The past few years have been tough on the UK’s small businesses, but there are green shoots appearing after the austerity years and Britain is shaping up to be a great place to do business.
The Federation for Small Businesses’ (FSB) recent findings illustrate why UK businesses are feeling more upbeat. Forty per cent of small businesses reported an increase in revenues over the third quarter of 2013 and the BDRC Finance Monitor found that 51% of businesses are looking to expand over the next 12 months. Some are already doing so as the FSB says that 15% of businesses have increased their number of employees in Q3 of 2013.
This growth has been spurred on by an easing of the funding situation, with the introduction of new funding vehicles such as crowdfunding, plus initiatives by the government to try to free up finance for SMEs, such as the Business Finance Partnership scheme, which has unlocked more than £870 million in new lending in the past seven months and the Funding for Lending scheme, which has freed up more money for SMEs.
However, while it may never have been a better time to do business here, there are some notes of caution to be sounded. To ensure that the gains in the UK economy go from strength to strength, it is vital that growth is seen in the right areas.
HSBC pointed out to the chancellor George Osborne, that while the service industry sector had grown back to its pre-recession level, manufacturing was still 10% down. One area that could give this sector the boost it needs is exports. HSBC says that a 5% increase in exports from British SMEs could add as much as £30 billion to GDP. To help boost exports the bank has put aside £5 billion to help UK companies to expand abroad.
There is certainly plenty of potential to shore up economic growth with an increase in exports, but where to sell is another important question. Foreign Secretary, William Hague, has emphasized the need to look for new emerging markets to boost exports.
While the potential in the BRIC group of countries (Brazil, Russia, India and China) is still worth exploring, Hague was keen to encourage UK companies to also look to Asian, African and Latin American markets to boost exports. This is in light of new information from the IMF, which has admitted it placed too high a value on BRIC countries.
Chris Chapman
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