problem could be resolved through more competition in the marketplace, with the establishment of a Post Bank and better use of state-held banks to ensure fairer borrowing, claims the Forum of Small Businesses.
Victoria Dixon, owner of photography company Enhance Me, says businesses starting out need more support. ‘Some financial backing would be useful as you’re running everything on a shoestring at the beginning. And offering a couple of hours’ free childcare a week would be really helpful for a lot of female business owners.’
Jorg Radeke, economist at the Centre for Economics Business and Research, wants to see more government-backed loans under the Enterprise Finance Guarantee and an extension of Time to Pay tax deferral scheme under the next government. ‘Although Time to Pay might be seen as delaying pain later down the line, it’s helped a lot of SMEs with temporary cash flow problems. In the opinion of many economists, it’s been seen as a success.’
Slashing red tape in the tax system needs to be a priority for the next government, says Salade’s Olbrich. ‘All tax rates should be set at a flat level, that way we wouldn’t have to use an accountant.’
Clive Lewis, head of SME issues at the Institute of Chartered Accountants in England and Wales, agrees that the system needs to be simplified. ‘It has got progressively more complicated over the last ten years. If we had a more simple system, then small business could save money by filing their own tax returns.’
Encouraging new sectors
The FPB’s Goodman says ambitious companies looking to enter new markets need a bette ecosystem for long-term development. ‘As new technologies emerge and new markets open, SMEs should have equal opportunities [to access them]. We need more awareness about what is offered to businesses through UK Trade and Investment. Companies in the manufacturing and green technology sectors should also receive more financial support.’
Public sector contracts
Small businesses ought to get a larger slice of public sector contracts, says Adam Marshall, policy director at the British Chambers of Commerce. ‘The next government needs to follow through on its commitments. At the moment small businesses aren’t getting a look in, partly because of all the paper work involved.’