The Forum of Private Business (FPB) is highlighting research showing that the credit crunch is likely to get worse for small businesses before it gets better. Research carried out by the Small Enterprise Research Team (SERT) indicates that the sales expectations of small firms have dropped to a six-year low.
The percentage of respondents expecting an increase in sales fell from almost 35% in the first quarter of 2003 to near 0% in the same period of 2008. The survey revealed that 88% of small business believe the Government does not understand them well enough to regulate effectively. In addition, 61% of small businesses are spending longer on complying with regulations, with the majority believing legislation to be unclear and complicated.
“It is clear from this SERT research that small firms are feeling vulnerable and less optimistic about the future,” said Phil McCabe, the FPB’s spokesperson. “The research also highlights the growing feeling among smaller businesses that the endless amount of paperwork they have to process is a significant barrier to growth.”
The FPB is urging the Government to better support small firms as the credit crunch begins to bite by removing this burden of red tape.
The SERT reported that 61% of small firms spend on average 5.4 hours on paperwork. This figure almost doubles to 9.7 hours when the business-owner is a sole trader. In its 2007 Cost of Compliance survey, the FPB found that its members spend on average 14 hours per month trawling through specifically health and safety red tape.
It was recently revealed that the Prime Minister, the Rt Hon Gordon Brown MP, has set a new record in the number of laws he has passed. Mr Brown introduced a record-breaking 2,823 laws in his first year as Prime Minister, beating his predecessor Tony Blair, as well as John Major and Margret Thatcher. The FPB is concerned that, in this light, the Government will not meet the European Union (EU) target to cut red tape by 25% by 2010.
With worsening economic conditions and the fall in consumer confidence, the FPB is warning small firms to be prepared for tougher times ahead. Businesses can benefit from the FPB’s range of user-friendly guides, including Costs Controls and Profit, the Complete Business Checklist, in addition to its Employment and Health & Safety Guides.
Small firms can also take advantage of the FPB’s range of money-saving products and services. FPB members save thousands per year when insuring their businesses, raising asset and invoice finance, and arranging business telecoms, business monitoring and legal expenses insurance.
Other savings include utilities, card processing, purchasing, payroll service, pay-as-you-go business software rental, business rates appeal and mobile card terminals. The FPB is also supporting small firms’ efforts to comply with their environmental responsibilities through Green Buying.