Focus on: small businesses under the microscope

WHEN T-Mobile called and asked if we wanted to sit in on one of their small business focus groups, we couldn’t say no. This year has been huge for entrepreneurs. The Prime Minister David Cameron passed them the gauntlet, asking them to revive our economy. So important he felt this responsibility, he dedicated his keynote speech at last year’s Conservative party conference to them. He hailed them the nation’s “doers and grafters,” wealth creators who would save us from this dreadful economic mess.

They haven’t had an easy time though. Business taxes, regulation and inflation are high. Europe’s currency and economy are struggling and consumer confidence is weak. There is little wonder that business confidence fell back in July (see the news below). This is why we were thrilled to take part in T-Mobile’s focus group. We wanted to understand what was troubling small businesses most. The entrepreneurs who participated came from varying industries and were at different stages in their development. Here is what we found out when we put them under the microscope.

CONFIDENCE
Owner of a hotel business: “There’s no confidence. Things have got worse this year. Clients are mucking about trying harder to get a cheaper deal. There’s no customer loyalty anymore.”

Owner of beauty product range: “There was all this talk about StartUp Britain and the government reaching out to entrepreneurs that hasn’t materialised. I still don’t know what they were even trying to do.”

Owner of a flooring business: “The country has got no money. The government is doing the best it can with the mess it inherited. I noticed an uptick in business when the coalition came in .”

The UK is ranked as the 16th easiest country in the world to start a business (IFC/World Bank)

BARRIERS TO ENTRY
Owner of a cleaning company: “New businesses could really benefit from some flexibility with contracts when they first start out. If other businesses could provide a six or 12 month break clause, I think more people would give setting up a business a go.”

Owner of beauty product range: “There’s no decent information out there for start-ups. The people who are available to help just tell you to go to the internet and then you have to trawl through unmanageable amounts of information to find what you’re looking for. I’m trying to organise my first export order, but can’t afford professional advice.”

60% of small and medium-sized businesses expect access to capital to be “very hard” in the next year (Investec)

TAX AND REGULATION
Owner of a flooring business: “The government aren’t making it harder for small business to cope with tax and regulation, but they certainly aren’t making it easier. “

“I know the Bribery Act has come into force, but I’m still not entirely sure how it works. Everyone in my business does their best to make their deal look the most attractive to procurement officiers, but I don’t know whether that falls short of the law.”

Owner of beauty product range: “The VAT rise was crippling. It happened too quickly too.”

Owner of a cleaning company: “I hate it when the government keeps changing the taxes. It means we have to keep changing our price – that’s damaging in a highly competitive sector like mine.”

“We feel like we’re constantly fighting the government while trying to stay above board. We keep everyone self-employed to avoid employer’s contributions. We would prefer to employ people as you get greater commitment from those on the payroll, but it is just too expensive in this climate.”

Owner of a hotel business: “We’re becoming ever more like the continent, where you can’t let anyone go. I know the government has loosened up the regulations in this area a bit, but employing people is still a very scary prospect.”

50% of the UK population want to start a business, but only 5.8% are in the process of actually doing so (YouGov)

CULTURE
Owner of a photography business: “Kids coming out of school these days have bad maths and bad grammar – they write like they are texting.”

Owner of a flooring business: “I recently tried to employ a member of staff for my show room. I couldn’t find anyone with the right experience.”

“This country loves a trier though. With the employment situation so bad at the moment, we might see more young people setting up business – they have no choice.”

Owner of beauty product range: “In India, kids are so much more entrepreneurial. There isn’t this nine-to-five culture like there is here.”

“The media needs to highlight more sucessful medium-sized businesses, not just ruthless millionaires. I find that off-putting.”

“The customer service culture is also really bad. Particularly in business-to-business relationships.”

Owner of a plumbing business: “Nobody tells kids at state schools that they can start businesses. Encouragement can go a long way. I take on a few apprentices each year to show a few kids the ropes.”

The UK is ranked as the 2nd easiest country in the world to get credit (IFC/World Bank)