Emma Jones: Five ways the Chancellor can boost small business growth

Emma Jones CBE is the founder and chief executive of the small business network and enterprise support provider Enterprise Nation.

She says Chancellor Kwasi Kwarteng should make it clear that the government will support small businesses…

All eyes will be on the Chancellor on Friday as he delivers what promises to be a seismic ‘fiscal event’, with tax cuts and a historic energy bailout package.

While the government’s mantra is growth, austerity and bailouts of any magnitude will not deliver the incremental change in pace and productivity we need. What small businesses need is a radical growth plan.

The Chancellor will be well aware that budgets, even mini-budgets, offer the opportunity to make early promises, set expectations and set the direction of the journey.

With a tax cut of more than £30bn, the growth trajectory should be a sharp upward curve that creates the conditions for expansion in both the short and long term.

He will also know that supporting start-ups and small businesses future-proofs the economy. With costs rising across all business lines, this community is most at risk and already struggling to thrive.

The government must recognize that allowing this to continue unabated poses a risk to innovation and the economy.

In this decade of change, including the Queen’s profound farewell after seven decades of loving service and a reassuring backdrop of reliable continuity, the government has the opportunity to provide not only the necessary financial support, but also a usher in a new era where small business leaders have room to grow.

So in addition to the national insurance, VAT, income and corporate tax reforms that we’re expecting, we’d like the chancellor to consider some of our ideas about what small businesses need to grow.

1. Make it clear that the government supports small businesses

Excluding an online sales tax at this point could help demonstrate support for small businesses.

The tax may target large platforms, but the unintended consequence will be that the burden is shifted onto thousands of small businesses that use platforms to trade, increasing the already sky-high cost of doing business.

We would like the government to support both businesses and households. According to our latest barometer, 44 percent of small businesses have now started as an afterthought and are operating in-house, putting pressure on consumer energy bills.

The publication of the long-awaited Entrepreneurship Strategy to recognize the positive growth in start-ups and how government policies in areas from finance to housing can create the positive conditions for starting a business from home would also show that the government supports companies.

2. Unleash an export boom

Small businesses have shut down international trade for too long.

It’s time to export and Go Global, and the government can make it happen by reintroducing programs like Tradeshow Access and launching export vouchers that allow small businesses to get advice from a self-funded export specialist.

This would help create the culture in which overseas expansion is an achievable goal.

3. Resolve late payment once and for all

According to an Intuit study, about 65 percent of small business invoices were paid late in May, with an average outstanding amount of £22,700 per business.

The government should make it easier for the Small Business Commissioner to tackle large companies that delay payment and make clearer recommendations to small businesses to ensure they bill with transparent terms and charge interest to those who pay late .

Cash flow is vital for small businesses to avoid entering into expensive and unnecessary financing to fund growth.

4. Increase government spending with small businesses

Our Access All Areas: Government report found that despite its ambition to spend 25 percent of its procurement budget directly on small businesses, the government has so far only managed to spend 10 percent.

Using technology by connecting government first-tier suppliers with suitable subcontractors would help, but also remove the bureaucracy that makes access to life-changing contracts disproportionately difficult for small businesses.

They are small and agile companies that will inject new ideas and innovation into contracts.

5. Maintain continuity and build skills

It may not sound radical, but providing security and reliability is vital for business.

Reducing and changing business support programs has become the new norm. It creates confusion and can lead to business owners withdrawing because they can’t keep up with the programs they qualify for.

Sometimes existing initiatives, such as Help to Grow, that provide access to learning, experienced mentors and digital expertise, need to be maintained and improved as they are only just taking hold.

Supporting the unemployed to become self-employed could also contribute to the drive to enhance the skills that small businesses need to tap into. Unemployment is expected to rise, but there is no specific program to support the transition from unemployment to self-employment since the new enterprise allowance scheme has been abolished.

The Department of Work and Pensions should consider revising the self-employment goals for the Restart program to shift the focus from finding jobs for people to supporting people to create their own jobs.