What does the Autumn Statement (2015) mean for SMALL businesses?

If you own a small business, you’ve probably had many reviews of the Autumn Statement thrust at you through your Inbox, but they’re unlikely to have struck a chord.

So here’s my take from the perspective of the real world of small business- it ignores the strategic, high-finance highlights that have no relevance to us or that don’t have impact until 2025, and concentrates on the smaller more immediate matters, including one that seems to have slipped under the press radar!

First, some good news. Not much publicised but well worth knowing, the Small Business Rate Relief Scheme that was widely expected to be discontinued will carry on for another year. So use it! This isn’t automatic- you might not have to pay your business rates. But you have to apply to your Local Authority to get it, and it can be worth up to £12k a year.

Even more slightly good news… You may have heard about a levy being introduced that will be used to fund Apprenticeships (not quite so good, because scandalously high administration costs of 25% will be stripped off by government). But good because Apprenticeship funding is very useful to small firms. Better because unless your payroll is more that £3m you won’t pay the tax (it doesn’t kick in until 2017 anyway). This decision sends us a signal that Apprenticeships are going to be there for the long-term. So we should use them! You don’t need to allow a College or Training Provider to do the recruitment for you- do it your way (almost certainly better) and introduce an Apprentice to them! Apprenticeships enable you to recruit a new employee, get their formal training funded, and if you wish and they accept it pay a specially low rate of pay. You can even get grant payments of £1,500 for taking people on, for now.

Now slightly bad news- for those companies in the research and development field many InnovateUK grants will become loans. Probably not what you want to hear, but keep a watch via Google and the Innovate UK website.

Finally, I bet you didn’t pick up on this one in any briefings- A sad loss for small firms is the immediate end of the GrowthAccelerator and MAS (Manufacturing Advisory Service) services as a direct result of the spending review. Recently branded under a new “Business Growth Service” badge, these services had been held up as flagships of government support for small business, but are now ditched at a day’s notice without any apparent concern for companies who are in the process of engaging, let alone the staff and finances of the companies who have been delivering the service. In a staggering display of arrogance and absence of any ethical notice period, providers have been instructed to stop taking on more companies. That’s the last thing any of us expected from a Conservative government. I guess and hope that the local impact will be recognised by Local Enterprise Partnerships, and maybe they can fund something similar. How ironic that this job creation initiative will cost hundreds of redundancies across the country. Don’t forget to deduct that from the job creation totals this scheme has already claimed!

Are You Getting Paid On Time?

I’m finding that payments are being received more promptly this year than previously. Certainly that’s my own experience, and many clients tell me the same story. In part this is due to us being more proactive as suppliers in reminding customers of the agreed payment terms (do this BEFORE payment becomes overdue of course!).

I’ve registered for free with the Pay On Time service, and follow their good advice, printing their inoffensive logo on my invoices. This works as a discreet reminder that I’ll enforce rights and charge interest on late payment, without spoiling customer relationships. As part of that commitment, I’m also scrupulous in making sure I pay by own bills within terms- and usually set up an e-payment as soon as I accept an invoice so it’ll arrive in my customers’ account a little earlier than required.

One sector dragging heels seems to be in government contracting. I still regularly hear that sub-contractors are not being paid within terms by some prime contractors. And more often than not, subbies are so dependant upon this low-margin work that they daren’t rock the boat. Well. that’s understandable. So here’s another way of safely blowing the whistle and getting the government to intervene indirectly on your behalf through their “Mystery Shopper” programme. This is operated by the Cabinet Office, headed by Francis Maude, and is one of the ways government are policing the distribution of government contract payments. Tell him (he wants to know!) if you’re being paid late by a prime contractor, and he can arrange a Mystery Shopper exercise to be instigated- this often has the effect of getting prime contractors to honour their commitments. You can contact him by email at psfrancismaude@cabinet-office.gsi.gov.uk

Government Continues to Run Scared of Training Fraud

Well, despite plentiful opportunities for DWP to get a grip on run-away rumours, we see again how politics takes priority over transparency and honesty, and fuels speculation of a cover-up.

Everyone with an interest in government funding and welfare-to-work programmes especially will be well aware of long-standing concerns over fraud allegations at major government contractor A4e.  I’m one of those who sees attempts to suppress and sweep such concerns under the carpet as massively damaging to the industry (see my earlier blog ). Much of my work comes from supporting companies in this sector, so I declare a vested interest not in hushing it up, but in getting it out!

As predicted, the government yesterday put their political interests above the need for honesty when their Select Committee decided to keep new whistleblowers evidence private.

This is after A4e had already claimed they had been “cleared of fraud” by DWP and SFA, and despite DWP yesterday confirming that 11 separate investigations were continuing. And Newsnight got their hands on a leaked A4e internal audit, and  police investigations into allegations of fraud at A4e continues with at least seven arrests made… and … what else?

Come on!  This really does not need sweeping under the carpet.

Chicken or Egg?

I quickly discovered that my latest clients had been in a true chicken and egg situation for some time, and their sitting on the fence could have lost them a market opportunity.

Two owner-directors (husband and wife) had been getting more and more stressed and both knew they’d hit on a great new service linked to another part of their electrical services business. And initial uptake from existing customers to whom they could easily cross-sell was very encouraging.

So why the dilemma?

One was risk-averse. Not unusual, and not unhealthy. But that wasn’t the real sticking point. They and their staff (11 in total) were being run off their feet by the upturn the new service had brought. Mistakes were happening  but fortunately being found before customers found them. They knew this couldn’t be sustained. Wasn’t the answer staring them in the face?

Yes- and they knew it! Of course they needed to take on another member of staff- probably two, and certainly more further down the line. Neither was “up for it” though, and they didn’t talk enough to realise why. The unknown issue was that the other partner was unhappy about taking anyone on just in case it didn’t work out; not because of any financial risk to the business, but because it would be harsh on the new employee. Now that’s a concern I don’t hear too often these days!

A couple of hours later, and after much probing and soul-searching, I’m delighted to say the overly-considerate employer came to terms with the reality that people have to take risks, not just businesses. As long as a recruit knows there’s no guarantee, there’s nothing at all unfair about that; wouldn’t it have been more unfair to deny someone the chance of a new job?

Early days, but the new customer service assistant has already settled in well, and the pressure is starting to be relieved! We’re all optimistic the growth will continue, but if not- would it really be unfair to return someone to the Job Centre? Of course not!

Will we miss Business Link?

I’m sure most small businesses realise that Business Link is well into it’s final wind-down, and will close in November this year. People I’ve spoken to have had pretty inconsistent experiences of Business Link over the years- some will certainly miss a valuable resource, others really couldn’t care less or may be over the moon to see it gone.

Recently the views of people I’m talking to are changing, with more small business owners and managers concluding that the passing of this transient service is sure to leave a big gap. Yes, Business Link’s role changed in recent years and was repositioned as a referral service rather than advisory, and I can understand the politics behind this- at least it became a more consistent offer across the country, even though some- including me- argue it was dumbed down to the lowest common denominator. But love it or hate it, there’s no sign yet of any credible moves in the private sector to fill the gap.

What was it that Business Link did well?

I’d praise it’s unique ability to give a truly impartial, holistic perspective on a business, and persuade an MD to address weaknesses and opportunities they might otherwise have ignored. Who could offer this service in future for free?

Their other big plus has been the website- a huge collection of useful business resources, all for free to users (www.businesslink.gov.uk). This service too is under review- I for one hope it’ll live on after November.