Friday 27th February

‘Fear’ is the biggest factor behind non-starts

Thousands of people in the UK think about starting a business “every day”, according to research, but a high proportion of them are put off by the fear of failure....

Thousands of people in the UK think about starting a business “every day”, according to research, but a high proportion of them are put off by the fear of failure.

Research commissioned by the government’s Business is Great campaign shows nearly four in 10 of us have business on the brain, yet of these 78% said they were afraid to fail.

The survey of 1,000 people found that 18 to 24 year-olds were most preoccupied with entrepreneurial ambitions, perhaps considering self-employment in the face of reportedly weak employment prospects and earnings potential for this age group.

It also showed what is holding us back. Apart from fear of failure, lack of a strong mentor or inspiration was one significant factor; another was finding appropriate finance and yet another was finding the right premises from which to launch a business.

Commenting on the findings, business secretary Vince Cable said: “The UK is Europe’s leading entrepreneurial nation and the government is backing small firms as part of our industrial strategy to create long term jobs and grow the economy.

“Large companies also have a vital role to play in offering support and sharing their expertise with smaller companies wanting to grow.

“Over 2 million new businesses have launched since 2010 and I want to encourage all would-be entrepreneurs to visit the GREAT Business website and benefit from the wealth of advice and support that’s out there.”

In other findings from the report, 41% of people said starting a business would be harder than starting a family and 63% said it was one of their greatest ambitions.

More on this story
Close article
Thursday 26th February

£1.7 million for UK parking app

An app that allows drivers to find and reserve convenient free parking spaces has raised £1.7 million on the crowdfunding platform Crowdcube....

An app that allows drivers to find and reserve convenient free parking spaces has raised £1.7 million on the crowdfunding platform Crowdcube.

JustPark connects drivers to the owners of parking spaces to and has a deal with BMW which integrates the app into cars’ dashboard displays.

After listing on Crowdcube, the business reached its target £1 million in just four days and at time of writing had raised more than £1.7 million.

The company will keep the funding round open for a short time, it said.

New investors join alongside existing backers BMW iVentures, which ploughed £250,000 into the business in 2011 and global venture capital outfit Index Ventures.

JustPark founder Anthony Eskinazi said: “We are hugely excited to offer our existing users and members of the public the chance to claim a stake in JustPark’s future growth, particularly given that our business is all about collaboration.

“We are operating at the heart of the sharing economy, with our customers providing each other with the solution to the parking headache by opening up their underused parking spaces to drivers.

“This crowdfunding round will allow us to work together with our most passionate users to build the business to greater heights.”

JustPark is the 200th business to be funded on Crowdcube and is its biggest technology investment to date. Some 2350 investors ploughed an average £700 into the deal, it said.

The biggest deal on Crowdcube overall was Kevin McCloud’s Hab Housing, which raised nearly £2 million in two years ago.

Crowdcube co-founder Luke Lang said: “It’s great to see our community of 140,000 registered investors getting an opportunity to invest alongside leading venture capital firms like Index Ventures and BMW iVentures.”

More on this story
Close article

Manufacturers call for help to increase pay

UK manufacturers say the next government should invest in measures to boost productivity and help businesses pay their workers better salaries....

UK manufacturers say the next government should invest in measures to boost productivity and help businesses pay their workers better salaries.

In its business manifesto ahead of the May general election, the Engineering Employers’ Federation (EEF) says a more productive and flexible labour force should be top of the agenda.

The body says the last five years have been focused on restoring order to a turbulent UK economy and that the Tory government has laid “some important groundwork”.

But it adds that the next five-year parliament should look to deliver a balanced economy, with more prosperity and a seat for the UK at the heart of Europe.

“It will involve tough choices and will not happen over the lifetime of a single Parliament,” said EEF chief executive Terry Scuoler.

“It is vital therefore the next government recognises this and sets lofty ambitions to provide the long term certainty that is necessary for manufacturing businesses to invest recruit and grow in the UK.”

Other priorities set out in the EEF manifesto include improving infrastructure, by creating an independent Infrastructure Authority, investing in roads and broadband, and energy network reform.

It also wants to see a reduction in the cost of doing business, with compensation for firms using renewable energy sources, and better support of growing businesses.

Smaller businesses could be supported with funding for Innovate UK and Science, as well as the HVM Catapult investment centres and UK Trade and Investment.

In a statement, the group said: “There remains much to do to restore the public finances, improve productivity and secure real wage growth.

“In particular, the next government should set an ambition for measurable improvements in productivity relative to our international competitors.”

More on this story
Close article
Tuesday 24th February

Minimum wage ‘to increase 3% in October’

The adult rate of the minimum wage will increase 3%, from £6.50 to £6.70, in October if recommendations to the government by the Low Pay Commission (LPC) are accepted....

The adult rate of the minimum wage will increase 3%, from £6.50 to £6.70, in October if recommendations to the government by the Low Pay Commission (LPC) are accepted.

The LPC is an independent body which advises the government on the appropriate rate for the minimum wage for adults, young people and apprentices.

It meets every year to formulate figures which it passes to ministers who almost always accept the suggested rates.

The LPC recommends a 3.3% increase from £5.13 to £5.30 for 18 to 20 year-olds and a 2.2% increase for 16 and 17 year-olds.

Business groups said the suggested increases struck a balance between the need for wage growth and continued uncertainty over the future of the economy.

Katja Hall, CBI deputy director-general, said: “The LPC has struck a careful balance. As the economic recovery cements, the Commission has reconciled a desire to reflect this in pay packets while recognising that productivity growth remains weak.

“We welcome the commitment to review next year’s rise if the improved business environment doesn’t materialise.

“The National Minimum Wage has been one of the most successful policies of our time thanks to the independent recommendations of the Commission, helping many low-paid workers without damaging their job prospects.

She added: “Any artificial increase due to political expediency will help no-one and ultimately damage one of the most successful government policies in recent years.”

Separately, the government published data on 70 businesses that have been caught failing to pay minimum wage rates.

The Trades Union Congress (TUC) said there should be more prosecutions and bigger fines for employers that break the law.

“We need more prosecutions and higher fines. Cheating bosses who fleece their workers out of their hard earned pay must end up in court,” said TUC general secretary Frances O’Grady.

“And there are still lots of under-paying employers who are getting away with it. More inspectors are needed so we can make sure that every single minimum wage cheat is caught.”

More on this story
Close article
Monday 23rd February

Student start-ups up 50% in 12 months

Students are showing their entrepreneurial credentials as evidence suggests that growing numbers are starting their own businesses to swerve having to get a job upon graduating....

Students are showing their entrepreneurial credentials as evidence suggests that growing numbers are starting their own businesses to swerve having to get a job upon graduating.

A survey by online service PeoplePerHour, which connects freelancers with work opportunities, reveals a 54% more students started a business in the last 12 months than in the previous year.

Other findings include 57% who started a business did so because of a perceived lack of security in the jobs market.

Meanwhile just under half said they were motivated by the prospect of earning extra cash while in education and a third simply said they wanted to be their own boss.

Xenios Thrasyvoulou, founder and CEO of PeoplePerHour, said: “A major factor in this growing trend of new small business owners across the younger generations is how cheap and easy it is to set up a business and build a client base from day one.

“The barriers of starting a business being lowered is one of the main reasons we’re seeing such a noticeable rise in students choosing the self-employment route earlier than ever before.

“They seem to be concerned about the security of the current jobs market for graduates and appear to be making alternative plans for their future after university.”

Areas experiencing the fastest growth in student entrepreneurs are Bristol, London and Liverpool.

The study also revealed that students are finding plenty of spare time to work on their start-ups. Just over four in 10 said they spent 20 hours a week or more on the business, while, astonishingly, 15% claimed to be working 50-hour weeks on top of studies.

More on this story
Close article
Friday 20th February

Women driving growth in self-employed

Official figures published this week show that women, not men, are driving the large increase in self-employment in the UK....

Official figures published this week show that women, not men, are driving the large increase in self-employment in the UK.

The news comes in labour market data published by the Office or National Statistics (ONS) on Wednesday, which showed unemployment as a whole fell 97,000 in the last three months of 2014.

Figures for self-employment revealed a 2% increase or 88,000 in the final quarter compared with the same period in 2013.

But the number of women going it alone rose by a much bigger margin, accounting for 77,000 or a whopping 87.5% of the total.

It means there are now 5.6% more women in self-employment than this time 12 months ago.

Chris Bryce, chief executive of the Association of Independent Professionals and the Self-Employed, said MPs should make positive noises towards self-employed people in the run-up to the May election.

“The steady march of the self-employed continues and the employment rate in the UK now stands at 73.2% of the working population, its joint highest rate,” he said.

“It’s particularly pleasing to see the trend in women becoming their own boss, shown in last month’s labour market Stats, continue apace. The rise in the number of women heading into business for themselves over the last year is a whopping fourteen times higher than that of men.

“Political parties must further strengthen their commitments to supporting the UK’s 4.5 million independent professionals.

“We welcome Conservative efforts towards ending late payment of small suppliers and providing free wifi on trains, while Labour’s plans are positive but could go much further to ensure they support this vital section of the UK’s economy.”

More on this story
Close article
Thursday 19th February

Manufacturing demand hits six-month high

The UK manufacturing industry continued robust growth in February with orders and output both reaching levels not seen for six months....

The UK manufacturing industry continued robust growth in February with orders and output both reaching levels not seen for six months.

Figures involving 552 factory businesses from the CBI show that activity in the sector was up in February on already-strong growth.

Evidence also suggests the growth will continue for at least the next three months, with export orders rallying from ground lost in 2014.

Rain Newton-Smith, CBI economics director, said lower operating costs including the plunging price of oil were giving businesses a lift.

“Our manufacturers have more of a spring in their step this month, regaining some of the momentum lost towards the end of last year.

“The drop in oil prices is good news for the manufacturing sector in the UK, bringing with it lower operating costs, but North Sea producers are clearly suffering.

“Export orders picked up significantly, to a level not seen for six months, but uncertainty over prospects in the Eurozone will continue to weigh on export demand.

“So, it’s imperative we continue to help manufacturers sell their products and services into high-growth markets around the globe.”

More on this story
Close article

Ministers urged to cut childcare costs for working families

A childcare group is urging coordinated action to cut the cost of childcare on working families, after publishing figures showing the costs have spiked in the last five years....

A childcare group is urging coordinated action to cut the cost of childcare on working families, as it published figures showing prices have spiked in the last five years.

The average price of a part-time nursery place for a child under two has gone up a third since 2010 and now sits at more than £6,000 a year.

The data is published in the Family and Childcare Trust’s annual report, which also revealed that costs increased 5% since this time last year.

That compares with a UK inflation rate of 0.5% and average wages increasing at just over 2% a year.

Childcare is an essential component of running a business for tens of thousands of people in the UK. Many would-be entrepreneurs have been dissuaded from starting up because of the perceived high cost of nursery places.

The report stated that successive governments have introduced measures to help with caring for children, but that rising costs are erasing any benefit from these measures.

"Successive governments have recognised the pressure that high childcare costs place on families,” the report stated.

“In 2013, the government announced increased help with childcare costs through universal credit and the new tax-free childcare scheme.

"But above-inflation increases in childcare prices have the potential to erode the value of this extra assistance, particularly in London and the South East where parents' childcare costs may easily reach the £8,000 annual maximum level for help.”

It added that right now in London the average cost of caring for a child under two on a part-time basis is £7,907.

The Liberal Democrats today set out their plans to improve the situation for working parents and business owners.

Leader Nick Clegg says the party would introduce 15 hours a week free childcare for all children of working parents between the ages of nine months and two years.

More on this story
Close article
Wednesday 18th February

Unemployment falls 97,000 in last three months of 2014

The number of people without a job in the UK fell by almost 100,000 in the three months to December last year, according to official figures released today....

The number of people without a job in the UK fell by almost 100,000 in the three months to December last year, according to official figures released today.

The Office for National Statistics (ONS) said overall working-age employment increased by 103,000 to nearly 31 million, which is the highest number ever.

In better news for people in work average earnings also increased with wages including bonuses up 2.1% compared with a year earlier. Discounting bonuses the figure was 1.7%.

Yesterday separate official figures revealed consumer price inflation at 0.5%, meaning average salary increases are now well above the average increase in everyday costs.

James Sproule, chief economist at the Institute of Directors said the wage data was particularly welcome and should begin feeding into more economic growth and better tax receipts in future.

“Throughout the recession, employers and employees co-operated to save jobs, by forsaking pay rises and cutting back hours,” he said.

“We are now seeing the benefits of this mature and responsible approach. Businesses are recovering strongly, as they benefit from having maintained an experienced and skilled workforce, and staff are being rewarded with modest and sustainable pay rises and bonuses.

“Average earnings in this period were boosted by strong year-end bonuses across a broad range of sectors from construction and manufacturing to finance and business services, suggesting good performance across the economy.

“However, raising bonuses and not salaries implies some companies are still cautious about increasing their fixed costs.”

But trade unions were more sceptical. Trades Union Congress boss Frances O’Grady said there was a “long way to go” before a full labour market recovery.

“At the current rate of progress it will take until at least the end of the next parliament just for wages to recover their lost value,” she said.

More on this story
Close article

Tax man ‘targets self-employed, turns blind eye to super-rich’

HM Revenue & Customs spends too much time and effort chasing self-employed people and not enough chasing multi-millionaire tax evaders, a body representing independent professionals claims....

HM Revenue & Customs spends too much time and effort chasing self-employed people and not enough chasing multi-millionaire tax evaders, a body representing independent professionals claims.

The Association of Independent Professionals and the Self Employed (IPSE) was responding to a feature on Radio 4’s Today programme, which considered how HMRC investigates small businesses.

It pointed to the infamous Arctic Systems tax case, in which a husband and wife team drew income in the form of dividends on profits, rather than salaries, so they would pay less personal tax.

The case went to the High Court, where HMRC lawyers argued Geoff Jones, who did most of the work in the business, drew an “inadequate” salary, thereby inflating the companies “reserves” and allowing payment of “excess” dividends up to the tax-free threshold.

Money paid in the form of dividends has already been subject to corporation tax and VAT, while salaries pegged at the income tax-free threshold nevertheless attract national insurance contributions.

Simon McVicker, director of policy and external affairs at IPSE, said the avid pursuit of sole traders and micro-businesses was a distraction from the really big tax cases involving multi-national corporations.

This, he said, hindered economic growth because of the significant financial contribution made by self-employed people.

“The way HMRC are fiercely pursuing independent professionals while turning a blind eye to tax avoidance tactics by big business is completely unfair and is stifling the important work of microbusinesses up and down the country, which will in turn affect economic growth.

“Tax avoidance on all levels is wrong, but in light of the recent HSBC allegations, HMRC are picking on innocent individuals while big business are getting away with wrongdoing lightly. One of IPSE’s top priorities is to support microbusinesses who are being unfairly treated by HMRC.”

McVicker accused HMRC of “not going far enough” in cases of suspected aggressive tax avoidance, such as those involving major banks and retail chains.

More on this story
Close article
Load more