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What problems do small firms face?

09:13 UK time, Monday, 1 November 2010

David Cameron has appointed a new enterprise tsar with a brief to cut red tape for small businesses. Will this appointment help firms?

Downing Street says the Conservative peer Lord Young will carry out a "brutally honest" review of strategies designed to encourage new start-ups.

Mr Cameron said he wanted "nothing less than a wholesale change in attitude" from government towards small business.

With significant cuts planned for the public sector and up to 500,000 jobs set to be lost, the government is hoping the private sector will expand and create new employment.

Do you run a small business? What barriers to growth are faced by firms? Is bureaucracy an issue? How can the government encourage new start-ups?

This debate is now closed. Thank you for your comments.

Comments

Page 1 of 3

  • Comment number 1.

    The barriers to small business are always the same. It's not red tape, that is just a bit frustrating, it's having an opportunity, having the cash, and having elbow room. The biggest problem is having some common sense. There are a great many people out there just looking to suck your redundancy money out of you with a very painful needle. To be cynical, one could suggest the whole scheme is just a way for large firms to get the lump sum back from the unemployed. Too many people invest in a business that has already failed many times; such as shops, restaurants and pubs.
    Then there is the problem of getting paid, and the leap from a one man band to employing people and getting contracts. For too many people small business is a process of exploiting yourself, rather than being exploited by a boss.

    Anyway, small business is not what the UK needs. All that most of them do is services for increasingly scarce wealth producers, like factory workers. Dave should be asking why we have not got big business that employs thousands.
    I need a window cleaner. Good luck to anyone who has a go.

  • Comment number 2.

    I run a small business. I waste a lot of time dealing with government red tape, from both national and local government.

    I'm not saying that the government are the only problem, but they are a big part of it.

    Let me give just one tiny example: the P11D. This is a form that we are required to fill in for all employees for any expenses they receive, such as when the company pays for them to join professional associations. The government has weird and inconsistent rules about whether such things are tax deductible, as a result of which some of my employees get a tax liability for those subscriptions, and some don't. For all of them, it is by any reasonable definition a totally legitimate business expense and not in anyway a personal perk (unlike, say, a duck house). I end up spending a lot of time figuring out what is what, and also have to pay my accountant to help with the tricky bits.

    That is just one example. Government loves this sort of stuff. I am sure that many other small business owners will post similar stories here. All this rhetoric about cutting red tape and helping small businesses is all fine and dandy, but until it's matched by action, forgive me if I don't get too excited.

  • Comment number 3.

    What barriers to growth do small firms face?

    Well, - whilst a reduction in red tape is always welcome (to everyone not just businesses) I think we have to look elsewhere for the major impediment to growth (and also to business start-ups).

    And that, of course is the banks and their refusal to lend money to SMEs. We own huge portions of these banks and, given this, one would think that the government could force them into changing their attitude.

  • Comment number 4.

    What problems do small firms face?

    Very, very big firms that don't want to see anybody else in business.

    Can anybody name any retail item, for example, that isn't sold by the Giant Supermarket Cartel?

    The only place left for small businesses is in the service sector and even then its only a matter of time before they get wiped out by larger organisations who won't put up with any competition.

    C'est la Vie...

  • Comment number 5.

    IR35. Those caught by this are being asked to pay both Employees NI and Employer's NI (which is an additional 13% throughout their income). Imagine if someone asked you to pay 24% NI - and 14% on any income in the higher rate bands.

    Even those who are not caught have to spend vast amounts of time understanding the legislation, which is highly subjective and based on a set of tests that are also subjective and IMO highly inappropriate. And then they have to pay professional advisers to review their contracts and often turn work down if they don't like the result of the review.

    A despicable piece of legislation that seriously hampers the flexible freelance sector of our economy at a time when they are most needed.

  • Comment number 6.

    Cut the rates that are charged to businesses. They are far too expensive and have almost trebled in Wolverhampton in the last 11 years.
    We pay two and a half grand for an office that houses five people (snugly).

  • Comment number 7.

    Red tape is a minor annoyance but it's not the real reason that small firms struggle. The one huge reason is that virtually every major Government contract is stitched up and they invariably go to "the usual suspects". No matter how many times these companies fail dismally they are still absolutely assured of the next contract when the oak panneled office negotiations take place. It is certainly very obvious in my line of business (IT). Numerous times each year I see the large IT companies getting Government contracts which we could undertake for fraction of the quoted price. I see local councils outsourcing at a cost higher than when the job was done in house and then we just sit back and wait, maybe a year, maybe 2 or 3 years until the story breaks about what an utter cobblers these companies make of the job.
    The same seems to apply in larger companies too. No vision, no willingness to take a chance with smaller providers and they just keep on and on handing out cash to the same muppets. I really don't mind much when it's private companies spending good money after bad with the same useless suppliers but I do object when it's public money.

  • Comment number 8.

    taking all bets on how long it takes before somebody blames thatcher? or something totally unrelated!

    and the problem small business's face?
    hmm im going to take a wild stab at the recession?

    nobody getting pay rise's however cost of living shooting through the roof? petrol at 121p a litre? people will sacrifise everything else for the car as usuallly no car = no job.
    and on top of that vat up to 20%

    all that equals small firms making no or no enough profit so how can they employ the 2million people without jobs?

    can anybody else see things geting alot worse before they get better? relying on the private sector where are there interested in is profit well hiring more people when your making less money just isnt going to happen

  • Comment number 9.

    "What problems do small firms and start up business face"?

    Recommend post #04 @ 11:32am on 01 November - 'Alciibiados' (?).

    The tsunami of supermarkets' power over farmers and independent service in all areas is destroying any opportunity for small or independent business. But the government know this already.

    In addition, these huge supermarkets have free parking - yet local authorities slam shoppers, small business, empoyees with high parking charges and huge business rates. Once again, Government know this to be unfair and a block to competition.

    New business start-ups in the UK, unless online, are being stifled and robbed by local authority business rates.

  • Comment number 10.

    Its all so much hot air that government put out about "wanting more business start ups".How about government getting out of the way of small business and giving encouragement in the way of less business rates,less tax to pay for a couple of years,less red tape-keep the local authorities out of business because petty minded idiots are needed like a hole in the head( its the biggest obstacle to any business setting up and actually EMPLOYING help which in turn helps create even more jobs and takes a considerable burden off the tax payer).Lastly,interest free loans for any new business which starts and employs at least three people within 6 months.If you had to wade through the paperwork created by civil servants(government as well as the hated local ones) hell bent on STOPPING any business before it starts you just would not even bother.Any recovery will come from the small businesses not the multi global companies who couldnt give a monkeys where they operate from as long as their shareholders get dividends.Government need to repeal much of stupid destructive legislation which prevents business from starting or even surviving and its not about slave labour either because most small business actually pays MORE in wages than say Tesco,Asda etc;Business wants encouragement with good solid "practical" help NOT silly words that any idiot can quote from a handout.

  • Comment number 11.

    Slash business rates charged by local authorities. Why? Because local authorities over-charge and collect business rates from small/medium business that go straight to central government - and not invested in commmunties these business rates are taken from. Aaaaargh!

  • Comment number 12.

    The single biggest problem facing small firms wanting to become bigger firms is taxes upon employment. A typical factory worker on £15k per annum requires the employer to pay National Insurance at 12.8%. The employee has to pay 20% income tax and 11% National insurance on all earnings above the measly allowances. That adds up to a tax rate on employment of low paid people of £43.8%, no wonder nobody wants to work in Britain for ordinary jobs.

  • Comment number 13.

    At #5 regarding IR35... IR35 was about making things more fair..... I was an IT contractor for several years and fell into the IR35 category, I didn't have a problem with it as I earned allot of money for very little work and effort... It was created to give you the same rights as normal full time emplyees but because of the IT boom in the 90's/2000's limited the powers of umbrella (tax avoidance) companies who would create "partnership" companies of 10's of contractors, so they could claim certain outgoings and taxes back and avoid a few percent more tax on £300/450/900+ per day contracting rates..

    And because of that, you'd be significantly better off compared to someone who earned the same amount as a salery.

    But that has nothing to do with small businesses....

    The biggest problem small firms face is cash flow. That majority of small companies that go under, are able to stay a float from their incomes, but have varing cash flow throughout the month so when they need it, things like overdrafts and loans bridge the gap. All it takes is a few clients to not pay an invoice on time (like in December or January) and a bank to deny services, that company can't pay their employees or other creditors, creating unnecessary debt and quickly result in the company going into Administration causing a domino affect to other business. That on a big enough scale is called a resession.

  • Comment number 14.

    I run a small market research agency. 5 years ago we used to conduct many public sector contracts but unfortuantely success in winning these now has been made impossible by their procurement procedures. These procedures have been developed to minimise risk rather than maximise quality or value. Small business can deliver a better result, usually at a lower cost in a shorter time period. In addition it has been recognised that small business contributes more tax. Unfortunately procurement procedures do not recognise these benefits and do everything to screen out small suppliers.

  • Comment number 15.

    As a professional services company I find it very annoying that tax is calculated from the point of invoice rather than when the funds are received from the client.

    Given the payment terms some of my customers work to now this can mean paying tax on revenue two or even three months before we receive payment.

    All very annoying and means that for some larger projects we have to raid our reserves simply to cover tax payments in advance of client payment.

  • Comment number 16.

    Perhaps Lord Young may be a welcome change of plan?


    Yet, curiously Lord Young contradicts Philip Green whose wife owns most of BHS shares as a private company and lives in Monacco to avoid tax in the UK?

    Can we assume that Philip Green's tax planning and his appointment would be in direct opposition to Lord Young?

    So, as we don't know how much Philip Green has charged us? Perhaps nothing at all - but he doesn't need to, does he.

    Therefore, Lord Young cannot operate to help small business while Philip Green is 'operating' for No.10 - any more than Rupert Murdoch's Mr Coulson as Director of Communications. No, Mr Cameron, we have not forgotten Mr Coulson, anymore than we have forgotten still excessive MP/MEP/LORD and LADIES expense/allowance claims.

  • Comment number 17.

    The Labour Government brought in a lot of 'equality' legislation that was not required and made small businesses costs and red tape increase ... unless they have been shown to have had a positive effect scrap the lot of them.

    Secondly introduce a record of complainants to employment and racial tribunals and identify the 'serial' professional complainants to these bodies. Anecdotally I have heard that there are a number of individuals who move from employment to employment accusing them of racism, sexual harassment etc after a few weeks of work then going 'long-term' sick for 'stress', they then take a payout to drop the cases.

    Recently an illegal immigrant and child smuggler from Sweden was caught entering the country to do this for the umpteenth time ....

    http://www.dailymail.co.uk/news/article-1278212/Convicted-baby-trafficker-deported-UK-sneaks-claim-thousands-employment-tribunal.html

    ... these tribunals are now seen as just money machines and not as correcting systemic employment issues. They hit small companies the most, as they can't pass on the payout costs to customers.

  • Comment number 18.

    Number one problem for small businesses (and large ones) is that there's not enough money about.

    Number two problem is that, the way the government is going, there's likely to be even less money about in future.

    ... and the government expects the private sector to create jobs. How, exactly?

  • Comment number 19.

    What is the point of this Post, while for a change 95% of what is written on here is accurate and to the point. The people who should read them won't, if they did they would simply ignore them for not being in their own interest.
    What is the problem with small Buisness, their to small to count, but not to small to tax heavly and overload with insignificant red tape just another form of tax.
    The Goverment should set up a country wide Quango for small Buisness
    providing cheap Accountance, HSE ETC. All Paid for out of UK Banking profits. Now that would be something usefull. Sorry I mean Bankers Bonusses.

  • Comment number 20.

    No. 11 Business rates are not set by the local authority they are set by the Valuation Office Agency. They are collected by the Local Authority and passed to Central Government.

    Why has no-one mentioned the National Minimum Wage?

  • Comment number 21.

    What barriers to growth are faced by firms?

    Payment to my business was 90% on plastic. The bank (under the guise of their card processing brand) took three days to clear card payments, the money being available at start of business on the fourth day. Effectively this meant, except for Mondays (the quietest day), it took seven days for card payments to clear. Presumably they switch their computers off on Friday evenings and turn them back on on Monday mornings. Except the ones that take money out of you account of course. When it had finally cleared, suppliers were paid by e-transfer. The same applied. This meant that from selling an item to paying the supplier took fourteen days.

    With some orders being in the thousands of pounds, this meant credit a suppliers could be used up for just that order, making any further orders impossible until the fourteen days had passed. It was impossible to grow the business, and indeed in trying to satisfy an export order for thee thousand pounds the cash flow collapsed and the buisness went bust.

    Why oh why cannot cards be processes instantly (after all, they take the money from your account instantly), I paid handsomely for each transaction to cover their costs. If cards were processed instantly, the business would have had no cashflow problem at all, except 24hrs for paying cash.

    Oh yes, silly me, the banks want to play with my money, at my expense, while they artificially delay the transfer.

    If the government want to do something really constructive, then either force the banks to make card transaction instantaneous, or take over card processing and do it themselves.

    Having an independent card processor would also help with fraud. At the same time that cashflow was perilous, the bank, without warning, took £886 charge back out of the account. Someone had ordered on-line with a 'lost' (note lost) card - SIX MONTHS previously. Did the card provider take the hit for the irresponsibility of their customer? No, I did - every penny. Card holders should look after their cards, I really don't see why small business should pick up the tab for bank customers carelessness.

    So Mr. Cameron, there is an opportunity to really do something to help small business. But you won't will you. Words are so much cheaper than actions.

  • Comment number 22.

    Red tape, red tape, red tape.
    I've worked for the same architects practice for 30 years. 15 years ago it was standard to apply for a planning permission & receive a planning decision within 8 weeks. We have recently been working on several projects that have not been given a decision for 2 YEARS.
    We always have a good chuckle in the office when we hear a housing minister stand up to the podium & announce that the government plan to build so many hundred thousand new homes in the next 3-5 years.
    We recently sent in a planning application to the local authority- 10 page design statement, 5 pages of engineers calculation, 5 copies of all 10 drawings, 5 copies of the planning application form (6 pages of tick boxes) & a covering letter. We waited for a reply.....4 weeks later the whole lot was sent back. The date on the application form had the wrong month written in. So rather than change it, they held on to it for 4 weeks then sent it back !!!!!
    This also ties in nicely with the question 'can we afford to cut 500,000 public sector jobs'....Y E S

  • Comment number 23.

    1) Stop shovelling the the costs of government responsibilities onto private enterprise. Instead of "private companies will take up the slack" try telling the truth: "we'd like private companies to pay for this because we can't."

    2) Cut red tape. Cut H&S red tape too. And all the Equal Opps legislation...we need to fight on the world stage. So untie our hands. And give us some boxing gloves.

    3) Abandon the ridiculous immigration caps. We can't get good people as it is. We certainly aren't going to hire substandard people just because you'd prefer us to.

    4) Be realistic about the housing benefit cap. Do you really think landlords, with mortgages like everyone else, are going to slash rents when there are people who aren't on benefits able and willing to pay the market rate? Hello? Mr Cammmmeeeerrrrroooonn? Wake up man!

    5) Cut tax for SME's. Seriously. Do it. Do it today. Nothing will help businesses invest faster. Income tax already makes it unattractive for directors to take profits in the form of bonuses. So the only alternative is to invest it for decent organic growth.

    6) Don't axe the regional business development agencies! Durrrr-brains! Make them more efficient, make them more accountable...but keep them. They're a force for good. Oi Cameron! Are you going to be on the ground in the North East, or Cornwall making investment decisions? Don't think so.

    7) Free up some lending. I know, I know...an old chestnut. But pretty darn real on the ground I can tell you. So stop blaming the banks and give them ONE THING TO DO. rather than the two conflicting requests they have currently. Do you want them to strengthen their balance sheets (ie..hold on to money) or lend it to us? Answer? YOU WANT THEM TO LEND IT TO US. So loosen the noose a bit and tell them.

    8) Fix our lifts!

    9) Force anyone with a cough, or cold, or flu, or any form of ailment FROM GETTING ON A TRAIN. We can't work, grow, pay taxes, hire people if we're all ill can we! In fact anyone ill and caught spreading diseases must be forced to watch the EVERYTHING EVER CONTAINED SIMON COWELL BACK TO BACK. That should sort it.

    10) I'm sure somebody more sensible will think of a number ten.

  • Comment number 24.

    With the last government the idea was that this country was to become IT based and not manufacturing based for companies, which meant a lot of jobs were lost when the factories shut down. New business proposals only seemed to get anywhere if they were IT based and no help to manufacturing. There was no insentive to keep any manufacturing here to compete with foreign countries. This country made it's money through manufacturing, just think of the industrial revelution which catapolted us to be a world leader, now we just bow down to everyone else. If the government help small businesses, one day they will grow and employ more people. It did not help when the last government followed the Americans in investing badly and giving people loans they so obviously could not pay which meant not much being left in the pot. Also make all the lazy dole scroungers (I am not including normal hardworking people who have had the mis-fortune to become unemployed)work for their dole money then soon enough they will find a job, not only that it is cheap labour until this country is back on its feet.

  • Comment number 25.

    Many problems.

  • Comment number 26.

    Well,

    one problem that we all face is the appointment of people like Lord Young to such positions.

    Oh, I know that he knows the Big Business Anthem and has topped many companies as CEO etc., but it is not the same as starting a small company to do building work is it? Or commercialising new technology.

    If only Cameron had appointed someone with an insight into the difficulties that face such people.

    We need to realise that the whole country cannot run on SMEs. Look at the power house of Europe. Germany - all industry remains (semi-protected and very profitable). Their work force is supported through redundancy and retirement. What did we do?

    ICI - broke it up.
    British Steel - broke it up and sold it off.
    Transport - tried to run it at a profit rather than as enabling people to get to and from work efficiently.
    Job seekers allowance - now there is a joke!!:-) You couldn't feed and house a dog on it let alone a family!
    Raid on the pensions to fund public spending jamboree.


  • Comment number 27.

    post #08 - 'scotty1694'. Naturally, all views are available on BBC HYS.

    If you were posting to seek a response - you have found one. Thatcher introduced interest rates of 15% on mortgages that destroyed families that have never recovered.

    Margaret Thatcher also privatised ALL our rail, water, electricity and gas supplies. Now most of these resources are owned and run by French companies who would not allow the reverse? Think on 'scotty1694'!

  • Comment number 28.

    Women joining a small form - getting pregnant AND being paid for the it thus stopping the small form employing anybody else. Totally Wrong !!

  • Comment number 29.

    As a small subcontractor that ultimately does a reasonable amount of work for the public sector the problems we face are related to Government procurement and payment times.

    Government contracts out to subcontractors rather that do work itself mainly because it can then distance itself from the outcomes if need be. There is loads of work we do that could easily be done in-house. It might take a bit longer, but often doesn't need any particular skill and the Government body would do well to take the opportunity to learn first hand about an issue rather than read a report about it.

    Anyway, Government departments, for ease of contracting, like preferred suppliers. Companies who can pass a pre-qualifying process. Usually, these are large, generalist consultancies. If your not on a pre-qualified list or are not a preferred 'panel' supplier, you can't bid. What ends up happening is that the large contractor gets the majority of business. Due to a naive client (the Government department involved) its relatively easy for a large contractor to convince of the skills they have to do the job.

    Then, being very close to the client and knowing the system, they win the work. The lead consultant does a bit of the work but quite often positions itself as the overseer of subcontracted work put out to others, like me. The value as they perceived it is to protect the client's interest - a role for which they take a considerable chunk of the revenue from the project.
    Naturally, as neither client or lead consultant necessarily understands the initial brief, it sometimes doesn't make sense. But there is no direct link made possible between the subcontracted expert and the ultimate client - why would the lead consultant want this to happen... Its very lucrative being the gatekeeper.

    Work is done, usually to a much tighter timescale than the lead consultant has been given, to allow him to pad out the report and sticker it up under his own name. At the same time, the subcontractor, who has delivered the majority of valuable content to the end product, is paid a sum considerably less than that of the lead contractor. If the end result isn't what the ultimate client wanted, payment is then typically in dispute. If the client had a preconceived outcome in mind and specced the project wrongly, its rare they accept they perhaps asked the wrong question, and the lead consultant wasn't sufficiently expert at the point of negotiating the work to realise the question was wrong.

    Nevertheless, the end client pays, maybe on time.. who knows... The lead consultant sits on invoices from the subcontractor as long as he likes, sometimes quibbling over insignificant issues, particularly if the end client has penalised them for some reason.... margins have to be protected you understand. As a small business, there is no transparency over whether the lead consultant has been paid or where the delay really is.

    For work commissioned in February and done in March and April this year, now, in November, I'm still waiting to get my invoice settled by the 'lead' consultancy. It is only through bitter experience we ask for 50% payment up front. I'm 100% certain the lead consultancy's invoice to the client was multiples of mine to theirs, and I'm equally sure that they've also been paid.

    Although my contract wasn't with Serco, but another large national generalist firm, it pleases me no end to see Serco wanting to share the pain with suppliers... Maybe it should start sharing the upside and passing payment through the chain faster during the good times as well....

    Frankly, the Government and its departments are on the drug of consultants. They would receive much better quality work at a far lower cost if some effort went into educating itself, doing more in-house, and identifying and reaching out to smaller subject matter experts for specific bits of a project.

    Red tape and bureaucracy is a pain and could be trimmed down. But killing cash flow by stalling payment of invoices is the fastest way to kill a small business.

  • Comment number 30.

    Some one on here wrote, they were waiting for someone to mention thatcher. I was waiting for some small business person to mention the Minimum Wage.
    Lord Young(Thatcher's favourite Minister, "he brought me solutions not problems" is to be the new Enterprise Tsar.
    What does the small business want?
    Low or Minimal taxation, exemption from Health & Safety legislation, to be allowed to pay their employees £1.68 an hour while drawing £100k a year for themselves.

  • Comment number 31.

    "6) Don't axe the regional business development agencies! Durrrr-brains! Make them more efficient, make them more accountable...but keep them. They're a force for good. Oi Cameron! Are you going to be on the ground in the North East, or Cornwall making investment decisions? Don't think so."

    You have to be joking. They are insidious organisations involved in hijacking major projects and farming them out to their pet suppliers and inner cliques. They are corrupt to the core and the sooner they are gone the better. Flush Business Link down the pan with them for the same reasons.

  • Comment number 32.

    In recession times the smaller businesses are the ones that suffer, they are the sub-contractor to the larger ones that withhold payment to weather the storm, the small business collapse due to lack of funds. The reaction to this was to bail out the banks to support these businesses and get them lending. Well what did these banks do, used it to make money for themselves and allowed the small businesses to collapse, they then paid themselves bonuses for doing so. No bank has made an honest profit, it is from taxpayers funded money that was supposed to have supported our business. Banks should be forced to give 0,5% overdrafts to all small businesses that have had a good record over the past years, if they have debtors that are in a position to pay within time why let these smaller companies fold as it is not their fault. Don't hold your breath though as banks are there to feather their own nest, I suggest every business that survives this recession without the banks support changes their bank at the earliest opportunity.

  • Comment number 33.

    Replace Sugar with Young and what do you get: an enterprise "tsar". Please, did the UK have to steal or borrow this term from the United States? Personally I find it distasteful.
    David Cameron says the Conservative peer will carry out a "brutally honest" review of strategies designed to encourage new start-ups.
    Really? Was this review even necessary?
    The key for small business growth is "capital flow", or "lending" or "Give me some cash to operate!" - Whatever term you prefer.
    Young's review of enterprise policy will aim to:
    Minimise the "bureaucratic burdens" which increase costs and hassle =
    The key to for small business growth is "capital flow", or "lending" or "Give me some cash to operate!" - Whatever term you prefer.
    Identify ways that government departments can help ensure firms have access to sufficient finance =
    The key to for small business growth is "capital flow", or "lending" or "Give me some cash to operate!" - Whatever term you prefer.
    Mr Cameron said Lord Young would bring "his own passion for business and a wealth of experience to the role".
    As small and medium-sized businesses provided 60% of the UK's jobs, and accounted for half the country's economic output, encouraging their growth is crucial to sustaining the economic recovery.
    With significant cuts planned for the public sector and up to 500,000 jobs set to be lost, the government is hoping the private sector will expand and create new employment. Gulp!
    But Labour says the government has "no plan for growth" and I tend to agree with Labour. What The Coalition Government has is an enterprize "Tzar" while the Government itself is cutting support for regional economic development and allowances for manufacturing firms investing in machinery.
    In order to foster small business growth, at a minimum, you must
    1. provide training for those persons who want to dive in, but are leery about the process;
    2. provide a hotline or advice centre where small businesses can contact for advice
    3. provide faciliation, such as onsite daycare so that females can keep their businesses afloat
    4. provide easy credit to encourage growth and hiring
    5. legislate that financial institutions must lend to small business as long as the business prospectus appears healthy. A decision not to lend should be subject to Governmental review, and adjudication.

  • Comment number 34.

    High Taxation & unfair employment laws.

  • Comment number 35.

    Big companies who want to pay on 90-120 days and even then find a way to delay.

    Overheads like electricity and gas that make it hard to compete in manufacturing.

    Overseas competition that have high import duties in their own countries whilst we have very little.

    Banks reluctant to take risks... which is ironic.
    Im sure we will think of more.

  • Comment number 36.

    @LeftieAgitator "What does the small business want? Low or Minimal taxation, exemption from Health & Safety legislation, to be allowed to pay their employees £1.68 an hour while drawing £100k a year for themselves."

    As the employer is the one taking all the risks, finding all the capital, paying all the bills and taxes, including the employer's part of the employees' own NI, there is nothing wrong with that approach.

    If you want to continue to tax and regulate employment abroad then feel free to eat your mad lefty dreams and starve as a result.

  • Comment number 37.

    8. At 12:03pm on 01 Nov 2010, scotty1694 wrote:

    taking all bets on how long it takes before somebody blames thatcher? or something totally unrelated!


    You are right. Blaming Margaret Thatcher for every problem in today's society is the action of the weak willed and feeble minded who can't think for themselves.

  • Comment number 38.

    37. At 1:34pm on 01 Nov 2010, Magi Tatcher wrote:

    8. At 12:03pm on 01 Nov 2010, scotty1694 wrote:

    taking all bets on how long it takes before somebody blames thatcher? or something totally unrelated!

    You are right. Blaming Margaret Thatcher for every problem in today's society is the action of the weak willed and feeble minded who can't think for themselves.

    ----------------------------

    Ive had a think... I could be wrong but wasnt it Maggie who sold off most of our utilities that should have been a national asset instead of falling in to greedy hands and fleecing all of us?

  • Comment number 39.

    NONE THEY EMPLOY ILLIGAL

  • Comment number 40.

    Downing Street says the Conservative peer Lord Young will carry out a "brutally honest" review of strategies designed to encourage new start-ups.
    What is the small business experience of this appointee? His biop states his role in Cable and Wireless a major international company. What in the name of good grace does he know about the problems face by the corner shop, the hairdresser, taxi firm? These firms create as many jobs as C&W’s et al. But they do not have the fat to deal with the guff!
    Now they get an Ex-executive director of a multi-national to patronise them as Sugar did!
    Contempt I call that, but I know what the word means, unlike our leaders!

  • Comment number 41.

    I find it remarkable, but unsurprising, that very few people in small business ever say anything positive that would increase trade, or increase the standard of living of their employees. It's all cut, subsidise, deregulate, stop tax, provide free money and everlasting loans, make the government provide all supplies, services and training, remove any job and safety protection, bring in more cheap labour.
    People really should be asking themselves why they are involved in small business if it is so unprofitable as to not provide enough money to pay tax and NI, training, decent wages, good conditions and social advantage.
    Perhaps they should be applying for cushy jobs with gold plated pensions.

  • Comment number 42.

    The biggest problem small businesses have is that they cannot compete in most market places. They then demand that banks lend them money, the interest then becomes a burden and makes them even more uncompetitive. Profit and success is not a god given right, it has to be worked for, and blaming the system or the competition is not a valid excuse for failure. So many small businesses fail because they start up without the necessary capital, experience and diligence for success.

  • Comment number 43.

    Cut red tape - isn't this the same outfit that wants to saddle every company with the requirement to pay for and provide gambling facilities for everyone (pensions are a form of gambling - gambling on the incompetance of your fund 'manager' to be such that your 'investment' might grow - check your 'investment', my 20 year old pension is worth less than the cash that I've wasted on it! Even if it were in a better condition then the income it provides will be based on some future calculation by a 'pension company' which I can't predict or control).

    What this government needs to do is cut regulation like this, cut the health and safety stuff to size, prevent people being sued by those who don't refuse to use a ladder because they aren't clever enough then fall off it, above all they need to create a bank that lends to small business - none of the high street ones will (at least not at a sensible rate of interest or a sensible size of fee) or finally get around to forcing the issue with the banks the tax payer already earns (they can pay for the risk by cutting the chief execs pay and bonus package to size).

  • Comment number 44.

    The odds are already stacked against small businesses succeeding in the UK, so any reduction in red tape is welcome. However, I doubt there will be any real changes as there are too many powerful lobby groups who benefit from it.
    The Government could best help by spending a larger percentage of their budgets on small local businesses and removing the requirements that effectively exclude small businesses from securing tenders. My company regularly bids for such tenders well within our capability to deliver, but even for the smallest requirements they require copious legislation compliance documentation and procedures They require vast insurance cover, question turnover and numbers of employees, and often deliberately create costly barriers to entry. For example we specialise in IT security and hold many well established internationally recognised accreditations, but in order to bid for a tender you now require a newly created accreditation only valid for UK government projects, costing a £7.5k 'registration fee' on top of all the training, and is almost impossible to obtain unless you already provide security services to the government (which require the accreditation).
    Contracts are mainly awarded to large multi-nationals who used to sub-contract locally, but now mainly use offshore staff or non-EU staff on Intra Company Transfers. All of which takes scare money out of the local and UK economy.

  • Comment number 45.

    "#39. At 1:41pm on 01 Nov 2010, john wrote:
    NONE THEY EMPLOY ILLIGAL"

    Well with a lack of comprehensibility and spelling like that, they would probably be better off with 'employing the illegal' immigrants that you are presumably upset about ....

  • Comment number 46.

    "6) Don't axe the regional business development agencies!"
    31. At 1:21pm on 01 Nov 2010, RightWingIDBanned wrote:
    "You have to be joking. They are insidious organisations involved in hijacking major projects and farming them out to their pet suppliers and inner cliques. They are corrupt to the core and the sooner they are gone the better. Flush Business Link down the pan with them for the same reasons."
    Absolutely 100% spot on. Whether deliberate on not they always make things worse by distorting the local market. All too often they heavily support specific (usually larger) companies, quite often from outside the area, to such an extent that other local businesses offering similar services cannot compete, who then shrink or go under. The supported companies withdraw or disappear once the money dries up and the damage is done.

  • Comment number 47.

    I see the chief executives of small to medium size firms overall received no pay rise last year. While those of major companies and hedge funds, including all the people responsible for leaving the economy in a mess ,paid themselves an extra 55% While shedding 10's of thousands of staff and outsourcing production and support to the far east.

    This sector also includes the vast majority of tax avoiders and non dom tax dodgers.

    The answer is simple the major problem that small businesses face is the same as the rest of us who aren't board level members of big businesses.

    IE Big Businesses!

  • Comment number 48.

    I think the biggest problems facing small business are not those created by government, but those created by the changing face of society.

    Every time one of these stories comes up, someone bemoans the rise of the supermarket giant and how it is destroying the 'local' seller. However, the modern supermarket giant is precisely what most people have in mind as a successful outcome of their new business idea - massive profits, big name, lots of other people to do the work for you.

    Asda was formed in the 1960s from the merger of two local businesses.

    Tesco was formed in 1919 by a bloke working from a market stall.

    Sainsburys was formed in 1869 when a businessman opened his first grocery shop.

    Morrisons entered the retail market with a single small store in the 1950s.

    All are now massively profitable enterprises, and yet all at one time were small businesses. They just became very successful small businesses, and grew.

    What these giants offer me now over local shops is everything I want in my shopping experience - ease of parking, a massive range of goods, sensible prices and convenient opening times.

    That last reason is probably the most important - I, like most people in this country, work the standard working week of 9am to 5.30pm, with a 30 minute walk to and from work. All of my local retail shops open between .... 9am and 5.30pm during the week day, so if they were my only option then I would have to spend my Saturdays doing my food shopping instead of doing whatever recreational activity I intended on doing. Instead, I can go to Asda, get everything I want in one 45 minute visit once a week, at any time of the day (literally, my wife has gone at 4am on several occasions when she finishes her hospital shift).

    Businesses, start adapting to your clientele better - then you might see some results.

  • Comment number 49.

    37. At 1:34pm on 01 Nov 2010, Magi Tatcher wrote:

    8. At 12:03pm on 01 Nov 2010, scotty1694 wrote:

    taking all bets on how long it takes before somebody blames thatcher? or something totally unrelated!

    You are right. Blaming Margaret Thatcher for every problem in today's society is the action of the weak willed and feeble minded who can't think for themselves.

    ----------------------------

    Ive had a think... I could be wrong but wasnt it Maggie who sold off most of our utilities that should have been a national asset instead of falling in to greedy hands and fleecing all of us?

    ----
    Also responsible for the sale of the vast majority of social housing stock without replacement for purely political reasons ,the absence of which is the root cause of the excessive cost of housing benefit now.

    But of course I am sure it was really all Gordon Brown's fault!

  • Comment number 50.

    Besides being unable to get money and being weighed down by stupid ideas (pensions for everyone - I mean, I CHOOSE not to have a pension because they are BAD value for money, and a GAMBLE).
    We then have the stupidity of government procurement which actively works AGAINST British companies and forces councils and other public bodies to advertise and accept foreign bids for work instead of getting it done locally (and if you get the French to maintain our aircraft carriers - when they get built - will be yet another in the long list of examples of the BRITISH tax payer being forced to pay unemployment to BRITISH workers AND money to French ones at the same time. STUPID so STUPID I'd love to meet Cameron to explain it to him. It is NOT clever to chuck BRITISH workers out of work while employing foreign ones!

  • Comment number 51.

    Cash flow hiccups & high bank interest rates are the problems faced by most businesses, let alone small businesses.

  • Comment number 52.

    The only problem so called "small business" faces is how soon can they get Cameron and his sycophants to dispense with all workers rights and bring in a law ending the minimum wage in order that they can then pay the "hard to afford" 50 pence an hour, then a law to exempt "small business" from paying any tax at all.Although on reflection, that will not really be a priority as "small business" employ accountants to ensure they are able "to avoid" taxes. Was it not a "business leader" who stated "Only little people pay taxes"? The problem is that British Business cares nothing for this country,just how much profit they can make.Left to their own devices "Business" in this country would return us to the 19thC.

  • Comment number 53.

    "You are right. Blaming Margaret Thatcher for every problem in today's society is the action of the weak willed and feeble minded who can't think for themselves."
    Not so, those that blame Thatcher are only looking at 70% of the story, 10% is the Heath lies to get us absorbed by the Euro-Borg which forces so many extra rules on every business (because our weak willed and lazy politicians won't think of anything apart from their next expenses wheeze), 10% is the post Thatcher governments who just carried on with the policies, and 10% is the appaling money grabbing idiots that run most of our businesses into the ground because they don't possess the intelligence to do otherwise.

  • Comment number 54.

    It looks like Say One Thing and Do Another...

    Government is still creating Red Tape and Additional Administrative work, for example the compulsory new pensions that could easily be dealt with automatically by an increase in NI (providing the money was properly invested).

  • Comment number 55.

    The small businessman complaining here about red-tape and government bureaucracy would probably be ruthless exploiters of their workforce if it wasn’t for the restrictions they complain of.

    If some would be businessmen are discouraged from setting up a business because of requirements to treat their employees in a reasonable manner than it is probably for the good. Do we really want these amoral men running sweat shop industries?

    The trouble with both small and large business is quite simply a low standard of ethics – businessmen deserve little sympathy.


  • Comment number 56.

    53. At 2:23pm on 01 Nov 2010, anotherfakename wrote:
    "You are right. Blaming Margaret Thatcher for every problem in today's society is the action of the weak willed and feeble minded who can't think for themselves."
    Not so, those that blame Thatcher are only looking at 70% of the story, 10% is the Heath lies to get us absorbed by the Euro-Borg which forces so many extra rules on every business (because our weak willed and lazy politicians won't think of anything apart from their next expenses wheeze), 10% is the post Thatcher governments who just carried on with the policies, and 10% is the appaling money grabbing idiots that run most of our businesses into the ground because they don't possess the intelligence to do otherwise.


    Another way of looking at the "Heath" 10% is that because of those "extra rules" small businesses have access to a market of 500 million, unimpeded by tarif and non-tarif barriers, rather than a market of just 60 million. They may, of course, face language and cultural issues to tap into that large market, but none deriving from legal, regulatory or tax requirements. So, for example, a specialist brewing company used to face non-tarif barriers (eg the German 1515 "beer purity" laws) to trading in other EU countries but not any more.

  • Comment number 57.

    The first thing for any "Tsar" to get to grips with is that whatever you get by way of briefing from a policy wonk will be culled from theory and text books and not ever, EVER, from real life. In the real world starting up a business means, in most cases, putting your own money up front, either in cash or by way of a charge against your home. So the risk is immense from the word go. Then you have to actually grow your business, find and retain clients, deal with competition, still try to generate some earnings for yourself whilst trying to take on staff, pay their costs (which are massive), worry about the VAT, HMRC, H&S, every piece of sorry legislation that emanates from the EU in the name of "equality", maternity leave, paternity leave, shortly pension provisions and STILL try to make a profit so that you can expand.
    If you do manage to get over the initial hurdles, free up your home from acting as your security with the bank, and reach a reasonable critical mass, you hit the wonderful world of corporation tax, which is a whole other circle of h*ll. You may gather from my comments that I've been there, done that, got the Tshirt, got out and have told my friends to shoot me if I ever suggest doing it again. Yes, there can be fantastic exceptions to the rule, but they are few and far between and owe more to sheer luck and being in the right place at the right time than they ever do to government policies.
    "New businesses" are an easy political mantra to chant and can spin well with the press for a short while, but I've yet to come across a politician, civil servant, or other policy wonk who has actually ever done that very thing. But hey, let's hear from them to the contrary. The surface area of a postage stamp ought to cover it.

  • Comment number 58.

    "
    51. At 2:17pm on 01 Nov 2010, ian cheese wrote:

    Cash flow hiccups & high bank interest rates
    "

    High bank interest rates, lol! Good job you weren't around in business during the 80's and early 90's! For our business, the low interest rates of today's are the least of our worries.

  • Comment number 59.

    #4. Alcibiades wrote: "Very, very big firms"

    I agree. I also see small firms as having problems advertising services at realistic rates, obtaining financial and administrative support during the first two critical years, and not being in a position to challenge the 'big boys' for Government and public service contracts.

    A Tsar may have been useful a hundred or so years ago, but, in Tory speke, what is needed now is a philanthropist.

  • Comment number 60.

    "As the employer is the one taking all the risks, finding all the capital, paying all the bills and taxes, including the employer's part of the employees' own NI, there is nothing wrong with that approach."
    =========================
    Mr Gradgrind I presume.

  • Comment number 61.

    The problem with starting a small business is that larger companies have taken control by dictating conditions and applying laws and directives, from manufactured qualifications to licences and insurances that suit there needs, to prevent competition, small businesses especially manufacturing enterpreners, are bankrupt before they even start because of all the nonsense fabrication thats been designed. Starting a manufacturing business is a nightmare especially with EU certification and patents that prevent the simplest of products to be made. the big baddies bought all there competition and payed off MP's to prevent fair trade which include products for importing and exporting. Example, can you start manufacturing shoes, No because a big company says so because they hold a patent to the design of a shoe. They have the power! to stop you and destroy you! That's the main problem! That's why manufacturing has almost disintergrated in UK, Investors aboard have bought all british industry, We have nothing for a stable and reliable future.

  • Comment number 62.

    It will probably mean precious little to small businesses. What it definately does mean is another fat cat making ridiculous money for reviewing strategies and producing reports that basically end up telling us something we already know. Why not put his wages into helping small businesses? - Surely that would be more beneficial.

  • Comment number 63.

    All this user's posts have been removed.Why?

  • Comment number 64.

    Some people don't realise that business CAN borrow - just that interest rates for tiny loans start at over 7% with directors guarantees (effectively a mortgage on your house), larger loans are often more expensive.

  • Comment number 65.

    the key problems will begin when VAT goes to 20%
    the cost will then take effect for businesses that
    do not pay VAT
    plus the taxman will see a raise in fraud
    many small corner shops now go to the large supermarkets
    to buy there stock as from the supermarket
    they do not declare it, plus no VAT plus cheaper than the whole sellers

  • Comment number 66.

    "As the employer is the one taking all the risks, finding all the capital, paying all the bills and taxes, including the employer's part of the employees' own NI, there is nothing wrong with that approach."

    There is when I as a taxpayer has to subsidise the employer by ensuring that the employees have a decent amount of money to live on.

    Maybe a law should be brought in stating that no employer is allowed to earn more than a certain percentage of the minimum they pay their staff with that minimum being equivalent to a reasonable living wage. We can no longer afford to complain about benefits telling people that they are no longer entitled to a benefit that brings their wages up to a reasonable standard whilst applauding an employer who pays them that low wage.

    Re "...that will not really be a priority as "small business" employ accountants to ensure they are able "to avoid" taxes."

    Wasn't this one of the complaints about Murdoch, that for a business of the size he runs he was paying back very little in tax. Far from a small business.

    Re Thatchers policies. If the money raised from the sale of our utilities had been put into business development nobody on here would have a cause to complain. It wasn't, it was frittered away on tax cuts or, as some describe them, election bribes.

    As for the original question how about a simplification of taxation. Currently I can claim for one thing as an expense but then have to declare it elsewhere and end up paying tax elsewhere. Too complicated.

    Also I've just spent around 20 minutes going through a query I had with the VAT people. Having finally had the situation explained the poor chap (to his credit) had to ring and tell me of a proviso that he hadn't mentioned. If the staff who are supposed to advise us can't get it right then how can those who are legally obliged to do so be expected to.

  • Comment number 67.

    "What problems do small firms face?"

    Government.

  • Comment number 68.

    I'm sure say, a recently redundant Public Health Inspector will hardly be able to wait to take up a job, such as a scrap fridge dismantler, in the private sector.

    Yes we can trust them to provide jobs like that, to employ those displaced by the cuts, I'm sure.

  • Comment number 69.

    Small firms are plagued by the rising cost of living, the government (past and present) and big firms.

    We are over populated which allows choice. Sadly the choice is usually to give our money over to huge firms who just get richer, people who offer the lowest cost (but rarely the quality of product) and the government who simply waste it making everyones life worse.

    A revolution should be due, but we are all too apathetic.

  • Comment number 70.

    I fully support small businesses. I make it a point to give custom to our local chemist, baker, fruit and veg, bike shop, etc. to keep them going. Even though they may be just that tiny bit more expensive.

    Small businesses should be given a fair chance. If I could, I would only buy things made in the UK. Just about everything I seem to buy is made in China.

  • Comment number 71.

    38. At 1:37pm on 01 Nov 2010, justanotherworkerbee wrote:

    37. At 1:34pm on 01 Nov 2010, Magi Tatcher wrote:

    8. At 12:03pm on 01 Nov 2010, scotty1694 wrote:

    taking all bets on how long it takes before somebody blames thatcher? or something totally unrelated!

    You are right. Blaming Margaret Thatcher for every problem in today's society is the action of the weak willed and feeble minded who can't think for themselves.

    ----------------------------

    Ive had a think... I could be wrong but wasnt it Maggie who sold off most of our utilities that should have been a national asset instead of falling in to greedy hands and fleecing all of us?



    ---------------------------------------

    the point is its no good blaming thatcher for something that way along time ago now.
    labour had 13 years to correct thoese mistake but the didnt so they probably agreed with them in some way.

    and its besides the point if everybody sits around blaming each other nothing will ever fix itself there to much of a blame culture in the uk now, too many people trying to find somebody to blame instead of working on a solution! thatcher played a part but in such a long ammount of time nobody actually did anything about it to correct it?

    lets stop this left wing right wing crap labour, tories , lib dems they all pee in the same bucket theres hardly a major difference between them so instead of us the people running about blaming labour or the tories etc lets actually work together ???? (prehaps is the parties followed this advice the country would go forward)


    and im absolutly AMAZED that they havent had a HYS on the new statistics for drugs today proving cannabis should be legal! were missing out on billions of pounds worth of tax
    crazy idea i know!

  • Comment number 72.

    There is a need to control banks as it is them who push and sometimes intimidate small buisness to expand too quickly just to increase there own profit margines.

    I have known a few small companies get lent on by there so called business advices from the banks, only to find that expanding was the wrong thing to do for them at that time and they ended up bankrupt.

    The greed comes from irresponsible greedy bank advicers who want more from the small buisnessman then he can provide or cope with.

  • Comment number 73.

    what problems do small businesses face? Tax, tax and yes tax! My boss asked the local council about having one bag of rubbish picked up by the lorry every week, 'oh you have to pay for that' what do I get from paying local business tax then? We look after the flower beds and local policing. Small businesses pay Business Tax, Corporation Tax, Income Tax and VAT. And in reality what do they get for it? Nada, Nicht, nothing. Ease some of the above and smaller companies could actually employ more people and increse production thereby getting the economy moving, but that seems to be too difficult to work out for the so-called 'experts'

  • Comment number 74.

    The UKs employment and discrimination laws work against employment. Anyone taking an employer to a tribunal should have to pay a bond of £1,000. If they lose the case the lose the Bond.

  • Comment number 75.

    Most small businesses are run by people who know their business, who they are supplying / selling to. Where they have a problem when faced by a council functionary (who would never dream of self-employment, starting a new small business and losing out on their pension), regional government flunkies and national government apparatchiks who are better rewarded, as if that were sane! They do not understand needing less than 10 persons to sit in a room to achieve filling in a form, they do “understand the market sector they are addressing” as a term but not what it means. Its jargon, they can do jargon, diversity and jargon, monthly courses in each mean the hectic pace of their live can tolerated. Yet they decide who gets assistance based on criteria that ministers, who have never done any of this themselves! I have done this job, helping new businesses, in the voluntary sector and had 75 users at any time, the local authority hired more people when they got to 5 users each,
    Bank clerks decide on who gets loans based on the advise of their business advisor, a clerk with a two day course behind them. A large employer, strict inflexible structures and rules. Yet these are the fool’s who bought dodgy mortgages from the Yanks.
    Whilst the assistance is run by amateurs and those who’s organisation actively hate the concept on non-dependence on them and the state it is expensive, valueless and useless.
    End high profile “jobs for the boys” let those who have really done it, and have not got so big they think they are the solution, get on with it!

  • Comment number 76.

    What problems do small firms face?

    Monopolies. Big companies that go out their way to eat up any competition before them and making the biggest profit possible. A pointless exercise if you ask me.

    Sure, there's the ol' government 'red tape' to cope with, but these are regulations to ensure fair trading standards. There needs to be someone to ensure that things are going legally, otherwise small businesses won't survive.

  • Comment number 77.

    The problems created by government and unfair competition are well known, and real, and will no doubt be mentioned in detail here.

    But small businesses should also look at themselves, and see what they could do better. There really are some brilliant small businesses. For example, we have a couple of local cafés which manage to table serve better food cheaper than any of the chain store costabucket equivalents.

    But all too often, service in small shops is useless, as is the product. The owners seem to be poorly trained and educated, and the staff don't care. Compare and contrast the average British B+B with its family run German equivalent. We don't look too good....

    It's rare you find British SMEs with trainees, too.

    Things do seem to be improving, as many of our young people do seem to be more commercially orientated, but many of our traditional SME's really only have themselves to blame for their problems.

    The government can and should do more to help, by getting local government to buy more from local suppliers for example, and doing more to encourage apprenticeships. But the poorly performing businesses should also be compareing themselves to other companies, here and abroad, and seeing what lessons they can learn.

  • Comment number 78.

    IT's big business that we need.
    I would like to ask the politicians who have overseen the demise of our large manufacturing companies, why is that most of our European partners have kept theirs.
    Automobile Industry.
    France ..Citroen, Renault Peugeot
    Germany..BMW, Audi Volkswagen, Porsch
    Spain Seat
    Italy Fiat
    Sweden Volvo

    Telecoms
    Germany Siemens,
    France Alcatel
    Finland Nokia
    Sweden Ericsson

    You can do the same with most other major industries.
    Every town in this country has waved goodbye to it's major employers.
    Why is that I wonder.
    Unions don't come out with much credit either.Their stance against containorisation lost us the Europort to Holland. The strikes in the 60's and 70's lost us much foreign investment.
    Our so called leaders have led us up the garden path I fear.
    It will take at least 50 years to, maybe, repair the damage.

  • Comment number 79.

    Margaret Thather was the root cause of this country going downhill. She sold everything that belonged to me, without my permission.I was paying rent to a private landlord, I didnt get to buy that property. Why did the council estate residents get that privilege? This is just one tiny example of her shrewdness. I was always distrustful of the Tories after because of her. I was labour, but always voted Lib Dems who were strong in our area. Labour oouldnt undo what Thatcher did, but instead proceeded to spend my money, making just about everybody happy, to get votes. Most of the funding the coalition has to cutback, shouldnt have been given in the first place. I will continue to support the Lib Dems, and David Cameron. He is sincere and genuinely cares for us.As for Labour, I dont think they should be allowed to say a word in Parliament. They have some cheek to oppose the cuts.

    I hope the coalition encourages small business.









  • Comment number 80.

    "
    65. At 3:20pm on 01 Nov 2010, john wrote:

    the key problems will begin when VAT goes to 20%
    the cost will then take effect for businesses that
    do not pay VAT
    "

    Any business which is not VAT registered should not to be called a business. It's madness not to be VAT registered, sheer madness.

  • Comment number 81.

    "
    76. At 4:06pm on 01 Nov 2010, Planet Mars wrote:

    What problems do small firms face?

    Monopolies.
    "

    Name some Monopolies, other than the water companies and train companies.

  • Comment number 82.

    Piscatore wrote "Anyway, small business is not what the UK needs. All that most of them do is services for increasingly scarce wealth producers, like factory workers. Dave should be asking why we have not got big business that employs thousands."

    Clearly then UK Government Audit Office figures, which show that SMALL business forms about 65% of the UK GDP are wrong?

    Small businesses ARE what the UK needs and the UK Government should be doing MORE to support small businesses across the whole of the UK. Its a just a wee small point but - without the small businesses providing services to the larger businesses, the UK would not be sucha good place for large/corporates to do business in!

    The reason we're in the goo is that both the previous Government and the current one, whilst they may have the rhetoric, do little (i.e. NOTHING) to support or promote small business/enterprise in the UK. Instead they'd rather pour billions of pounds into paying the feckless to stay at home and hundreds of billions of pounds into the financial services sector - who got us into this mess in the first place by gambling with non-existent money.

    Small businesses - the growth of them and their sustainability - are the central plank upon which UK economic growth needs to be based because the proliferation of these service provision businesses will make it more attractive to larger businesses to expand and come to the UK.

  • Comment number 83.

    LeftieAgitator "What does the small business want? Low or Minimal taxation, exemption from Health & Safety legislation, to be allowed to pay their employees £1.68 an hour while drawing £100k a year for themselves."

    Of course, you'd never have the bottle to run your own business. If it's so easy to run a business, why aren't you doing it yourself, and paying your workers a wage you think correct? Oh....no? Not actually doing it? Too much effort? Too much risk? Easier sitting at your keyboard typing tosh? Thought so.

  • Comment number 84.

    I am an independent retailer on the main High St on the South Coast, just off the M27.
    My main gripe is business rates and the unfair way in which those traders on the High St are "victimised" by the VAO.
    If out of town supermarkets had to pay the same rates as me per Sq Mtr, then they would end up having their bills X8.
    Its unfair and unjust.
    The other problems faced by small business is the amount of H&S regs, regs from the EU and so many different forms to fill out. We will soon have compulsory pension pots for employees, so you know whos going to pay for that, dont you Mrs Consumer.
    So what will that bring?. I'll tell you, shorter hours so the employer doesnt have to start a plan, which will leave a huge hole in Mrs Consumers pocket so she wont have enough money to support the already under pressure small business, which will go out of business, thus putting more people on the dole.
    Something needed to be done to turn the economy round, but Mr cameron, be very careful where you tread, and remember, small business's are the backbone of this country.

  • Comment number 85.

    EFG (Enterprise Finance Guarentee), Not a guarentee thant the banks have kept to. If it were not for family and friends my Comany coulds have gone under at the start of the Recession, Why, because customers went under, large customers delayed payments or reset agrements to pay in 90 days, if you chased them. It seemed the more you owed the banks the more they would lend, our problem, we had no overdraft, or loan with the bank, just 4 years of contibuos groth in sales and profits, but NO DEBT! Banks just said NO! They did not interpret the EFG at all and they still don't. I will always have a SME it cannot get large as evereything is against us Government and the banks. This year we have taken sales from 2 mil to 3.1 mil and Gross Profit some 800k net will be around 350k, with no help. If we had had the help and support I would be employing maybe 15 more staff. I manafacture and export over 40% to China, no how many manfacturing companies are exporting to China! Have written to MP's, andf Ministers in the recent past. It takes them 4 months to reply, usually with just the party drival.
    I will probably sell the Comany in next two years to a larger group either Americans or Far East for £5, or £6 mil and give it all up as it is just swimming against the tide. Alan Sugar (Buis Czar) what a joke, he's fired its just gimick drival from all poloticians.
    Meanwhile I better get on doing Government bidding, collecting their VAT, NI, EXPORT DATA, and so on. Maybe they should do a week in a small comany and see the Issues.
    My two Children when they have finished Univerity and leave with their large Debt will I hope take themselves off to somewhere that appreciates their talent and future contribuition as this country seems to have given up, OH APART FROM BANKERS WHO WE DO LOVE!

  • Comment number 86.

    "60. At 2:56pm on 01 Nov 2010, LeftieAgitator wrote:
    "As the employer is the one taking all the risks, finding all the capital, paying all the bills and taxes, including the employer's part of the employees' own NI, there is nothing wrong with that approach."
    =========================
    Mr Gradgrind I presume."

    Someone with a pair. Something you obviously lack.



  • Comment number 87.

    56. At 2:40pm on 01 Nov 2010, Total Mass Retain wrote:
    53. At 2:23pm on 01 Nov 2010, anotherfakename wrote:
    "You are right. Blaming Margaret Thatcher for every problem in today's society is the action of the weak willed and feeble minded who can't think for themselves."
    Not so, those that blame Thatcher are only looking at 70% of the story, 10% is the Heath lies to get us absorbed by the Euro-Borg which forces so many extra rules on every business (because our weak willed and lazy politicians won't think of anything apart from their next expenses wheeze), 10% is the post Thatcher governments who just carried on with the policies, and 10% is the appaling money grabbing idiots that run most of our businesses into the ground because they don't possess the intelligence to do otherwise.

    Another way of looking at the "Heath" 10% is that because of those "extra rules" small businesses have access to a market of 500 million, unimpeded by tarif and non-tarif barriers, rather than a market of just 60 million. They may, of course, face language and cultural issues to tap into that large market, but none deriving from legal, regulatory or tax requirements. So, for example, a specialist brewing company used to face non-tarif barriers (eg the German 1515 "beer purity" laws) to trading in other EU countries but not any more.

    ----------------------------------------------------------------

    No 56......... Do you know hw much of our produce is export to you beloved EU?.. No, I thought not!

    Less than 20% of what we produce is exported, and only about 40% of that 20% is exported directly to other EU countries, the rest worldwide.

    Your arguement is the age old Europhile answer and I can tell you now, most small firms dont even export. Most small business's dont even need the EU to survive, but they are impositioned with their rules and regs, stipulated to them by the big conglomerates.
    Small business's in the UK have it easy compared to those on the continent, where they have to go through mountains of red tape and back handers. We just have successive governments that couldnt care less about us, so long as we pay our taxes.

  • Comment number 88.

    Ask anybody who imports fresh produce from outside the EU about problems. Don't dare have a single kg of eggplants or basil more than it says on your phytosanitary certificate or you stand to lose your whole consignment. Not that it's viable to import basil, egg plants and a few other vegetables now though, as the FSA expect us to pay £400 to send them by courier to Cambridge to be tested for pesticides, and this applies whether you've brought in 1kg or a tonne. To be fair though, it's only that a lot of these checks and delays happen though, because some of the pests which could be on the veg could be very dangerous to the farmers of southern Europe, if they manage to survive our climate and make themselves down there. The streets may be flooded with heroin and crack cocaine, but we can all sleep at night, knowing that our eggplants and basil have been thoroughly inspected by Her Majesty's inspectors. One more thing though - don't think about complaining at the length of time taken to inspect your goods or, especially, the amount of time taken by HMRC to actually clear your goods once the inspections are completed. For a start they are not answerable to anybody, and secondly, make too much noise and you are guaranteed to be at the back of the queue for future inspections and clearance for ever more. To cap it all, DEFRA send a bill for every inspection.

  • Comment number 89.

    It's fine to cut the red tape, what about the finances the small company requires, with public cash handouts to the banks can we do the same again, that's what is needed. Require, banks to pay back all loans within a few months - use the money to get business off the ground.

  • Comment number 90.

    Why all this fuss and bother over "Small business" Let us not forget that in the mid 1930's these same enterprises were begging the then Tory Government to exempt children in "the North" from staying on at school till they were 12 as "Employers needed small hands to work their machines" Much is made on this post concerning "business taxes and (high wage demands)" Business people,if they were to be given exemption from the few taxes they can not get away with and "relief" from the minimum wage would not invest in the business but would salt away the gainms in off shore accounts to await their "retirement" to the Bahamas. These people must,like their exploited workers pay their taxes. To give "smaal businesses" any more power over their workforce would be as to give carte blanche to greed and exploitation of this class.I have absolutly no time for their bleating there is no such thing as ahard up "small business owner" but there certainly is an underclass of poor souls being led to destruction by "small business owners" who see their workers a sort of milch cow from which all possible labour must be extracted at the lowest cost,in order to raise obscene profit levels to fund "small business" luxury life styles in their second and indeed third homes in far off lands where they have managed to establish Non Dom status. Enough of these people.

  • Comment number 91.

    "15. At 12:31pm on 01 Nov 2010, non-vernacular wrote:
    As a professional services company I find it very annoying that tax is calculated from the point of invoice rather than when the funds are received from the client.

    Given the payment terms some of my customers work to now this can mean paying tax on revenue two or even three months before we receive payment.

    All very annoying and means that for some larger projects we have to raid our reserves simply to cover tax payments in advance of client payment."

    -----------------

    Depending on the turnover of your company, you can use the cash accounting scheme for VAT where you *do* pay when payment is received.

    Otherwise you're right. At the last company I worked for, I would pay all suppliers based on their payment terms; but the majority of companies probably pay at the end of the following month - purely as it's most convenient for them.

  • Comment number 92.

    Lord Young's had one go at this already, when He was Secreary of State for Trade and industry in the Thatcher Government at the end of the 80's. It was called the Enterprise Initiative, to give small firms help through Government-sposored consultancy from current and retired business people. Big expenditure; TV adverts (remember the whooshing arrow?), flash logos.
    I never saw the outcome, but if it was succeessful, why the need to ask him back? And equally if it wasn't successful- why ask him back to do it again?
    One of the worst problems is something Government can't do much about - late payment by customers.

  • Comment number 93.

    81. At 4:30pm on 01 Nov 2010, Kuradi Vitukari wrote:

    "
    76. At 4:06pm on 01 Nov 2010, Planet Mars wrote:

    What problems do small firms face?

    Monopolies.
    "

    Name some Monopolies, other than the water companies and train companies.

    //////////////////////////////////////////////////////////////////////////

    I imagine the poster was referring to Business Oligarchies. You only have to look at the High Street to see what the big three supermarkets have done to independent retailing (and some would say the fabric of contemporary British towns). There is a reason why the majority of the shop fronts are boarded up in my town. Sadly we are all complicit in this as we are suckered in by cheap imported goods and don't look at the social and economic consequences of the destruction of the independent retailer.

  • Comment number 94.

    Small businesses are, as supported by FSB figure, the backbone of the economy. The main reasons for starting SmallCo have been aired already. The problems that we face are (in no specific order): unfair pressures by Govt on issues such as red-tape, taxation and allowable business expenses (Directors vs MP's - no similarity); illegal preferences given to BigCo in legal, taxation (avoidance) and uncompetitive practice issues; uneven dealings with banks and financial institutions, regarding loans, cash-flow easement and debt management; and no political support.
    The country's backbone needs special assistance measures just to be able to compete.

  • Comment number 95.

    I worked for a small plumbing firm and it was a constant battle to keep the bank happy.

    The yearly fee for arranging an overdraft leapt from £500 per annum to £1500 without any warning or explanation. When the bank was challenged about the increase they claimed a mistake had been made and they would refund £1000. Despite letters and phonecalls the money never materialised and my boss was eventually told the time to appeal had run out and basically it was tough.

    There needs to be legislation to help small businesses stay oin business and for banks to give as much help ad support to financially viable firms. The Goverment should stop talking tough and take some decisive action instead of creating jobs for the boys.

    How many small firms will go under because of the banks treatment of them?

  • Comment number 96.

    I would suggest the biggest problem small businesses face is aging and entrenched capitalism causing increasingly severe barriers to entry through massive, established economies of scale. Hegemonies abound.

    That said, it can be done; it's just harder as time goes on.

    The nature of the business can offset this somewhat - new ideas are still appearing in new communications media all the time - ask the instant billionaire creators of google/amazon/ebay/twitter/facebook ...

    Nevertheless, for the generational grocer the picture is bleak - become a "purveyor of boutique comestibles" perhaps, or be known as the corner shop that sells booze at 6am on a Sunday, or some other desperate measure, or be outflanked at every turn by the giants.

    That's capitalism. The best system anyone has devised to date, but by no means perfect.

  • Comment number 97.

    Wasn't that woman who has just come out of hospital supposed to have cut red tape.
    Old Tory story , never happens, take the "NEST" pension system for example

  • Comment number 98.

    Whilst this is strictly not connected to the blog I would like to see a return to buying british goods, which may in fact mean we might have to start making them! A return to the good old british lion might be good. I always try to support small local businesses as they do not have the advantage of economies of scale that the large companies have. A change in our buying habits is needed to maximise trade here in this country rather than importing so much.

  • Comment number 99.

    "
    93. At 5:40pm on 01 Nov 2010, Pete wrote:

    81. At 4:30pm on 01 Nov 2010, Kuradi Vitukari wrote:

    "
    76. At 4:06pm on 01 Nov 2010, Planet Mars wrote:

    What problems do small firms face?

    Monopolies.
    "

    Name some Monopolies, other than the water companies and train companies.

    //////////////////////////////////////////////////////////////////////////

    I imagine the poster was referring to Business Oligarchies. You only have to look at the High Street to see what the big three supermarkets have done to independent retailing (and some would say the fabric of contemporary British towns). There is a reason why the majority of the shop fronts are boarded up in my town. Sadly we are all complicit in this as we are suckered in by cheap imported goods and don't look at the social and economic consequences of the destruction of the independent retailer.
    "

    Blame the people for this, people what to shop this way, people want cheap, cheap, cheap and this is what the market is given them.

  • Comment number 100.

    "
    95. At 5:46pm on 01 Nov 2010, ziggyboy wrote:

    I worked for a small plumbing firm and it was a constant battle to keep the bank happy.

    The yearly fee for arranging an overdraft leapt from £500 per annum to £1500 without any warning or explanation. When the bank was challenged about the increase they claimed a mistake had been made and they would refund £1000. Despite letters and phonecalls the money never materialised and my boss was eventually told the time to appeal had run out and basically it was tough.

    There needs to be legislation to help small businesses stay oin business and for banks to give as much help ad support to financially viable firms. The Goverment should stop talking tough and take some decisive action instead of creating jobs for the boys.

    How many small firms will go under because of the banks treatment of them?
    "

    That seems really bad. All I can say is that our bank is great and has been since 1983. The few issues we had over the years were sorted without problem in a professional manner, but this is only what we expect.

 

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