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Viewpoint: Give our SMEs a chance

15 April 2016
Viewpoint: Give our SMEs a chance

Small businesses need a helping hand into established spaces, but they can offer innovation in return, says Neller Davies director Julian Fris

The government's latest budget proved to be a ‘winner' for many small and medium-sized enterprises (SMEs) who, some argue, have had little to cheer about in recent times.

Business rate exemption, capital gains tax concessions and pending cuts in corporation tax were all welcomed by a large number of companies.

However, is that enough to safeguard the healthy growth of enterprise in the UK? What can we, as an industry, be doing to encourage more smaller businesses to thrive?

I think it's about enabling better access to the market. If you take retail as an example, recent research by the Local Data Company and the British Independent Retailers Association has shown that the rate of independent shop openings has fallen from 11 stores a day in 2010 to one a week in 2015. Increasing business rates coupled with difficulty in securing bank lending have meant smaller players find it difficult to compete.

According to Plimsoll research, larger companies have grown 8.2% since 2006, while there has been no overall growth for smaller firms with less than £2m annual turnover. A healthy sector needs a mix of established larger players and smaller independents snapping at their heels.

We've seen various initiatives to encourage more small traders into this market; some succeed, such as street-food concepts or themed pop-ups, but others struggle to make ends meet. To redress the balance, we've introduced the 'Operators Choice' model, which has been really well-received by customers, clients and suppliers.

It is a pretty straightforward concept. We offer bidders tendering opportunities in the business and industry, healthcare, government or education sectors. While brands are not discouraged, because they attract customers, we ask that 25% of the total offer must be provided by independent traders.

The main operator is responsible for the management, pre-vetting (ie hazard analysis critical control point and disclosure and barring service checking) and service standards. Fundamentally, SMEs must be given key spots to trade and not be hidden away.

This gives smaller independents access to contracts, venues and buildings they'd never usually get a look in, along with the watchful support of experienced providers.

It creates an environment where the SMEs' passion is showcased as well as providing the larger players with access to entrepreneurs and innovation, and a concession fee or a fair profit share for their effort.

We can look to the government to support our brilliant SMEs through legislation, but it is up to us as an industry to encourage and continue to provide the opportunity for these businesses to shine. As the saying goes, 'you have to be in it, to win it'. We need to make sure we have more players 'in it'.

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