Business groups have responded to the key announcements made in Chancellor Philip Hammond’s Autumn Budget speech.
Business groups have responded to the key announcements made in Chancellor Philip Hammond’s Autumn Budget speech.
Within his Autumn Budget speech, Chancellor Philip Hammond reported on an economy that continues to grow, continues to create more jobs than ever before and continues to confound those who seek to talk it down.
The Federation of Small Businesses (FSB) has called on the government to consider whether forthcoming rises in the National Living Wage (NLW) rate may need to be delayed if the economy cannot bear the pace of change.
A new study demonstrating the long-term potential of shoestring startups founded on tight budgets has challenged the expectation that a business needs significant financial backing to succeed.
The research, undertaken by Yell Business ahead of Independent Retail Week, surveyed 1,500 small UK business owners to find out how much new ventures were costing to launch.
Some 40 per cent of companies were founded on under £500, while a third managed to take off with funds of just £250. Meanwhile, 93 per cent reported they had recorded a profit in the past year.
Yell Business also surveyed 1,500 UK consumers to gain an insight into attitudes towards the entrepreneurial world.
Over half of the population admitted they had considered starting a company of their own – and almost a third unhappy with their current career – but several risks were commonly cited as holding back a new wave of business owners.
With 40 per cent of the vote, insufficient funding was far and away the biggest barrier to starting a business. A risk of failure was also keeping a quarter of would-be founders from following their dreams, while 23 simply didn’t know where to start.
Commenting on the success of shoestring startups, Mark Clisby, Yell Business marketing director, pointed to inherited funds and redundancy as current catalysts for new founders.
“Hopefully, the positive revelations around low startup cost and high success, will give the inspiration needed to budding entrepreneurs, so that they don’t wait for scenarios like this to happen to them,” he said.
Offering pointers to potential business owners, Clisby said thorough research into the market and taking a digital-first approach were crucial starting points.
“From a website, social media to reviews, this is essential for any business in 2017,” he added.
With 85 per cent of founders claiming their own venture had seen at least moderate growth, the evident success of shoestring startups might be enough to spark those ambitions into life.
One business owner firmly in the 33 per cent is Neil Bainbridge, founder of music PR firm Neighbourhood, a company that has grown to now represent major clients such as Warner Music and Universal Music Group. Bainbridge recalled some of the key early decisions that shaped the future of his firm to offer some advice to aspiring entrepreneurs.
“Founding a company is of course challenging. There is a huge range of assumptions of what needs to be done and in what order. For example, the early predicament of establishing tone and vision for the company you want to grow into over time, yet creating enough flexibility in the brand to avoid suppressing new opportunities and direction.
“As a service-based company the only additional cost to bear was my own solo time and effort, so 99 per cent of any first expenditure was spent with the above in mind. The same rule would have applied if I would have had access to £250 or £2500.
Bainbridge explained that getting the right first impression – in terms of visual aesthetic, tone and guidelines – was essential in those early stages.
“Making the day-one choice of dropping ‘PR’ in the logo of Neighbourhood was one of these decisions. We never want to dilute what we do as a PR agency, so you won’t find us claiming to be marketeers, creatives, SEO consultants or designers as many so-called PR companies do. We were initially conscious of that first perception.
“Public relations by default is a trade that is constantly moving and redefining itself, so our look and logo always needed to accommodate that.
“From an image point of view, Neighbourhood’s company aesthetic fundamentally needed to support the fact that the best work we do is almost invisible. For the first two years of Neighbourhood, we didn’t have a website. Just a holding page with a logo.
“We are all too familiar with the line ‘dress for the job you want, not for the one you have’. I think laying down the foundations of what can become company guidelines can learn a lot from that.”
Megan Allen, founder of Rural Roots PR, was another entrepreneurial publicist who started her business “from scratch” with just £250 in the bank.
“I invested the into the website domain, hosting and some business cards,” Allen told Business Advice, who then had to teach herself to build the company’s website.
“I took a part-time job to help me fund the business as I still had a mortgage to pay, and joined a local networking group. Within three months I’d given up the part-time job and was working for myself full-time,” she added.
“I honestly don’t know what I could have done differently and I’m proud of what I’ve achieved in just over a year.”
Sharing her words of wisdom for fellow founders, Allen said: “Learn as much as you can yourself to start with, and when you’ve got some capital behind you, invest in professional services to boost your business even further.”
high street shoppers
What’s in a name? The long-term success of a high street store, according to a new study revealing the UK’s best small business names.
As a new founder, key early decisions might include a viable growth plan, a thorough understanding of your target market as well as an idea of potential clients and customers. However, research from marketing supplier Vistaprint has now put the name of a business among those essential considerations.
The study surveyed the shopping habits and opinions of 2,000 UK consumers to not only reveal the 20 most unique names, but also highlight the more subtle effects of an unforgettable brand.
Some 40 per cent of respondents said a memorable name would encourage them to enter a shop ahead of a more traditional title. Further, a third of shoppers were likely to recommend a business to a friend if its name left a good impression.
The long-term effect of a uniquely titled store was also confirmed, as one in ten said they could recall a striking name from over a decade ago.
Overall, six in ten high street shoppers favoured creative names over more generic ones.
Commenting on the best small business names, Oliver Harcourt, head of Vistaprint UK, said innovation and imagination were central characteristics of Britain’s entrepreneurs and should be drawn upon from day one.
“Having a creative business name is one example of how you can be more memorable to your customers and stand out from the crowd,” he said.
“Some of the shops from our poll are businesses that are generations old, showing that a catchy name can stand the test of time.”
Looking more closely into the high street power of original and memorable branding, two-thirds of consumers said the ability to raise a smile made a shop more appealing. Meanwhile, half said it made the business easier to remember.
The subconscious impact went even further. A quarter of respondents believed they received better service from a store with a unique name.
“Our survey also found that eight in ten Brits like to try and shop locally where possible,” Harcourt added.
“We’re happy to see local stores keeping up the tradition of having creative and witty names as a way to stand out in their communities. We look forward to seeing many more to come in the future – and we’ve even created a guide to help new businesses come up with a memorable name for themselves.”
The UK campaign will celebrate its fifth anniversary in December
This year’s UK-wide Small Business Saturday campaign will take place on Saturday 2 December, it has been announced.
The campaign, originally founded in the US by American Express in 2010, celebrates Britain’s small and micro businesses and encourages consumers to spend more at small firms.
Now in its fifth year in the UK, Small Business Saturday has become increasingly popular. Hundreds of thousands of businesses now participate every year, while some 80 per cent of local UK authorities now recognise and promote it.
The amount spent by shoppers at small and micro businesses on Small Business Saturday rose by nearly £250m between 2013 and 2016 – an increase of 53 per cent. Last year, an estimated £717 million was spent with small UK businesses on the day itself.
Announcing the date for Small Business Saturday 2017, campaign director Michelle Ovens said: “Our aim this year is to get even more businesses around the UK to experience the effect of Small Business Saturday.
“We have a growing and highly engaged network of small business owners who recognise the benefit of getting involved and making the campaign work for their own companies and in their own communities.”
As well as encouraging consumer spending, the campaign also encourages small business promotion via social media. In 2016, more than 130,000 tweets were sent on Small Business Saturday itself, reaching more than 140m people, with Small Business Saturday UK trending at number one in the UK and at number five globally.
As with previous years, in 2017 events will be planned across Britain in the run-up to and on Small Business Saturday itself, including the return of the annual nationwide bus tour, and the annual search for the Small Biz 100 – the small businesses to be profiled each day in the 100 days leading up to 2 December.
To mark the day, small business owners will be invited to create special events or promotions themselves. The campaign will once again run Inspire, a nationwide series of free workshops run by experts and entrepreneurs for existing and aspiring small business owners.
Commenting on the benefits of last year’s campaign, Rowena Howie, the owner at small London fashion business Revival Retro, said: “Not only did we have more new interest shoppers and higher footfall on Small Business Saturday, we also saw a 35 per cent increase in sales compared with the same Saturday in 2015.”
Carolyn Frank, owner at Libby Butler Jewellers in Helmsley, near York, added that people are more aware of small businesses all year round because Small Business Saturday.
“I think it’s because it’s a genuine grassroots initiative that’s gathered pace so quickly, and it has reminded customers about the great variety and choice that small businesses can offer,” she said.
American Express remains the principle supporter of Small Business Saturday in the UK, but other campaign partners include PRS for Music, Dropbox and Mercedes Benz Vans.
Small Business Saturday is also backed by key business organisations, including the Federation of Small Businesses (FSB) and Enterprise Nation.
HM Revenue & Customs (HMRC) has launched a new Making Tax Digital for Business (MTDfB) pilot scheme, designed to ‘make it easier for customers to get their tax right’.
The launch of the pilot scheme represents HMRC’s next step in moving taxpayers to a fully digital tax system.
From April, businesses and their agents will be invited to sign up to the new service which will allow them to report their income and expenses online.
In addition to being able to make use of accounting software to record their business income and expenses, firms will be permitted to send quarterly summary reports directly from their digital records and sign up to ‘go paperless’.
HMRC states that, based on the information that customers submit, businesses will receive an ‘estimated tax calculation’.
Once the new service has been thoroughly tested by the first group of businesses, HMRC will invite other customers to join the pilot scheme. Upon receiving participants’ feedback, the Revenue will then seek to develop and improve the service.
The Treasury Select Committee has requested an independent review into the estimated costs of mandatory quarterly tax reporting for small firms.
The government’s Making Tax Digital (MTD) plans include requirements for small businesses to submit quarterly tax updates to HM Revenue & Customs (HMRC). However, many believe that the costs of the proposals to firms have been underestimated. Now the committee of MPs has called for an independent review by the Administrative Burdens Advisory Board (ABAB) to properly assess the impact.
The Federation of Small Businesses (FSB) has welcomed the independent review. It recently commissioned an external economics consultancy to provide an estimate of the costs of MTD to small firms. The consultancy found that the average annual cost would be £2,770 per business.
Mike Cherry, National Chairman of the FSB, said: ‘We are delighted to see the Treasury Committee embrace our recommendation for a full pilot of mandatory quarterly tax reporting before MTD is launched.
‘Research commissioned by FSB indicates that HMRC has significantly underestimated the true cost to small businesses of quarterly tax reporting. We therefore fully support the ABAB review and look forward to working with the body to further scrutinise HMRC’s implementation of MTD.’
Last year the ABAB stated that it held ‘significant concerns’ about mandatory quarterly tax reporting, and said that the proposals would be ‘more burdensome than they currently are with increased record keeping and compliance costs’.