Small firms have been resilient but economy stalling those that look to grow over the next year
- Published on Tuesday, 21 February 2012 10:55
- Posted by Scott Buckler
Despite tough economic conditions, new figures show that seven in 10 small businesses have introduced new or improved products and services over the past two years, but the economy is preventing six in 10 from achieving growth this year, new figures from the Federation of Small Businesses (FSB) show
In the ‘Voice of Small Business' Member Survey, 68 per cent of small businesses have introduced new or improved products or services over the past two years – 15 per cent higher than in 2009 showing that small businesses have been resilient during the downturn. And positively, 58 per cent of small firms said they are looking to grow over the next 12 months – 43 per cent moderately and 11 per cent rapidly.
Of the 11,000 respondents to the survey, three quarters (74%) want to increase their client base, 57 per cent said they expect to increase their online presence and a quarter (26%) want to increase their staff base.However, two thirds said that economy is the biggest barrier in achieving this, 16 per cent say broadband is a barrier, more than a third (36%) say employment taxes are a barrier and 13 per cent say recruiting and training is a barrier.
The FSB has been calling on the Government to turn words into action and take a giant leap so that small firms can grow. The FSB is urging Government to:
- Set out a clear commitment to deploy superfast broadband across all of the UK and say how it will avoid a two-tier broadband access in rural and urban areas
- Be bolder in its changes to existing employment law to incentivise employment and think small first when it responds to the Modern Workplaces consultation
- Ensure that all public agencies follow the lead of central Government and pay all invoices to small firms within 10 days and that all contractors that the public sector uses pay their sub-contractors within the same time as 41 per cent say cash-flow is a barrier
- Bring down the barriers that stop small businesses getting their fair share of Government procurement contracts. Six in 10 of our members say there are barriers for small firms in bidding for public sector contracts
- Simplify the tax regime which is a barrier for 38 per cent of small businesses
- Promote alternative sources of finance: obtaining finance is a barrier for 21 per cent of small firms
John Walker, National Chairman, Federation of Small Businesses, said:
"These figures show that the small business community has remained resilient even in the ongoing tough economic climate. The smallest businesses have remained focused on growth and shown tenacity in bringing new products and services to market.
"With businesses confidence at a low, it is not surprising that the state of the economy is seen as the biggest obstacle to achieving growth over the next 12 months. The Government must take some big leaps and introduce bold measures to drive growth.
"In the forthcoming Budget, the Chancellor must ratchet up the growth agenda by simplifying the tax regime, promoting alternative sources of finance and thinking small first when making changes to employment law. Small businesses are committed and resilient, but they now need the Government to match their ambition for growth."