SME Business News

A recent survey on the UK Business Forum asked the question, “Has The Slowdown Affected Your Turnover’”

Results from the poll showed that 40% of small business owners report that turnover has actually increased during the first part of this year.

However. of those that are seeing a growth in business the majority admit to being more proactive than in previous years, targeting areas of their market where they are confident of growing business.

25% of respondents reported that business was down slightly with 20% admitting to a significant drop in turnover. The balance of 15%have not seen any change in the turnover of their business.

All business owners are facing a tough time, with general reports of customers constantly looking for a bargain, extra discount or haggling over prices and free inclusions.

There appears to be more competition for business from larger companies who are often better placed to offer customers better prices and as always in recession will take business at any cost. But there is also a general feeling that customers prefer to deal with smaller businesses where they invariably get a better service and personal attention.

So the message to SMEs is don’t just lie there and accept it, be proactive and seek out areas of business where you can offer a niche or unique service if possible. But the main thing is to keep in constant touch with current and possible new clients, talk to them and reassure them that you will be there when they need you.

The Federation Of Small Businesses is calling on the government to maintain and improve a successful scheme that rewards local authorities for supporting SMEs and entrepreneurs.

The FSB says that the government should recognise the success of the Local Authority Business Growth Incentive Scheme by extending it’s life span.

Instead there are plans to bring in a new scheme that would reduce the amount of money that is put into the scheme by two thirds.

Over the last three years Local Authorities have received government payouts of £300million per year for successfully promoting economic growth in their area. Plans to reduce the funding to £100million has infuriated FSB who see the figure as inadequate.

The original scheme was a success and should be extended, argue the FSB:

“The LABGI scheme has been a great success and should be extended in its present form. It has encouraged councils to work harder to support economic and business development in local areas.

“But the money it raises must not get lost in council finances. It should be ring-fenced to support the success of local businesses in the future.

“Given the economic hardships that many are facing at the moment, a less generous scheme to support local businesses is exactly the wrong thing to do. Extending and improving the existing LABGI scheme would be a shot in the arm for the 4.5 million small businesses that generate over half of the UK’s wealth.”

When the going gets tough, the tough get going.

With business confidence hitting a three year low it is surprising that a report by Tenon Forum finds that many small business owners are upbeat about their opportunities of exploiting the current situation by winning business from those companies being worst hit by the economic downturn.

Over half of the respondents to the survey expected to take business from rival companies who are struggling to keep pace with the effects of cash flow, 51% saying that they will exploit the situation to build their own business.

A further 36% of those surveyed, consider that they are in a better financial situation than their competitors, and are expecting to show a natural organic growth through the recessionary period.

Tenon Forum’s Carl Jackson has warned SMEs not to be complacent however, saying:

“By ensuring they have robust business plans in place, SME owners should be able to see their business survive and thrive through the tough times that may be ahead.”

The Home Office has announced that it is  ‘naming and shaming’ companies that flout the law by employing illegal immigrants, on it’s website from 19th June.

They have revealed that 35 companies have already been fined, mostly small fast food businesses, with fines ranging from £5,000 to £22,500.

The highest fines have been handed out to Besmullah Car Wash in Newcastle and USA Nails in Leicester-both having three employees not entitled to work in the UK.

More than 200 companies have been fined for hiring illegal labour and 265 fines have been collected since February amassing £2.35million.

Prosecutions already equal ten times those made in 2007 and double the total for the previous decade, officials have revealed.

The named and shamed companies can be viewed here at the UK Borders website.

Funds of £115million, set aside by the government to help SMEs with staff training, has now been transferred to other budgets because of the lack of take up by small companies.

The money has been taken from the governments Train To Gain programme and switched to education and other training schemes, skills minister John Denham revealed.

“We have still not persuaded every employer of the importance of skills. The message has not reached every workplace or every person who could benefit. A third of employers still don’t train their staff. In other organisations, training does not involve everyone.”

“The employers who do not train run real risks with their businesses. Public services who do not train will struggle to provide the quality of service that the taxpayer expects.”

Despite the full allocation of funds not being used, the governments budget for the Train To Gain scheme will curiously rise to £1billion in 2010/11.

The problem for me is that the government is not doing a great job of getting the message across to SMEs. The recent proposals to put all business schemes under one umbrella cannot come to soon, until then how many of us are ignoring government financial help because we do not know it exists?

Credit management company Graydons UK, have warned that on the back of the credit crunch and economic slowdown, SMEs are facing a tough time with suppliers tightening their credit terms or requirements.

Businesses that have been trading for less than 20 months are currently the most likely to suffer, because they are considered to be most at risk from the economic downturn. Some companies are simply saying ‘no’ to new business, says Graydons.

New SMEs can boost their credit rankings by allowing suppliers to run a check on their  home address, while this is unusual and can only be done with the permission of the home owner.

Small business owners are urged to ensure that their customers are paying on time and look out for tell tale sign’s with customers who change their pattern of payment or ask for longer payment terms.

Keeping the cash flowing in a small business is extremely taxing at the best of times, but in times such as these it is imperative to keep on top of it.

Always use a credit management company such as Graydons when accepting new business on account, a few pounds paid for a report could save your business or home.

If you have ever considered expanding your business abroad, setting up offices or trading in the global market place, then you may well consider a visit to the upcoming London Foreign Investors Expo, that takes place on June 24 and 25 at London’s Excel Centre.

The FDI Expo 2008 is aimed at companies who are planning to expand or trade overseas, offering them the opportunity to meet directly with senior representatives of Investment Promotion Agencies from over 45 countries, who are keen to show them what their country can offer their business.

Supported by FDI Magazine (Part of the renowned Financial Times Group), FDI Expo 2008 is the world’s only exhibition dedicated to Foreign Direct Investment.

Whatever the industry sector, FDI Expo provides a one-stop opportunity to make direct contact with Investment Promotion Agencies who want to demonstrate how foreign businesses can prosper in their countries.

Speakers will be available to talk to journalists before and after their seminars. They include: Rob Denman, Editor in Chief and CEO, Pathfinder Business; Lesley Batchelor, Institute of Export; Brendan Dineen, Director 2012 Games; Stephan J. Dreyhaupt, MIGA, The World Bank Group; Mark O’Connell, Chief Executive Officer and founder of OCO Global.

Seminars & Country Presentations

There are over 30 seminars and country specific presentations. Learn about expanding a business into the new emerging markets of Eastern Europe, South America, India, Africa and the Far East. Meet directly with experts and advisors who help leading companies develop their businesses locally.

Need advice and help?

FDI Expo is free for delegates to attend and meet face-to-face with country advisors from UK Trade & Investment and find out how to expand and trade overseas.

FDI Expo offers everything busy executives need to make informed decisions quickly, efficiently and with minimum pressure on their time.

In just one visit they will find fast, accurate, quality information and advice on all aspects of expanding, investing and trading overseas.

As part of his ongoing commitment to promoting entrepreneurship amongst young people, Dragons Den judge Peter Jones has contributed £100,000 to the governments ‘Make Your Mark With A Tenner’ initiative.

The contribution along with government funding will allow 50,000 students to run ‘real life businesses.’ As part of scheme the students are given £10 each on which they must make as much profit as possible in one month.

One of last year’s contestants returned a profit of £410.

Peter Jones is currently working with ministers in creating the National Enterprise Academy, the institution is now looking to open it’s first Academy for an initial trial in January 2009.

Small businesses are getting the lions share of work from the London 2012 Olympics contracts, organisers have claimed.

Of 82% of businesses where employee numbers are known 71% are considered to be SMEs. Around 650 companies have benefited from the project so far worth a total of £2bn.  Almost half of the firms winning business are based outside of London.

The website CompeteFor that publishes details of available contracts, is attracting around 500 registrations a week, 75% from companies employing fifty people or less, with two thirds from outside of the capital.

Experian have delivered a report into the ever growing crime of Identity Fraud in the UK, saying that more than 6,000 sought help from their victims of fraud team in 2007 , an increase from 3,500 in 2006.

It reports that London is the UK’s ID Fraud capital, where residents are twice as likely to become victims compared to the rest of the UK.

SME owners and entrepreneurs earning in excess of £50,000 per annum are the biggest single target for the fraudsters according to the report. They are three times more likely to fall victim to the practise, while corporate directors, and directors of larger enterprises are just behind at two and a half times the average.

Helen Lord, Director of Fraud and Compliance at Experian, comments: “The dramatic increases in identity fraud we have witnessed over the last few years have coincided with the increasing involvement of organised criminals in this space. The rate of identity fraud growth is worrying. Although some people are statistically more likely than others to become a victim, we should all be concerned. We are all potential victims.”