Andy Willox, Scottish Policy Convenor for the Federation of Small Businesses
If you run a small firm, you, like me, might have found five minutes while digesting the leftover turkey to think about your 2013 business ambitions.
While I imagine that few business plans written between sherries should be relied upon, I know that other opportunities to reflect during the year can be few and far between.
Our research suggests that Scottish FSB members ended 2012 with more confidence for the year ahead than they had at the end of 2011. But what can be done to convert this confidence into tangible success for small businesses?
Further, by helping small firms succeed and grow, can we help solve some other problems with which Scotland is faced?
For example, some home-based entrepreneurs might have found themselves tripping over business stock or paperwork while handing round the mince pies and thought that it was time to get dedicated premises.
Moving into your first premises is a key stage in the growth of any business. And, if we get more home-based businesses into some of the empty units on our high streets, we can become proud of our town centres again.
Moves such as rates discount schemes will encourage more businesses to bring empty shops or offices back into use.
But, when the Scottish Government’s Town Centre Review Group reports later this year, we must see a renewed focus on getting as broad a range of businesses as possible trading in our towns – and that means ensuring businesses have access to the sort and size of premises they actually need.
By diversifying the sort of employers we have on our high streets, both private and public sector, small and large, we can help to support the remaining independent retailers while injecting new life into our towns.
Growing businesses require larger teams and we know that our smallest businesses have the potential to recruit more people than they currently do.
Yet, every one of us who is an employer also knows that taking on staff – particularly your first member of staff – is often a daunting milestone.
Expanding the workforce in businesses with a handful of staff can change the character of that business and dramatically increase their capacity.
The latest research from the FSB shows that Scotland’s smallest businesses could be assisted to take on more staff if they were helped with some practical support.
So we need to see resources diverted from existing Scottish employment schemes towards projects better tailored to the business needs of the smallest employers. That way, we not only grow our businesses but will also shorten our dole queues.
Our research also shows that by the end of last year many Federation of Small Businesses members were under pressure from rising overheads.
Fuel and utilities were causing the biggest headaches and our members in Scotland were feeling the pinch disproportionally, with 73 per cent of Scottish FSB members report that the cost of running their business rose during the final quarter of 2012.
Individual businesses are, I know, researching innovative ways to increase their margins by becoming as efficient as possible.
While the Chancellor’s decision to cancel the proposed fuel duty increase in January is welcome, more needs to be done in 2013 to give firms some certainty over costs.
With overheads rising at their current rate, businesses are having to work even harder just to stay still afloat and this will, no doubt, be having an effect on many businesses’ expansion plans.
A loss of consumer confidence led to our members’ capital investment intentions falling in the third quarter of 2012 and, although rallying towards the end of the year, latest figures show that investment intentions among in Scotland remain lower than in the UK as a whole.
The Chancellor’s decision in the Autumn Statement to increase the Annual Investment Allowance from £25,000 a year to £250,000 will therefore allow businesses to write off much more investment against tax and could boost capital spending in 2013.
Naturally, individual firms’ prospects are based upon any number of factors which are rightly outside the scope of any government to change. And some will doubtless greet our calls for better targeted support as variously insufficient, impractical or overgenerous.
However, I do think that if we make the path of small business growth a little easier to tread, we can grow the economy while tackling some of the country’s other pressing problems.
Andy Willox is Scottish Policy Convenor for the Federation of Small Businesses