Entrepreneurs are the bedrock of our economy, yet all too often their voice is not heard. Smaller businesses make up 61% of the UK’s employment, but this is about more than statistics. Smaller businesses are embedded within the fabric of their communities – they provide a sense of pride in place – they are a platform for social mobility. In short, they get that being part of a community is as much about responsibility as it is prosperity.
Our survey makes for some uncomfortable reading – nearly half of business owners have considered shutting up shop in the last six months alone. Is it any wonder, given the wave of economic, political and social uncertainty they have had to deal with? We must all play our part to help smaller businesses to thrive.
At Sumer, we believe our part is to be a champion for smaller businesses. We’ve got 1,400 talented people from Exeter to Dundee with a single mission – which is to help those businesses fly. Like all enterprises, we too need to make a profit. But we are committed to doing that in a way that recognises our responsibility to our clients and our communities. We are proud to add our voice to the growing call for change – and to give our endorsement to the calls to action in this report.
I would like to thank The Entrepreneurs Network for their tireless work to drive positive change and the 610 business owners who have contributed to this report. Most of all, a huge shout out to my colleagues all around the country – your work makes a difference – thank you.
Warren Mead, Chief Executive Officer, Sumer
Executive summary
Research background
- It’s no secret that Britain is marked by economic inequality between its regions, with large gulfs in metrics like productivity and investment;
- Moreover, economic growth as a whole has been paltry in recent years, and exacerbates policy problems across the board;
- Delivering a meaningful uplift to economic growth will be made far easier if businesses across the length and breadth of Britain are empowered to flourish;
- Understanding what holds businesses back will be core to creating the solutions to help them succeed;
- In order to do that, we undertook an extensive qualitative and quantitative survey of business owners from all twelve regions of the United Kingdom – asking about challenges they currently face, to expectations about the future, to their thoughts about different policies that could make their lives easier;
- In total, we canvassed the opinions of 610 business owners, drawn equally from across the UK – and this report sets out what they told us
Key findings
- By a ratio of more than six to one, entrepreneurs agree that economic inequality between the regions of the UK is a problem;
- More business owners say agree than disagree that they’ve come close to closing in the previous six months, and nearly two in five are currently considering closing up;
- The tax burden is chosen as the single biggest obstacle holding back growth, followed by input costs, difficulties accessing finance and difficulties hiring staff;
- But, there are generally high hopes for the next year among the business community – with most expecting revenues to grow and staff counts to increase, and over half are actively targeting growth as opposed to keeping things stable;
- Underlying this optimism is a belief that key drivers of business success will get better in the coming twelve months – with business owners especially confident that consumer demand, skills availability and local infrastructure will all improve;
- When asked which region they would move their business to if they had to, Greater London stands out as the most popular choice among business owners;
- But, there is widespread rejection of the view that businesses can only fulfil their potential in London, and many more business owners believe their local area has a strong business community than do not.
Policy implications
- Solving these issues will require catch-up growth across the country, but a series of challenges prevent that growth from materialising;
- Learning from our survey about what challenges business owners face, and what solutions they’d support, we suggest following policy proposals:
- Ensure business taxes are competitive – by not raising the headline rate of Corporation Tax any further, and ensuring reform of Capital Gains Tax does not discourage entrepreneurial activity;
- Invest in infrastructure to keep Britain moving – by streamlining the planning process, allowing developers to capture more of the value uplift they create and exploring alternative financing methods to construction;
- Increase the supply of premises to give businesses more space to grow – by liberalising regulations that prevent development and reforming Business Rates to be fairer to businesses of different sizes and to incentivise more productive land use;
- Unleash the next phase of mayoral devolution – by granting ‘London-style’ powers to all metro mayors and examining what fiscal powers could be devolved from Whitehall;
- Make Britain open for business to more of the world – by restarting negotiations on a free trade agreement with the US and offering a Youth Mobility Scheme to the EU and US.
