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What Do SMBs Need From Britain’s Next Leader?

The UK will have a new prime minister on 23 July, what do growing businesses want from Boris Johnson or Jeremy Hunt?

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The UK will have a new prime minister on 23 July, what do growing businesses want from Boris Johnson or Jeremy Hunt?

Opinions

What Do SMBs Need From Britain’s Next Leader?

The UK will have a new prime minister on 23 July, what do growing businesses want from Boris Johnson or Jeremy Hunt?

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With pledges flying around from both sides of the Tory leadership contest, one thing for sure is that the next Prime Minister must look to help the backbone of the UK economy - SMBs. Small businesses account for at least 99.5% of the business in almost all industries - but what is going to help them thrive?

Lock down on late payments

One of the biggest governmental issues regarding SMBs has been clamping down on late payments. The next Prime Minister must do more to pressure large businesses to pay SMB suppliers on time.

Despite Small Business Minister, Kelly Tolhurst, announcing that entire corporate boards will be culpable if SMB suppliers are not paid on time, more must be done to ensure SMBs can manage their cash flows, grow their businesses and remain productive.

Therefore, the next Prime Minister needs to establish a clear definition of what ‘unfair’ payment terms are so clear expectations can be set with stakeholders at both ends of the supply chain. With SMBs often operating on tighter margins, setting clear boundaries on late payments is critical for their survival.

Keep promises on business rates

Running a SMB is no mean feat. It is therefore critical that SMBs are getting the right financial and legal support in order to keep afloat.

One of the main announcements from the autumn budget was the Chancellor declaring to cut the business rates bill for the smallest of SMBs. Businesses with a rateable value of £51,000 and under were told to see their bill cut by a third over a two-year period.

This, according to the announcement, would lead up to £8,000 in savings from independent businesses. This promise to cut business rates is also being made by Hunt, who intends to scrap taxes for 25,000 SMBs across five regional cities.

This reduction in business rates could indeed make all the difference for SMBs, in particular because cash flow is such a huge problem for them. However, it is critical that SMBs understand how these reduced rates can be accessed.

Business rates relief at the moment is not streamlined across Britain, making it complicated for time and resource-strained SMB owners to find out what they are entitled to.

Clear communication on who will benefit and how they can access this relief is critical to the initiative’s success. Taking this issue seriously, will show a huge commitment to the SMBs economy.

Build out a bigger support network

Budget aside, it cannot be helped that there remains a huge elephant in the room...Brexit. Brexit is set to determine the fate of the next Prime Minister, there is no doubt about it.

No matter the outcome, SMBs are going to be amongst the first to be affected. It is therefore critical that UK leadership offers more financial support to SMBs amid uncertain times ahead.

Some banks are offering financial support for SMBs in light of the uncertain economic forecast. For example, Barclays recently announced a £14.7 billion lending fund to help small and medium-sized businesses negotiate Brexit.

This fund will take advantage of the government-backed Enterprise Finance Guarantee programme, designed to promote lending to SMBs by offering guarantees supported by the British Business Bank. But this is not enough.

The new UK leadership cannot just rely on the big financial players to pick up the pieces, after all, Brexit is going to affect businesses of all sizes.

Whether this is through building stronger partnerships with funding providers or putting more investment behind government-led programmes, the next Prime Minister must commit to helping SMBs navigate through the highs and lows of Brexit.

No one can make an accurate prediction on the future, but measures can be put in place now, in order to ensure SMBs - the economic backbone to Britain - remain as stable as possible, for the sake of Britain's entire economy.

Our next Prime Minister is set to lead in an era like no other. SMBs must be at the top of the next Prime Minister’s agenda, as these are the businesses that form the economic foundation for Britain. With 16.3 million people employed in SMEs, it’s time to listen to the needs of SMBs and support them for whatever the future holds.

Steven Stewart is director of SMB Solutions at Valitor.

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What Do SMBs Need From Britain’s Next Leader?

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