Small firms told to look at training for new year

Dec 30 2008 by Karen Dent, The Journal

THE attitude of the banks and concerns about market share are among the major issues facing small business support and lobby groups as they look ahead to the new year, as Karen Dent reports.

THE plight of hard-pressed SMEs finally made it to the top of the Government’s agenda this year with measures designed to help small firms announced in October and in November’s Pre-Budget Report.

The main complaint from small firms was the lack of available finance, with many reporting higher interest rates for loans and overdrafts while others saw the withdrawal of money that had already been promised.

In October, ministers pledged to pay suppliers within 10 days to help ease cashflow and promised to invest more in training.

A forum for small enterprises and the banks was set up and the Government ordered banks to return lending to small firms to 2007 levels as a condition of its £37bn bailout of the sector.

Chancellor Alistair Darling promised greater flexibility and more time to pay taxes, including VAT, corporation tax, income tax and national insurance in November’s Pre-Budget Report.

He also froze the small business rate of corporation tax for 2009 and ordered a 2009/10 holiday on business rates for empty commercial properties with a rateable value below £15,000.

But the Federation of Small Business said the measures have not yet filtered through.

FSB regional chairman Colin Stratton said: “We are still waiting to see a response. Like everything else, it takes time for the cogs to turn.

“But there have been bright spots. At last there has been a recognition by the Government that the small business sector is driving the economy and is the backbone of the country. People think business and they think of big industry but more than 50% of GDP is now down to small businesses.”

Mr Stratton said it was essential that small firms remained at the forefront of Government policy during 2009.

“We’d like to see a bit more response from the banks and some money going back into the infrastructure from the Government, to provide money, jobs and sustainability,” he said.

“It’s time we started to talk ourselves out of this (downturn). We need to put a smile on our faces and get on with it. That’s what small businesses do.”

South Tyneside-based enterprise company Tedco is concentrating on improving sales skills and teaching firms about their market share going into the new year.

Business support manager Carole White said small suppliers are realising they must expand their customer base and not put all of their eggs in one basket.

“They don’t have a clue about their market share or who their competition is,” she said.

“But quite a few believe if they could sell, they could be expanding. It is a trend we have noticed over the last few months. I think businesses are starting to realise that to survive they have to start selling but they don’t know how to get started.”

She said there was a great need for accessible sales training in the region but insisted the economic downturn should not put people off considering starting a business or expanding their existing enterprise.

“As a business you should exploit opportunities. Very often if you can spot a gap in the market, it is a really good time to start a business,” she said.

Business Link echoed that view. Alastair MacColl, chief executive of Business & Enterprise North East, which operates the region’s Business Link service, said: “The year has been a very busy year and obviously businesses have found it to be an extremely challenging year.

“We’ve seen no reduction in the appetite of people for starting businesses. We have been working with a substantial number of businesses that are investing and focusing on growth.”

But as the downturn started to bite, Business Link started to work closely with One North East to tailor services to meet people’s needs. Mr MacColl believes training remains essential despite the economic difficulties.

He said: “We anticipate the economy still providing a real challenge but it is very important that businesses continue to invest in training and development, to make sure their businesses are more efficient and so in a better position when things do pick up.”