We recently presented our “Small business. Big opportunity” manifesto to the UK Government. In this report, we’ve made some crucial recommendations to deliver meaningful policy support to small businesses – the backbone of our economy.
At Xero, we understand the challenges our small business customers and accounting and bookkeeping partners face. And I’ve met many of you who’ve told me your worries. Take Ben William, a metalworker from Essex. He constantly has to grapple with late payments, and it’s having a huge impact on his mental health.
And while these obstacles change and evolve, their incredible strength and resilience remains. But small businesses need help.
As the Chancellor gets ready to deliver his Autumn Statement tomorrow, we’ve laid out the areas where small businesses need the most support. Only then will they be able to give our economy a much needed boost. Small and medium-sized businesses generated a combined turnover of £2.3 trillion in 2021.
But despite this huge contribution, their needs have been overlooked. Bigger businesses are too often the focus, and this has to change.
Here are our recommendations to lay the road to recovery for small businesses.
Build a growth strategy
Policy decisions are based on data sets which bundle small, medium and large businesses together, resulting in large firms and those with the loudest voices gaining the most sway.
Instead, policy should be developed with small business in mind, recognising the resources they have and the unique challenges they face.
We are calling on governments and industry bodies to use data about small businesses to drive real change specifically for small businesses. Only with this specificity will small business growth be nurtured.
The under-representation of small businesses at the top table also has to be addressed. They need to have the same access to policy makers as larger businesses.
Finally, we ask that the role of “Small Business Minister” be restored, giving the smallest firms an advocate within government.
Tackle late payments
The late payments crisis is one that has afflicted UK small businesses for decades, so we are asking the government to take steps to tackle this with meaningful action.
A full list of our recommendations can be found here, but among them is the request to rename late payment “unapproved debt”, emphasising how larger firms are financing their operations through money that belongs to small businesses.
In addition, more should be done to highlight good practice and expose bad practice, using corporate reputation and publicity as a sanction for those who persistently pay their small suppliers late.
For the sake of small businesses and our economy as a whole, this must be addressed.
Make the most of accountants and bookkeepers
For many small business owners, accountants act as their most trusted advisors. But others may not be aware of just how helpful they can be, facing significant pressure without knowing where to turn for expertise and support.
This is why we’re requesting the government and business advisory community do more to encourage small business owners to take full advantage of the brilliance of accountants.
They can do this by running a national promotional campaign to encourage small business owners to work with an accountant, or increasing education and training for current and future accountants.
At a time where small businesses need all the help they can get, accountants are ready to help lift this burden.
Build essential skills and digital infrastructure
Digital tools can make a huge difference for small businesses, driving efficiency and making light of once-onerous processes.
But a skills gap exists among small businesses, with many owners struggling to capitalise on the benefits new technologies can offer. In fact, one in three micro businesses find the volume of new technologies stressful to use.
It’s time steps are taken to bridge this gap. We have made a number of recommendations, including writing off digital investments to help small businesses move online or to remote operations, and improving digital awareness by providing access to digital, financial, and business training.
Now more than ever, small businesses need our support. We know that government policy is yet to fully reflect your needs during these incredibly challenging times.
We will continue to work tirelessly to make this support a reality, and pave the road to recovery for small businesses in the UK.