SPOTLIGHT ON BUSINESS SUPPORT

KNOWING HOW TO FIND THE RIGHT SUPPORT IS AN ESSENTIAL SKILL FOR SMALL BUSINESS OWNERS – YOU NEVER KNOW WHEN YOU MIGHT NEED IT. AND WHEN YOU DO NEED IT, YOU MAY NOT HAVE THE GIFT OF TIME TO START LOOKING FOR IT.

FSB DEVELOPMENT MANAGER JENNIFER THOMAS EXPLAINS WHERE TO LOOK

Small business owners make a difference to their community as soon as they start out on their own to when they take on their first employee, grow their business and ultimately their local economy. The most ambitious want to grow from being a small business to one with an international presence – and often they cannot do this alone.

Everyone has different reasons for becoming an entrepreneur but it’s rarely to do with relishing the regulation, tax returns or legal compliance that’s expected of you as a business owner.

It is not always easy – no man is an island they say, and often small businesses need to look outside for the answers, or to even find out what questions they should be asking. This is where business support and advice comes in.

No matter where you are on your business lifecycle or how well you’re doing, every business could benefit from support, whether that’s from peers, business support organisations and membership bodies, or government funded support programmes.

For this first issue of Real Entrepreneurs Magazine, I thought I’d take a look at business support from my perspective, as someone who works with business support providers, whose organisation, the Federation of Small Businesses (FSB), provides its own members business support and who represents those who the support is aimed at.

The Case For Business Support

Research shows that business support and advice can help businesses to improve their productivity and enhance their whole approach. Asking for advice about business growth and training has a positive impact on small business profitability. FSBs research shows that business support helps businesses to comply with regulations and taxation, find financial assistance and business contracts, grow business, take on and manage staff, improve sales and even cope emotionally.

It is critical that small firms know where to look for support and advice. However, the business support landscape in the UK is undergoing changes as the use of European Structural and Investment (ESI) funding for business support ends. As part of the EU, the UK’s ESI funding allocation was worth around £2.1bn per year on average, with around half of this figure (>£1bn) earmarked for ‘enhancing the competitiveness of SMEs’, allocated via the European Regional Development Fund (ERDF). These programmes have then been historically delivered on a local level by local Growth Hubs, Universities and private firms who bid for the contracts.

UK Government has committed to replacing ERDF, along with the European Social Fund (ESF), with a UK Shared Prosperity Fund, which FSB argues needs to at least match if not exceed the amount previously allocated.

WHERE ARE WE MISSING OUT?

Recent research by the Enterprise Research Council (ERC) highlighted that the business support landscape can be complex and confusing, and it’s difficult to know where to look for it.

Qualifying criteria and paperwork can also be a challenge. Some grant funds require a lot of paperwork, an application process and match funding (giving you half the funding for the project, you fund the rest, sometimes only claiming once the money is spent).

Some funded business support programmes are for high growth, scaleups, start-ups, or those with more than five or 10 staff. However, FSB believes that start-ups and those with the potential for high growth need to be supported equally alongside established small businesses that seek more moderate and sustainable growth and who are the steady and essential majority of our businesses. This is where FSB’s local and national lobbying can get involved, to put forward the case for microbusinesses, self-employed and sole traders, ideally using volunteers and real case studies.

If you began a start-up business or were the director of a company at the start of the coronavirus pandemic, then you’ll know only too well how criteria for some support can leave you out in the cold. Business owners with no employees are far more likely to say that the business support advice they received over the pandemic did not help their business, and most likely to say they did not need any support. Microbusinesses are more likely to say they don’t have the time to look around for or take on funded business support, that they are too busy firefighting and working in the business, not on it.

FSB has been behind small businesses every step of the way during COVID-19. In 2020, we answered 147,000 calls to our legal advice line, 45,000 FSB members visited our Legal Hub and downloaded a record 280,000 legal documents or templates for things like new contracts, furlough letters, finance applications and covid regulation guidance. It’s fair to say our small business community was desperately in need of support.

We also set up a Kickstart Scheme gateway to enable SMEs to get involved, and ran over a thousand online events to keep members informed. Our Government lobbying secured £133bn in much-needed financial support for small businesses and the self-employed plus £108 billion in loans/deferrals. We even put forward a full costed directors income support scheme alongside Forgotten Ltd to treasury, doing all we could to highlight the gaps.

Covid forced many small businesses to seek support, and now it’s essential that they receive the right support to recover. With challenges for businesses like economic recovery, cashflow, high debt, tax, rising costs, people, materials and skills shortages, and macro-economic issues that involve small businesses like levelling up and net zero, business support and advice is needed as much as ever. We need government to foster a more entrepreneurial culture, with larger firms helping smaller counterparts, and support those whose businesses fail, but who want to try again.

Where To Find It

Don’t dismiss the opportunity to take outside funding or support, even if you feel you’ve ‘always managed alone’- this could just free you up to spend more time on what you do best!

Historically, many businesses haven’t gone much further than their accountants for business advice and support. Covid meant many businesses looked for support where they hadn’t done so before, from councils, LEPs, Growth Hubs, banks and universities as well as their own membership bodies, and government funded programmes and grants.

The local Growth Hub is a good place to start to find what support is available from local and national support organisations, plus of course, ask your networks, your accountants and advisers, your suppliers and customers what they have found useful.

Networking sometimes provides a group of peers with similar interests and businesses to yours, and now that networking is still virtual, it’s a great time to branch out to regional or even national groups to find the right people to help you.

Good business advice often needs to be there for if or when you ever need it, and it needs to be bespoke, flexible, and easily accessible. FSBs member services far outweigh the £177 initial cost of membership, because we procure them in bulk for all of our members, many other professional bodies may do the same. We receive around 14,000 calls per month to the solicitors on the FSBs legal adviceline, and we have recently passed one million downloads from the hundreds of legal templates from the online Legal Hub. Our Cyber helpline and insurance or Tax Investigation Protection is a good example of a service that’s there is you need it – if and when you need it.

Microbusinesses seek support and advice from a variety of sources, not least their own accountant. However, many say they are unable to dedicate the time or resource away from the core business to explore external support options. In the future, making tax digital and other technologies could play an important role in targeting small businesses with the appropriate information they need at the right time in their business lifecycle.

In the meantime, more needs to be done to ensure that local and national programmes and support are targeted and even ringfenced for the smallest businesses who can make the best use of it.