Big Budget for Small Businesses
Few were expecting to be popping Champagne corks in celebration after this week’s budget and, for the harbingers of doom, there was lots of negative news, not least that the growth forecast for 2013 has been revised down to just 0.6%. As always, it can be hard to separate the budget day performance in front of the cameras from what’s actually happening behind the scenes, but one message was communicated very clearly: encouraging small businesses and kick starting growth are high priorities. For the construction sector, the big headline was the planned public investment in road, rail and construction projects, with £3 billion promised for such schemes in 2015-16 and a total of £15 billion channeled into projects by 2020. Clearly, this is great news for the sector, which has struggled to adjust to the dearth of public spending on construction projects since the beginning of the recession. What is less clear is where that money will come from or where those projects will be: for larger companies with a national spread the geography of this investment is not important; for small firms, it could put new opportunities out of reach.
However, as someone who works with SMEs all the time, the best news in the budget was not contained in the headline grabbing £15 billion but in the changes to employers’ National Insurance contributions. We’re promised that 450,000 small firms will no longer have to pay National Insurance contributions, reducing overheads and, vitally, making it more viable to retain staff and employ new people.
For many SMEs staffing decisions have become a chicken and egg trap that makes it difficult to maximize opportunities while managing overheads. But talented people lie at the heart of any successful business and, in hard commercial times, good service is an important differentiator that can only be achieved with the right team in place.
It’s clear that the Government understands the important role that SMEs play in the UK economy, and the budget even included a pledge to increase Government procurement from small firms by 500%. In reality, this is not going to result in big orders for big numbers of companies but it does illustrate an approach that we can all learn from: look for the quick wins – while they may, individually have a small impact, added together the effects could be much greater.