GROWING YOUR BUSINESS - A REPORT ON GROWING MICRO BUSINESSES
13 May 2013
The Department for Business, Innovation & Skills has published the second of Lord Young’s which highlights the growing importance of micro-businesses and makes recommendations of help that government could provide to help micro-businesses to grow.
Over 95% of businesses employ less than 10 employees and Lord Young’s second report Growing Your Business – A Reporting on Growing Micro Businesses includes a recommendation to remove the age cap – currently set at 30 years old – for the Government’s Start-Up loan scheme, so that all entrepreneurs that would otherwise struggle to secure the necessary finance and support can benefit.
The Start-Up loan scheme can provide support in getting business ideas off the ground with a loan of typically around £4,500 and mentoring support. It has exceeded expectations by 50% in its first year, with 3,768 loans worth around £16m now issued since its launch in the autumn. Many of these new businesses are now taking on their own employees.
Further recommendations in Lord Young’s report include:
- Legislating to abolish pre qualification questionnaires (PQQ) on contracts under €200k across the public sector, and setting “single market” principles which suppliers can expect when doing business with the public sector. These principles would simplify and standardise the bidding, payment and advertising of contracts, and would remove the complexity, cost and inconsistency when trying to sell to more than one local authority or public sector body. This would help SMEs further access the £230 billion per year that is spent on goods and services across the whole public sector.
- A £30m Growth Voucher programme to encourage more small firms to get specialist help on: expanding their workforce; marketing a business; financial management and growing online. Businesses that use external advice at key stages in their development grow faster than those that do not - but too few are taking this up.
- A greater role for business schools in the local economy with the establishment of a new national “Supporting Small Business Charter” and accompanying award scheme to incentivise business schools to help SMEs grow. This will include advising small firms and increasing the flow of highly qualified students and graduates into SMEs. Business schools could also become a key part of the referral process and provision of Start-Up Loans and Growth Vouchers.
- Enabling the private sector to provide advice to SMEs on the Government’s website GOV.UK and releasing the online SME advice that the Government holds after the closure of the Business Link website to third party providers for them to rebuild and improve.
- Better marketing of Government schemes to support new and developing businesses by ensuring they are properly resourced and targeted at the small firms that need them most.
The Government will now take these recommendations forward.
Lord Young said:
“We have one of the best environments in the world for the creation of new firms. What this report endeavours to do is to help and encourage all those new firms to now take on their first employees and grow.”
“Growing our smallest businesses would transform our economy – they are the vital 95%. If just half of the UK’s micro businesses took on an additional member of staff, unemployment would be reduced to almost zero. We need to raise the aspirations and confidence of these businesses and give them the tools to grow.”
The press release can be read in full at GOV.UK