I am nurturing a personal theory about business which in short says that medium-sized businesses will become extinct, overtaken and then usurped by a growing breed of super-agile, better informed, more capable and more competitive small businesses.
Until today my proto-theory stood precariously on three principles (and some of them are admittedly hunches).
I think Osborne’s budget today just gave my theory a fourth leg.
- The prospect of likely though as yet unconfirmed swathes of reporting and regulatory relaxation for small businesses in coming years, saving both small businesses AND the government lots of money – the latter being the clincher.
- Improved access to more affordable and better business management technologies, like -cough- Xero, which provide small businesses with on-demand access to instant and scalable infrastructure, up-to-the-minute operational visibility (with their financial advisors and virtual CFOs on their shoulders) and tons of operating efficiency – UNLIKE medium-sized businesses still running 20+ year old ERP apps whose gnarled roots are so deeply embedded in their processes and operations that their removal fundamentally risks harming the business, or at best will cost thousands to mitigate and years to execute – hence it gets deferred and the roots get to run even deeper, ability to execute all but evaporates.
- The fact that you used to need large chunks of capital to run a medium-sized business, what with all the traditional communications, sales and distribution networks such businesses required to trade, often as mid-supply chain intermediaries. In 2010 you don’t need the same amount of capital nor does the supply chain need lumbering intermediaries whose existence has more to do with tradition than expedience.
- George Osborne’s newly announced ‘think small first’ fiscal support package for startups and small businesses; lower Corporation Tax, NI breaks for startups and Capital Gains relief for small business owners.
I’d say it’s a done deal.