With the economy back in recession, it is time for the Chancellor to do everything he can in this week’s Budget to help small businesses invest in future growth.
I always point to the unwavering optimism of entrepreneurs and the UK small business community in the face of what can seem like a relentless barrage of one thing after another.
Inflation, unmanageable energy bills and rising staff costs have meant there is no room left for them to step back and plan. And they still get paid late.
Emma Jones calls on Chancellor to do more for small businesses
What does this mean? At Enterprise Nation, entrepreneurs tell us they can’t invest in the skills they need to take their business to the next level. They are in danger of being left behind. They really need to know that there is a light at the end of the tunnel.
Tax cuts are great, joyful in fact, but we all know they are unsustainable. What would have the biggest impact would be something aimed at incentivizing and supporting UK businesses to compete in the next wave of digital change.
Without this form of guided support, the risk is that businesses will continue to struggle, stifling innovation as they try to navigate uncertainty.
It is well documented that meaningful digital adoption remains an issue. Enterprise Nation research has revealed worrying gaps in technology adoption and found that companies could regain up to three and a half weeks of productive work time if they fully adopted even basic technology.
Other research suggests the UK is lagging behind other G7 nations in digital investment and performance, and with the rise of new technologies such as artificial intelligence and virtual and augmented reality, a continued lack of investment could make the gap expand even further.
New research we have conducted with our Tech Hub partners Cisco, Vodafone Business, Google and Sage has further supported these studies.
That research found that more than half (57 percent) are exploring artificial intelligence, but there is an emerging skills and confidence gap that needs to be addressed for founders to truly benefit from adopting the technology.
Skills and confidence also play a critical role in how technology transforms businesses, and the report found both to be low on AI. We need action.
‘Unwavering optimism’: but British small businesses are struggling to innovate in an uncertain environment, according to Enterprise Nation’s Emma Jones
Small businesses owe £32bn in arrears
But there are other factors at play. For example, the Government has made significant progress in solving the late payment problem that disproportionately affects small businesses, but it still needs to go further to help more businesses that rely on prompt payment for their cash flow.
According to recent analysis, £32bn in arrears is owed to small businesses. Enabling small businesses to receive their payments on time could boost the economy by £2.5bn a year. It could make a big difference.
At the same time, increasing government spending on small businesses and purchasing goods and services for SMEs has the power to harness the best of British innovation and accelerate it.
The success of small businesses is intrinsically woven into the fabric of our society and it is our duty to support them in every way possible.
We would also like to see growth support available for small businesses on all high streets. Opening empty storefronts could make growth skills accessible to everyone; Not only that, but it could make ambition and gaining targeted support a normal part of the entrepreneurial journey.
I firmly believe that by addressing these priorities, the Government can contribute significantly to the growth and prosperity of small businesses and prevent UK businesses from falling behind those of other nations.
A thriving small business sector not only drives economic growth but also fosters job creation and innovation, ultimately leading to more prosperous and resilient communities. The success of small businesses is intrinsically woven into the fabric of our society and it is our duty to support them in every way possible.
The Enterprise Nation community tells us they need access to five key resources; access to markets, technology, finance, people and space, these are our key requests.
Five ways to boost small businesses
Market Access: Our key calls include meeting the Government’s ambition to spend 33 per cent of its procurement budget on small businesses and trialling an export tax credit or export vouchers to incentivize exporting among small businesses.
Access to technology: The community is calling for the Government to reward businesses for adopting technology with new financial support and offer targeted tax incentives and time-limited subsidies to support businesses with the cost of adopting technology.
Specifically, the community is calling for increased support of 140 per cent on the first £50,000 of spend on productivity-enhancing digital services, which equates to an additional 40 per cent against standard business spend.
This will enable small businesses to embrace digitalization and take advantage of emerging technology, such as artificial intelligence, to be more productive and grow sustainably.
Give them space: Enterprise Nation calls for empty units on high streets to be converted into places that can be used by small businesses
Access to financing: The community wanted the Government to build on recent progress to end late payments by imposing 30-day deadlines on larger businesses supplying smaller ones, and at the same time expand the Government’s Making Tax Digital scheme to include companies with a turnover of less than £20,000 a year. .
Access to people: Suggested reforms include improving support for older people who want to return to work or become self-employed, carrying out a review into the viability of tax incentives for small businesses to upskill their workforce and reforming the Apprenticeship Levy to allow businesses to transfer a larger portion of their Levy funds directly to the small businesses they partner with.
Access to space: It is about opening up empty and unused spaces, even for shorter leases or temporary use, and a small business incubator on every high street.
The community wants the Government to consider introducing a tax on transfers from commercial to residential properties to discourage tax-motivated moves from commercial to residential properties.
It also wants you to consider scrapping and replacing the business rates system with a tax on underlying land values, not productive investments.
Or, if the business rates system remains in place, freeze them until the Bank of England’s 2 per cent inflation target is met and empower local authorities to have more responsibility over business rates relief and relief for small businesses. , coworking spaces and charities.
Emma Jones is the founder of Enterprise Nation, a support platform that has helped 700,000 people start and grow their small businesses.
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