Supporting small firms through the year aheadBy Paul Robins
December 09, 2008
No-one can afford to kid themselves about the seriousness of the situation that lies ahead in 2009.
At every meeting the FSB attends it is told 2009 is going to be “a difficult year”. So for the last quarter of 2008 the FSB has been shouting from the rooftops to make sure the Government helps small firms survive these difficult times.
- In November the FSB took out full page advertisements in many of the national papers calling for a £1 billion survival fund for small firms (0.2 per cent of what the Government gave to the banks).
- Ahead of the pre-budget report, the FSB encouraged members to urge their MPs to support small firms. This had a huge impact on the support given to small firms in the pre-budget report.
- The FSB asked national and local governments to help small firms by paying their bills within 20 days. The Berkshire councils are now considering this request while other councils in the Thames Valley acted upon this immediately.
- In November the FSB launched Bank Watch, asking members to report on how they were being treated by their bank. This information will be fed back to the Government and bankers at a meeting in the new year. Results from the Thames Valley show 49 per cent of respondents reported the cost of existing finance (loans/overdrafts) has increased.
- The FSB has taken part in economic crisis meetings with Reading Borough and West Berkshire Councils and suggested ways they can help local businesses.
- Throughout 2008 the FSB launched its Keep Trade Local campaign, recognising the threat local companies face. To renew the attention to the campaign, the FSB is tabling an Early Day Motion in Parliament which calls on MPs to shop locally for Christmas.
In addition, the FSB is conducting its fortnightly surveys of members to track how the economic situation is affecting them.
So far, more than 70 per cent of members have frozen recruitment, 40 per cent feel less optimistic about the future than two months ago and 30 per cent have faced an increase in the cost of credit.
Moreover, it is as hard as ever for small firms to do business with their own governments, national and local. Three quarters don’t even bother trying to win government contracts because the tendering process is too onerous.
The small business community has had it tough for years. They know you can’t win sustainable business by cutting costs – you do it by providing outstanding service.
And although thwarted by red tape and bureaucracy they show, in the main, passion and commitment for their staff and their customers.
The Bank Watch scheme has confirmed something many small businesses already knew; banks have made it much harder for small firms to access funds and in some cases have increased charges.
Full results of the scheme will be announced in the new year, to coincide with the next meeting of government, bankers and business groups including the FSB.
The FSB was delighted that the Government accepted its proposal of a £1 billion small business survival fund renamed in the pre-budget report as the £1 billion small business finance scheme. However, only half the battle is won.
The FSB is now lobbying hard to make sure this money is available via the banks to those businesses that need it without a drawn-out process.
Everyone faces uncertainty in 2009. But Reading can take comfort from the fact that alongside the big international companies that choose to make it their home, there are many thousands of small firms who sustain the local community and are responsible for the majority of employment – a fact often forgotten by local government when considering the economy.
These small firms adapt their businesses to challenge and change every day and will be the survivors of the future. But they will need help if they are to survive.
The FSB will continue to raise the issues to ensure national and local governments provide help for small firms – but they will also need the help of local communities.
So next time you need to purchase goods or services consider buying locally first.
We can all do our bit to help our local firms through 2009 and ensure we still have choice and variety within our town and communities.