The Budget on Wednesday by new Chancellor of the Exchequer Rachel Reeves, the first by a Labour government in 14 years, is creating a certain degree of nervousness in our business community, as it is expected to address significant financial challenges.
Again, at the risk of being too repetitive, it’s worth noting that 89% of businesses in Northern Ireland have less than 10 employees and collectively they employ over 120,000 people and generate around £2 billion in turnover each year.
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This eco system is, without doubt, making a significant contribution to our economy and directly funding public services and job creation in our community.
So it is therefore incumbent on Rachel Reeves that there is value placed on the needs that are important to this sector by supporting their development and growth for the sake of our economy and public services.
Finance is the food for any business, without which there is no survival. The Budget has the opportunity to show it understands that micro businesses are not always able to provide long trading histories or significant capital security, to secure funding, in the same way as their larger counterparts.
Our small businesses need easier, improved access to finance with more creative, low interest loans and more focussed grants and seed funding.
Small businesses are overburdened with administration and meeting the monitoring and evaluation requirements from government. Simplified tax compliance with either free or subsidised accounting services would go a long way to removing this burden and enable small business owners to get on with increasing productivity and sales.
There is no request to be exempt, just a helping hand to meet the growing requirements of form filling and returns.
The most significant decision a micro business leader will make when expanding the business, is whether to invest in new employment. This is because the increased financial burden is a risk and sales may or may not increase enough to cover this burden.
There is also the increased time demand of the induction and introduction of the new employee into the business regardless of the role or level in the company.
Expanding incentives for hiring apprentices can help micro businesses build a skilled workforce while reducing labour costs. The ability to combine support for the employee with support experts, along with financial incentives to employ, will go a long way to support higher levels of recruitment across the micro business sector.
Investment in training and development is a significant cost for a small business in both direct training costs and the indirect productivity downtime involved in the training and development process. There are currently some initiatives to support the upskilling of employees only.
The Budget could take the opportunity to increase these incentives to recognise the indirect cost as well as widening the remit to improve the skills of the business leaders – a fundamentally important member of the team.
Innovation is essential for the sustainability and growth of micro businesses. By leveraging new ideas, processes, and technologies, micro enterprises can carve out a competitive niche, improve customer satisfaction, and thrive in competitive markets.
There is an opportunity in the budget to recognise that innovation in a micro business is not always bells and whistles R&D. Small businesses often take on incremental innovation and make small, continuous improvements to existing products or services that don’t require too much additional know how or external involvement.
Switching to energy-efficient equipment is a prime example, in order to reduce energy consumption, cuts costs, and make production processes more eco-friendly.
This type of investment is often internally generated and relatively small scale for a larger business but a key decision, with financial commitment in a micro business. This could be encouraged in micro businesses, so they remain competitive and responsive to market changes.
By recognising these measures, Rachel Reeves can make a difference and create a more conducive environment for micro businesses here to thrive, fostering innovation and job creation. I suppose we’ll just have to wait and see.
- Michelle Lestas is founder and CEO of the MENTupLEADup technique, published author of “In Business With Yourself” (Orpen Press) and a business turnaround specialist
