Small firms must be able to hire, innovate and be at the heart of communities

With job losses, closures and an uncertain future surrounding many companies, the need for small business support has never been clearer.

Mike Cherry, national chairman of the Federation of Small Businesses, presents his take on the business shifts seen since the coronavirus pandemic hit, what’s being done to support businesses and what the future of working habits could look like.

Managing crises is par for the course in a small business. There are the everyday ones – clients holding up payments, unexpected staff absences, suppliers failing to deliver – and then there are national crises like the one we currently face, which hit the entire business community and wider society as a whole often, sadly, with tragic consequences.

In such circumstances, we small business owners have no choice but to adapt to try and secure the futures of the 17 million people who work in small firms across the UK. From the outset of the coronavirus crisis, we recognised customer safety and the wellbeing of our communities had to be starting points for adjustments; responses to longer-term economic shifts wrought by the pandemic could come later.

“What steps should be taken to ensure small firms can continue to hire, innovate and be at the heart of communities?”

When we spoke to Federation of Small Businesses’ members during the first national lockdown, we found the majority were playing a proactive role in supporting their local communities. As part of their efforts, close to one in four were helping key workers – supplying personal protective equipment, volunteering and providing accommodation – and a similar proportion were making donations to food banks.

We also found that those who were permitted to stay open were shelling out significantly, typically thousands of pounds at a time, to ensure their premises were safe for customers. Money which, it should be said, they have not been able to claim back.

And then there were those who were already thinking about how the crisis will change the business landscape over the long term and responding accordingly. Around one in six were developing their online presence or establishing one for the first time. One in ten had started developing new services and double that number had started offering free home deliveries, prioritising availability to the most vulnerable when doing so.

That was the initial response. The question now is what steps should be taken from here to ensure small firms can continue to hire, innovate and be at the heart of communities?

“We need to encourage those who are out of work to think about starting their own enterprises that are alert to changes”

Thankfully, chancellor Rishi Sunak was swift and ambitious in compiling an initial rescue package in the spring: income support schemes, loan guarantees, cash grants, HM Revenue & Customs deferrals and tax breaks amounting to billions in direct support. His brave response, and subsequent enhancements of support measures, have paved the way for an economic bounce back.

In future, these efforts will need to be fine-tuned to enable entrepreneurs to capitalise on the trends that are set to shape our economy over the next decade.

Two that immediately come to mind are an increased tendency to work from home or remotely and an accelerated shift towards ecommerce and the online provision of services.

“Small business owners have no choice but to adapt to try and secure the futures”

There’s a clear common denominator where making the most of these behavioural changes is concerned: good broadband connectivity. Unfortunately, we are currently languishing in 47th place in the Worldwide Broadband Speed League. Moving up that table should now become a key priority for the government.

Also we have to recognise the existing upward trend in unemployment will continue until at least the end of this year. As such, we need to encourage more of those who are out of work to think about starting their own enterprises that are alert to changes now taking place.

We already have the very successful New Enterprise Allowance and Startup Loan programmes. Now is the time to go one step further with the creation of a Kickstart Startup programme, modelled on the Kickstart employment initiative.

Adapting when faced with crises is a fact of business life. Supporting us to do so today will enable us to protect communities and livelihoods tomorrow.

Excerpt from Raconteur Business Growth & Recovery special report published in The TIMES.

Download the full report for free.