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1 in 2 SMEs Experienced Surge in Cyber-Attacks

Over half of UK SMEs (54%) have experienced some form of cyber-attack in the last year a new report by Vodafone Business has found.

The research, which is published today in a new report from Vodafone ‘The Business of Cybersecurity’, polled over 500 small and medium business owners across the UK and found that more than half (54%) had experienced some form of cyber-attack in the previous 12 months. This is an increase of 15% when compared to similar research conducted by Vodafone two years earlier which found 39% of SMEs had experienced some form of cyber-attack.

The findings point to a rising risk for SMEs to stay safe online, especially with more people working remotely and many businesses reliant on digital technology.

Vodafone’s study also found that one third (33%) of SMEs had seen the number of attempted cyber-attacks against their business increase, whilst just 18% had seen the number go down. About one in five (19%) SMEs said that an average cyber-attack could cost their business up to £4,200, a loss they would be unlikely to bounce back from in the current cost-of-living crisis.

The rise in online attacks comes as ONS (Office for National Statistics) data indicates that more than a third of businesses in the UK now use a hybrid working model. The National Cyber Strategy 2022 has also stated that a growing dependence on digital technologies for remote working and online transactions has “increased exposure to risks”.

Since Vodafone last examined the cybersecurity risks facing SMEs in 2020, the invasion of Ukraine and continuing geopolitical tensions have had an adverse effect on the cybersecurity landscape, prompting the National Cyber Security Centre (NCSC) to warn that: “now is not the time for complacency.”

Despite this, 18% of SMEs polled by Vodafone said their business was not protected with cybersecurity software whilst 5% did not know if they had protection and only 28% were aware of the Government’s Cyber Essentials scheme. The findings echo previous findings Vodafone, such as in last year’s SMEs Like Me report which revealed only 8% of SME business leaders saw cybersecurity as a priority.

To ensure that more SMEs are protected from online attacks, Vodafone is calling on the Government to do more to raise awareness of current initiatives to support the delivery of local cyber security skills. This should include providing the required funding to run a targeted ‘Cyber Safe’ awareness campaign for SMEs.

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Andrew Stevens, Vodafone UK Head of Small and Medium Business said: “Last year we outlined the significant and detrimental impact of a cyber-attack on a small business, to the tune of up to £3,230 per attack. This figure has now subsequently risen to £4,200, which is a consequence from which most SMEs would not recover.

“These findings reflect a lack of adequate skills and information to equip small business owners with sufficient protections and whilst we welcome the progress that has been made by Government with the establishment of nine regional Cyber Resilience Centres across England and Wales, it’s clear that more needs to be done to support SMEs with their cybersecurity and help them protect their business online, especially during a cost-of-living crisis where they are most vulnerable.

Tina McKenzie, Policy Chair of the Federation of Small Businesses (FSB) said: “The digital economy presents a huge opportunity for small firms to reach new markets and customers, but these benefits come with challenges. This report sheds light on how vulnerable small firms become targets of criminals in the cyber space, when they’re often less able to absorb the cost of crime.

“We’re pleased to see a recommendation to raise awareness on cyber resilience among the small business community through relevant Government campaigns included as part of this research.

“We encourage internet service providers to take on more responsibility for cybersecurity, along with software vendors, hardware developers, the banks and other financial intermediaries – they’re the best placed and have the resources to implement the most effective measures.”

By Eva Dixon

Source: Verge

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15 Bright Ideas For Starting A Small Business

More people are deciding to work for themselves – throwing their energy into their own small business in a bid for greater flexibility and control over allocation of their time.

There are more than four million self-employed workers in the UK – a number that has grown steadily over the past two decades.

But if you’re thinking of going it alone, what are the best small business ideas that require minimal set-up costs and professional training? We’ve compiled 15 of the most popular:

1. Tutoring
If you’re an expert in a particular field – whether it’s maths, languages or playing the violin – you could make money teaching.

You don’t need any formal qualifications to be a tutor but some students (or their parents) may expect you to have a degree. Some previous experience of teaching is probably also useful.

Tutoring is now more accessible than ever with remote lessons via Zoom or the like widely accepted. You can also opt to go solo or join a tutoring platform. While you’ll probably have to pay to list online, taking this approach is likely to widen your client base.

2. Pet care
Animal lovers could consider setting up a pet-sitting business – whereby you spend time with clients’ pets while they’re at work or on holiday. This could be at their home or yours.

If you have the space at home for the right equipment you could invest in a grooming business – or, if not, the mobile equivalent. Dog walkers are also in high demand and, other than trust and reliability, don’t require any special credentials.

3. Home cleaning and gardening
Cleaning and gardening is flexible when it comes to earning extra cash. You might want to take your own cleaning supplies (which can be factored into the price) but equally, it’s acceptable to ask the client to provide them.

You can think about adding laundry or ironing services if it might boost your earnings. For gardening, diversification could mean design, landscaping or garden clearance.

4. Cake making
Talented at baking and decorating cakes? Or perhaps artisan sourdough is more up your street? It’s possible to turn skills like this into a successful business.

However, if you’re preparing food in your home to sell to the public you will need a food hygiene certificate and you’ll need to register with the environmental health department at your local council. Think about the best ways to market your new business through local press, for example, and on social media.

5. Personal training
Personal trainers are part workout and part motivational experts. It’s their job to develop workout plans to help clients either lose weight or meet other fitness goals.

Training and qualifications are necessary if you want to work in a gym or as a freelance PT – which will take time and money. But it could pay off, with trainers earning anything from £40 to £50 an hour or more depending on your location and target market. As well as 1-2-1 sessions, you could take group classes and bootcamps, too.

6. Personal assistant services
Workers who thrive on organisation and an Excel spreadsheet could flourish offering services to individuals or businesses and company execs.

Tasks might involve organising a diary or calendar, booking travel and other tickets and appointments, as well as other personal admin tasks which save the client precious time.

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7. Sewing and alterations

If you’re talented with a needle and thread, you could set up a business sewing and making alterations for the many who don’t have the skills.

While alterations alone could keep you busy, you might specialise in a particular area, such as handmade wedding and bridesmaid dresses or dance costumes.

You will need to invest in a high quality sewing machine and some basic materials and supplies. You could look to partner up with a local dry cleaner or laundry business as a way of broadening your client base.

8. Copywriter or editor

Most businesses have an online presence – but many won’t be au fait with blog writing, customer emails or website content. It will need to be written and edited by a professional.

If you have experience in writing, all you’ll need is a laptop and a good internet connection. Many writers and editors market their services on LinkedIn or other business social media groups. You could also directly contact businesses to offer your services.

9. Photographer or videographer

This is a great business for creatives with an eye for composition. You can be a generalist or choose to specialise – such as creating training videos for corporate clients, for example.

You’ll need to invest in some high-quality camera equipment and lighting accessories – or for a videography business, a good digital video camera, lights, microphones and bounce boards to achieve the best quality footage.

10. Bookkeeper

Those who are great with numbers could consider freelance bookkeeping. Bookkeepers sell their services to small businesses that need help managing their accounts, preparing payroll and gathering data for tax purposes.

You’ll need to be well-organised and fully understand the liabilities that can come with handling someone’s finances.

11. Blogger

If you can create a successful blog and build up your subscriber numbers it is possible to monetise it. The most successful bloggers can make an annual salary out of it.

There are different ways to make money from a blog, such as through advertising, affiliate links or subscriptions. Research options and successful blogs and bloggers to find the best route.

12. Removals

If you’re fit, strong and patient, all you’ll need to set up a removals business is a van. However, this line of work is very physically demanding. You’ll also have to be comfortable driving long distances and with busy city driving – as well as parking.

You’ll need liability and van insurance to cover yourself for all eventualities.

13. Market stall

Market stalls can make serious money – if you’re in the right environment with the right products. Whether that’s a food or farmers’ market, antiques or craft fair, you’ll need to book and pay for your pitch, as well as make or source your stock.

14. Setting up a virtual shop

Buying and selling online is probably one of the easiest businesses to start. And finding a market niche should help your business succeed.

If you make your own items to sell you could use Etsy, which is an online marketplace for unique and individual, often handmade goods. Setting up an Etsy shop is straightforward although you’ll need to factor in the transaction fees with each sale.

15. Car cleaning and valeting

This type of business can be set up with very low overheads. You’ll need vehicle cleaning equipment – and your own transportation if you are going to offer a mobile service – but there won’t be many other costs.

Liability and legal expenses insurance are important in case of disputes over accidental damage to customers’ vehicles.

By Jo Thornhill

Source: Forbes

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Budget 2023 what small business can expect

An extension to the ‘super-deduction’ tax break for business investment and tax breaks for companies that help long-term sick and disabled get back into work are being mooted.

This spring’s Budget will focus primarily on halving inflation, the first and most important of Prime Minister Rishi Sunak’s five pledges. But what can small business expect from Budget 2023?

What is the date for the Budget 2023?

Jeremy Hunt is due to make his Budget 2023 statement on Wednesday, March 15. It will be followed by a forecast on the economy and public finances from the Office for Budget Responsibility.

Revamping ‘super-deduction’ tax break

Chancellor Jeremy Hunt and his Treasury team are understood to be looking at a successor to former Chancellor Rishi Sunak’s “super-deduction” tax incentive, a £25 billion tax incentive which encouraged business investment by providing 25p off company tax bills for every pound of qualifying spend on plant and machinery.

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Subsidies for mental health and wellbeing

Work and pensions secretary Mel Stride is reviewing the state of the British workforce ahead of the Budget 2023. One idea is to provide tax breaks to small business owners to help them support the long-term sick and disabled get back into work. There are 2.2 million long-term sick and disabled in the UK. These subsidies would cover physiotherapy, nursing and mental health support.

Digital skills and IT training

Another idea is to offer Government-funded job placements for disability and sickness claimants. The focus is expected to be on digital and IT skills for jobs that can be done remotely – helpful for those who are housebound but want to get back into work

What will not be in Budget 2023 for small business

“Computer says no is just the standard response you get most of the time from the Treasury, but it’s even worse this time round,” one business leader told The Sunday Times. “He mentioned pre-profit taxes, but every time we raise business rates, NICs and duties, the answer is no, it’s not the right time.”

By Tim Adler

Source: Small Business

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How to start a business with no funding

Starting a business with no funding is challenging, but it’s possible. With the right approach and some hard work, you can get your business up and running quickly.

Can I start a business with no money?
In theory, anyone can start a business with no money, and many, many entrepreneurs have done exactly that.

Typically, there are two key parts to successfully launching;

  • Create a business that requires little to no upfront costs
  • Create a clear plan for acquiring paying customers quickly

This will help avoid any cashflow issues and limit any initial risks.

What is the easiest business to start with no money?

The easiest business to start with no money will depend on your skills and resources.

If you’re a skilled writer, graphic designer or web developer, you could offer your services to clients on a freelance basis. This allows you to work to your own schedule and build a client base without having to invest in a costly physical office or staff.

Another option is to start a business that uses your car or even a spare room in your home, to create income. For example, you could start a ride-sharing business or rent out an extra bedroom to paying guests.

What do I need to start my own business?

Once you have your business idea, you will need to take a few important steps.

Firstly, decide on the business structure you would like to use, and register your business. In the UK, the most common business structures are a sole trader, a partnership, and a limited company. Each structure has its own legal and tax implications, so it is important to choose the right one for your business.

Sole trader
As a sole trader, you will be “self employed”, this means you’re solely responsible for all legal requirements of the business. It doesn’t mean you need to work alone, however, because sole traders can also employ staff.

You will need to register with HM Revenue & Customs (HMRC) when you first launch your business and file an annual self-assessment tax return.

You will need to pay income tax and national insurance based on your profits, and crucially, you are responsible (and liable to pay back) any debts accrued by the business.

Partnership
In a partnership business structure, each partner shares responsibility for managing the company, full liability and any profits generated by the business. One partner, known as the nominated partner, will be responsible for the tax returns and bookkeeping of the company.

A partner could be an individual or a limited company for example, because they also count as a legal person.

In an LLP (Limited Liability Partnership), two (or more) partners are responsible for filing the company accounts. The business structure has more similarities to a limited company, in that partners are limited in terms of their liabilities, protecting their assets. Liability is limited to any monies they have invested in the company and any personal loan guarantees from generating funds to start or maintain the business.

Limited company
Creating a limited company involves incorporating your business with companies house, and paying an application fee.

While this is not ideal for people considering starting a business with no money, it has some longer term benefits which should be considered.

The liability of directors and shareholders (meaning any owners of company stock) is limited to any money they originally invested in the business. Your personal assets and estate are not considered part of the business. That means they won’t be used to offset any debts that may need to be recovered in the future, should any issues arise.

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What if I need investment in my new business?

Getting direct investment
To get direct investment to start or grow a small business in the UK, you will need to create a business plan that outlines the key details of your business, including its products or services, target market, financial projections, and growth potential.

This will help you to clearly communicate your vision to potential investors and convince them to invest.

Next, you will need to identify potential investors and reach out to them to pitch your business idea.

This can be done through networking events, online platforms, or by contacting investors directly. You will want to make sure that the investors you approach are a good fit for your business and have the resources and expertise to help you succeed.

Once you have identified potential investors, you will need to negotiate the terms of the investment, including the amount of funding being offered, the equity stake being given up, and the rights and responsibilities of the investors and the business.

It’s important to carefully consider these terms and seek the advice of a legal professional before agreeing to any investment.

EIS and SEIS funding
The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are UK government programs designed to help small, high-risk companies raise capital by offering tax relief to investors who invest in these companies.

Under the EIS and SEIS, investors can receive tax relief on investments they make in qualifying companies. This means that investors can reduce the amount of income tax they owe on their investment, making it more attractive to invest in high-risk companies.

To qualify for EIS or SEIS funding, a company must be a small, unlisted trading company that is not a subsidiary of another company.
The company must also be based in the UK and must not have been trading for more than 7 years.

If a company qualifies for EIS or SEIS funding, it can issue shares to investors and offer them tax relief on their investment.

The amount of tax relief an investor can receive depends on the type of investment and the amount invested;

  • EIS investments – investors can receive up to 30% of their investment in tax relief
  • SEIS investments – investors can receive up to 50% of their investment in tax relief

Getting a business loan
If you need a small amount to get your business started, a loan might be a viable option, rather than giving up any equity to raise funds.

Before applying for a business loan, you will need to consider your options carefully. Think about how much you would like to borrow, how this will be paid back and how long you’d like to borrow for.

You can find out how much you can borrow via a comparison site, broker or directly via a lender or high street bank. Always make sure you compare loan providers to find the best rates before applying.

If your application is approved, the lender will give you the money and you’ll be responsible for repaying the loan according to the terms you agreed on. This will involve making regular payments and paying interest on the loan.

By Laura Rettie

Source: Finance

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Small businesses need new model for growth in recession

Four fifths (81 per cent) of business owners are worried about recession, with small business confidence taking a hit as the nation’s 5.5 million small firms face an array of challenges heading into 2023. A new report from Small Business Britain and TSB Bank has found that concerns about the economy is deterring small businesses from investing in growth, innovation and hiring new talent. However, the report also points to many sources of business opportunity and a determined fight back from the nation’s small business community, with over half of small businesses (52%) signalling that they are experiencing challenges, but pressing on anyway.

The report, which looks at how small businesses can return to growth, underlines the grit and resilience that now characterises Britain’s small business community, as they deal with perpetual change following the pandemic and cost of living crisis.

Over a fifth of small businesses (22%) say Brexit has impacted their business negatively, and 29% of firms have reduced operational spend to respond to difficult conditions. However half have continued to adapt by adding on new revenue streams.

“Small businesses continue to face hugely turbulent times, and many are exhausted from dealing with constant challenges,” said Michelle Ovens CBE, founder of Small Business Britain. “While the prospect of recession is causing much anxiety, there is still a lot of opportunity for small businesses in the UK to drive economic recovery and we need to help them grow in confidence and optimism with tools to help them focus on growth and success.

“Waiting for the ideal market conditions is broadly futile in a world that keeps changing as we have seen over the last three years. Businesses need a model for operating that can survive and thrive during turbulent times.”

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Small Business Britain has launched a guide to help businesses grow during a recession, with identifying new routes to market and focusing on export opportunities identified as key tactics for small businesses to cope with a flat UK market.

“Growing a niche food product during an economic downturn is challenging, as consumers can be cautious with their spending and less likely to try new or specialty items,” said Delight Mapasure, founder of K’s Wors, a South African speciality sausage producer. “This has led us to focus on exploring new opportunities via export markets and we have entered the Middle East and have talks at an advanced stage with India. Being able to reach new customers is vital for us, and other small businesses, to develop, reduce risk and have greater resilience.”

Focusing on digital skills is also highlighted as a priority for growth. The report found that 52 per cent of small businesses have not sharpened technology skills in the last year, and 64 per cent have not been investing in technology tools.

Adeel Hyder, Business Banking Director at TSB Bank said: “There’s no getting away from the fact that the last few years have been tough for many small businesses. The next twelve months will bring further challenges as costs continue to make an impact, and a potential economic downturn is forecast. Despite this, I believe there are many reasons to face the future with optimism.

“It is very often small businesses that lead the way out of a recession, and there are good reasons for that. Small businesses tend to have closer relationships with their customers and partly because of that, they are often better placed to anticipate and adapt to changing needs in the economy. It is clear from the experience of the last few years, that challenges can very often be accompanied by fresh opportunities”.

Source: SME WEB

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5 Tips To Make Your Business Stand Out In A Crowd Of Competitors

Separating your business from the pack is key to success in any industry. How do you make sure your business stands out from the rest? Superb service and product quality are critical, but how your business is marketed and perceived will also decide your success and growth. With that in mind, let’s look at our five tips for helping your business stand out in a crowd of competitors.

Tip 1: Establish Your Selling Point
What actually makes your business special? Why should a consumer choose you over a competitor?

Having an answer to these questions will determine your business’ selling point and is the steppingstone towards proving your ‘why’ to consumers. Establishing this early on is paramount or your confidence as a business owner will be lacklustre.

After your selling point is cemented the next challenge smaller businesses often face is gathering the team to support these operations. This can be mitigated through virtual office providers such as Servcorp which offer businesses a fully trained support team. As a small business, having your own receptionist, secretarial assistance and I.T support without needing to undergo the hiring and training process is a large cost plus time saver – after all, your time is money.

Businesses also receive this staff support at the fraction of the cost they would otherwise be paying.

Tip 2: Present a professional working environment

Many businesses find it challenging to create a professional working environment to impress their clients, especially for newer companies competing in major global markets on a limited budget. Traditional office spaces require long and costly leases, with break-out clauses only every few years, if at all.

A more convenient and cost-effective solution is a serviced office. These can be rented at a far less cost than a traditional office, whilst still being located in major business hubs like London and New York. Moreover, customers will enter an unbranded reception area allowing businesses to imply that they control the entire floor.

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Tip 3: It’s all about Marketing
Your product may be superior to competitors, but it will all be meaningless without adroit messaging and unique marketing. Your business is likely to have thousands of competitors, which is why the first step is to complete a competition analysis.

Comprehensively understanding what your competitors do well, recognising trends and identifying where others are failing will provide your business the strategic insight needed. From this your business will have a decisive direction on its marketing goals, however finding new methods to secure a commercial advantage will accelerate your point of difference.

For example, using a virtual office can provide an established look for smaller businesses based in the UK. With a virtual office your company can legally register its business address as the virtual office’s address.

Tip 4: Always provide excellent customer service
Customers expect and deserve excellent service when dealing with you. Make sure you have processes to deliver the highest quality customer service and ensure that all your staff are trained to meet these expectations.

Whether it’s the front desk staff, your Customer Service team, or a manager calling back, providing the best care for your client will help retain them over the long term. Even an unhappy customer can be won back if the service they receive after a problem is effective and genuine.

Tip 5: Network!
Get discovered by networking. There are many ways to find networking opportunities. Meetup groups, seminars, conferences, and industry events are great ways to meet like-minded people. This an opportunity to make business partners and scope out your competition at the same time.

And don’t forget the power of social media – there’s an app for almost anything these days!

By creating meaningful relationships in your industry, you can leverage audiences and gain exposure for your business. It’s also worth noting that all Servcorp’s serviced and virtual office customers gain access to Servcorp’s online networking community of 50,000+ global businesses and networking events, providing them with a significant additional value from their small investment.

Source: Real Business

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SMEs to contribute £160bn in turnover by 2025 to boost UK economy, says Sage

The “SMBs Driving Economic Recovery” report from Sage today reveals that, despite ongoing economic turbulence, growth in turnover for UK SMEs is expected to outperform the growth rate for all businesses from 2023-2025.

SMEs are expected to make up 51.9 per cent of total business turnover in the UK economy by 2025. The report, which assesses data in the period from 2005 to 2021, including the impacts of the Global Financial Crisis, then forecasts growth trends over the next three years.

Analysis predicts that the number of UK SMEs is expected to rise by 342,000 from 2022 to 2025, while emphasising the importance of SMEs across all regions in the UK. In 2022, London generated £662bn worth of SME turnover, while in the North East, SMEs employed 67 per cent of all business employees in the region.

Historical market analysis by Cebr also underlines the vital role of SMEs in the recovery from the 2007 to 2009 Global Financial Crisis and projects a similar pattern when we emerge from current economic challenges. In the UK, the number of SMEs grew by 12 per cent between 2013 and 2015, well exceeding pre-crisis levels.

The data also found that 13 per cent and 10 per cent of all new businesses were born during 2008 and 2009, respectively, showing that entrepreneurs were not fazed by the downturn.

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Derk Bleeker, president EMEA at Sage, commented: “SMBs shouldn’t be underestimated in helping to recover and drive the economy as we head into the next few years. They make up 99.9 per cent of all businesses and generated more than half (51.1 per cent) of UK business turnover in 2022.

“So, while business owners are facing real challenges, they are clearly in a better position to adapt to changing economic landscapes and have the resilience to ride the storm.

“Our ask of the government is simple; make it as easy as possible for SMBs to do business digitally and adopt technology that will unlock productivity and give them the insights to adapt and grow quicker.

“With the right support, policies and incentives in place, SMBs will unleash their full potential and play a vital role in economic recovery and sustained long term growth.”

By Matthew Neville

Source: Bdaily News

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Bridging the Credit Gap: How SMEs can Overcome the Barriers to Accessing Finance

SMEs are widely perceived to be the backbone of the UK economy, accounting for three-fifths of employment and around half of turnover in the UK private sector. Despite this, while lending to large corporates has steadily risen, growth in lending to SMEs has been stalling since even before the Covid-19 pandemic. Indeed, new findings from Codat cite that almost half of SME owners who are in the market for credit said they find it difficult to access external capital.

With the success of these companies crucial for the wider health of the economy, the Federation of Small Businesses warned last month that further barriers to finance for SMEs will stifle economic growth at a time when it is sorely needed, given many believe the official announcement of a recession is just weeks away.

Put simply, the existing credit landscape is not set up for SMEs to succeed, and there is an ever-widening gap between the financial support they and their larger counterparts are able to secure. Bridging this credit gap is key to addressing how businesses can not only remain resilient in unfavorable economic conditions, but strive for growth and thrive in the long term.

Looking outside of traditional channels

When looking to explore finance options to fund business investments, many SMEs will approach their bank by default. However, while the wider finance industry has evolved considerably, high-street banking remains somewhat antiquated. NatWest, for example, announced in October that it will be closing 43 of its branches across the UK, exemplifying how the traditional role that banks once held – providing customer service, a personal relationship with a bank manager, and reliability – is slowly disappearing.

When it comes to finance options being offered by banks, the routes to obtaining credit remain limited, making it all the more likely that a business will be unsuccessful in its application, or may make funding assessments based on surface-level information, rather than considering the wider business story. This may mean a business owner is either turned away immediately, preventing them from obtaining the financial support they need to grow, or commit to a product that isn’t suitable.

Clearly, an alternative option is needed. With the bespoke guidance that would have traditionally been provided by a bank generally no longer available, the road has been paved for others, such as finance brokers, to step in.

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Considering suitability of debt

Exploring all potential finance avenues will be crucial to solving the issue of the credit gap. All too often, SMEs take out the wrong financial product for their needs; sometimes due to a lack of understanding surrounding their options, and sometimes due to insufficient or poor guidance being offered.

Fewer than one in ten (9%) small firms applied for finance in Q1 2022, according to the quarterly Small Business Index (SBI), plummeting to the lowest level on record. This decline is being exacerbated by a difficult application process for default finance options that are too basic and frequently unsuitable – solely offering fixed-term loans or increased overdrafts, for example.

Nevertheless, appropriate alternative forms of funding can be secured through different channels – specialist finance brokers for SMEs can offer their expertise with regards to products that can directly facilitate productivity and growth.

For example, the relatively new Business Cash Advance has low barriers to entry in terms of eligibility criteria and is an ideal option for sectors and businesses that tend to experience uneven cash flow: they may see seasonal rises and falls in revenue or may struggle with customers paying invoices on time. These cash advances are repaid as a percentage of card sales and therefore are aligned with performance, making them far more flexible and easier to access than many more traditional forms of finance.

Leveraging assets

Accessing the right finance options can often seem like a challenge for SME owners, particularly in a time of economic downturn, and many may not be aware of assets they have that can be leveraged to secure finance. Asset finance is an often underused but effective solution that can present working capital solutions at a lower entry point.

From an external viewpoint, finance brokers can often identify opportunities – anything from medical equipment to agricultural machinery to telephone systems can be considered a valuable asset, and businesses can benefit from the debt being secured against the asset. For example, where businesses own existing assets outright, these can be refinanced to demonstrate a lower risk level to a lender, rather than raising ‘riskier’ new debt. Ultimately, this represents a cheaper form of debt that is more appealing to lenders when appetites for risk are low.

SMEs struggling to meet ever-increasing eligibility criteria required to get their foot in the door with banks means that accessible financing plans have become more important than ever before. Finance brokers with a better understanding of SMEs’ needs have a crucial role to play, going forward, and must step up to ensure that their diverse needs are met.

In challenging times of economic downturn, having access to tailored solutions and bespoke guidance can make a world of difference. Ultimately, successfully navigating our way through business challenges and into sustained productivity and growth will require brokers to take a hands-on, consultative approach to ensure that SMEs continue to grow and thrive on a long-term basis.

By James Cook

Source: Business Leader

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Festive cheer: SMEs to reward employees with 120 million extra days off

Small and medium-sized businesses are set to reward their employees with 120 million extra days off as the cost-of-living crisis bites.

More than half a million UK small and medium-sized enterprises (SMEs) are spreading festive cheer among their workforces by giving the gift of time, according to the latest quarterly SME barometer from Barclays. One in ten SMEs said they would be gifting each employee 2.5 extra days leave, on average, meaning that workers across the country will receive 120,345,602 days off cumulatively, the bank said.

People working in the hospitality and leisure, and manufacturing sectors will get even more time off, with 3.5 days and three days of additional holidays, respectively. The Barclays research found that 41 per cent of SME employers believe staff activities leading up to the festive season contribute to employee retention. Similarly, nearly a third (30 per cent) of Scottish employees say they are less likely to look for another job if their employer organises activities to reward staff over the festive period.

Of employers who are seeing an increase in demand for benefits from new employees, more annual leave is one of the top three benefits being requested by existing employees. In addition to providing time off, about two fifths (44 per cent) of SMEs will be hosting end-of-year parties, spending an average of £56 per head on festivities, while 41 per cent will be closing offices between Christmas and New Year and 25 per cent will be awarding Christmas bonuses.

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According to the latest barometer, more than half (55 per cent) of UK SMEs reported their total revenue grew – with turnover up around 9.1 per cent year-on-year, on average. Some 51 per cent of UK SMEs reported turnover growth in the third quarter of 2022 compared with the second quarter, consistent with data from Barclaycard Payments, which showed a modest increase of 5.2 per cent in the value and 4.4 per cent in the volume of payments made to Scottish SMEs between July and September this year.

Festive cheer and optimism are, however, dampened by the cost-of-living crunch as nearly half (47 per cent) of UK businesses are worried about their prospects heading into the new year. Some 68 per cent of firms are concerned about the negative impact that rising energy bills will have on their business, with 26 per cent feeling very concerned. Larger businesses are feeling the pinch too, with nearly two-thirds (59 per cent) predicting a decrease in consumer spending and 41 per cent worrying about their businesses prospects as they approach 2023.

Colin O’Flaherty, head of SME at Barclaycard Payments, said: “The upcoming festive period will be our first since the pandemic without restrictions, with employers and employees looking to make the most of it. While it’s been yet another challenging year for businesses, many SMEs are looking to inject some festive cheer by rewarding their employees, as business owners are aware of the positive impact that employee morale can have on staff retention. Our research shows that although owners are very aware of the difficulties to come, they remain resilient in the face of rising costs.”

By Scott Reid

Source: The Scotsman

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Retail the only SME business sector to decline in past year, research shows

Retail was the only small business sector in the UK to record a fall in sales in the year to October. According to Xero’s Small Business Index, based on anonymised and aggregated data from hundreds of thousands of small businesses, showed that UK retailers experienced a 5.1% drop in sales in October.

While sales among the broader small business economy rose by 4.6% year-on-year (y/y), following a 7% rise in September. This shows the stark situation for independent retailers as they enter their busiest time of year.

Despite the sales rise amongst small businesses as a whole, once adjusted for current high inflation – using the ONS Consumer Price Index (CPIH) of 9.6% for October – sales actually fell 5% YoY. That is, the rise in national sales was due to price increases rather than small businesses selling more goods and services.

The struggles of small retailers are further evidenced by a 6.6% YoY decline in the number of people being employed in the sector, while wages rose 4.7% YoY in October. This suggests that retailers are offering higher salaries to attract staff ahead of the festive season.

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Alex von Schirmeister, UK Managing Director, Xero, explains: “As the festive shopping period kicks off, independent retailers need our support more than ever before. They don’t have the large marketing budgets to promote Black Friday deals. Last week’s Autumn Statement offered little respite, so these hard-working businesses will be feeling the pressure to make up the current sales shortfall and manage recruitment challenges. We’re calling for immediate action from policymakers to ease the burden and provide some much-needed stability.”

XSBI data for October also revealed that small businesses in the North of England are struggling. The regions that saw the largest declines in jobs were Yorkshire & the Humber (-7.7% YoY), West Midlands (-7.6% YoY), East Midlands (-7.3% YoY) and the North-West of England (-6.7% YoY).

This pattern is similar when it comes to sales. London experienced the strongest growth (+7.3% YoY), while Scotland (+3.1% YoY), East Midlands (+3.5% YoY), West Midlands (+3.9% YoY) and Yorkshire & the Humber (+4.6% YoY) experienced the lowest sales growth.

Meanwhile, the length of time small businesses wait to be paid rose by 0.6 days to 30.5 days in October. This is the sixth increase in payment times in the past seven months.

On average, late payments to small businesses by their customers increased again by 1 day, up to 8.3 days. Payments are the latest they have been since August 2020. Waiting longer to be paid puts additional stress on small business owners as they navigate their own rising bills.

Government called on to act

Last week, Xero unveiled a new report at the House of Lords that outlines a four-point plan to support small business recovery, including policy recommendations for the UK Government. This included:

• Building a growth strategy for small businesses, with government asked to act to create policy that has SMEs at its heart;

• Getting government to tackle late payments with a range of measures from introducing e-invoicing to regulating payment times;

• Promote the use of accountants and bookkeepers in helping run businesses, while also pushing more students to move to accountancy to avoid a future dearth;

• More investment in digital skills, tech and infrastructure, as well as reducing the tax burden on training and reskilling.

By Paul Skeldon

Source: Internet Retailing