Ambitions for your Small Business

With 500,000 small businesses created last year, there are now about 4,900,000 in the UK. They make up 99% of the private sector and provide around 47% of jobs. Clearly you and the rest of the small business sector are really important to the UK economy, and the government recognises that it should be doing more to support and help you.

 

Government Intentions to Make Things Easier

 

In a new publication launched in December 2013, it has come clean about its aims to help small businesses to reach for the stars and achieve their ambitions. Small Business: GREAT Ambition sets out a raft of policies designed to make it easier for small businesses to grow. In the Foreword, Matthew Hancock, Minister of State for Skills and Enterprise, states that among the aspects to be made easier are financing business growth, hiring people, developing new ideas, and breaking into new markets. Along the way the government will make it easier to get the right support at the right time. It will also be cutting more red tape to make it easier to get on with doing business.

 

Finance Aspects

 

Outsourced bookkeeping personnel applaud announcements like a campaign to boost awareness of the success rate of the lending appeals procedure. Statistics quoted claim that 40% of appeals by entrepreneurs result in loan rejections being overturned. The idea of a new seven-day current-account switching service, intended to make it easier for small businesses to change banks, is also welcome. And of course, the British Business Bank was set up to specifically to help entrepreneurs to access bank funding. Several other finance related initiatives are mentioned, but there is not much that is really new.

 

Personnel Aspects

 

During 2014, government intends to introduce a fully online HMRC payroll system, which should reduce the workload on your bookkeepers or payroll staff. In the spring they will also be launching a new tool for managing staff and getting the best out of them. The £2000 national insurance bill relief also comes into force in April 2014. Among other measures on personnel issues, they announce that they will be providing new support for small businesses trying to recruit from overseas.

 

Marketing Aspects

 

Recognising the difficulties small businesses face in trying to gain footholds in new markets, they will be opening up more, and easier, access to public sector contracts. More advice and support on exporting will also be made available.

 

This taste of what is included indicates that some help for small businesses is on the way. As always everyone will be waiting to see what eventually transpires, but it’s looking good on paper.

New Year, New Pricing

January is a month to think about a fresh start, spring cleaning, de-cluttering and reviewing aspects of your business. One of these could be your pricing strategies. Are you as competitive as you could be? Are you charging too much and therefore losing business? Are you charging too little so your margins are too tight?

 

What Are you Competing with?

 

To be confident about your answers to these questions, you need to have some other knowledge under your belt. One of the most important elements of this has to be knowing your competitors, what they are charging and what value they are delivering. Only then can you know how the value of your offering compares.

 

What people want is value for their money, and that may not be the cheapest. If your products are of better quality, you can charge more and people will buy as long as they recognise this. If your services bring more returns, you can charge more as long as your customers are aware of it.

 

The Pricing/Marketing Mix

 

So, as your outsourced bookkeepers would tell you, a pricing strategy is all mixed up with how you present yourself and persuade your targets of the value you will provide. Another aspect for a small business could be the value it brings to the local community – how well known you are for joining in or sponsoring local events and employing local people, perhaps with apprentices. A friendly personal service and total reliability also adds up to value.

 

If you have strong competition, what you have to avoid is a price war in which no-one wins. Statistics from research projects indicate that dropping prices to gain sales volume doesn’t bring higher profits. The January sales are more about making space for new stock than about gaining revenue.

 

Packaging the Offering

 

If you can’t compete like-for-like with other local businesses or major companies, try out the principle of bundling and offer packages that need a one-off investment but bring greater benefits that equal higher value to the customer. It’s important to let your target markets know how you are different, how that will make things easier or pleasanter for them, and what they will get out of it.

 

Whatever you do, you need to focus on value and getting this across to customers. Why not sit down with your bookkeepers for a discussion on price and value? It’s always good to get opinions from people who have familiarity with the business but can remain objective.

Getting Back on Track After the Floods

 

It wasn’t the best start to the New Year for many people. The bad weather had caused misery over Christmas and continued since. The environment agency published advice to businesses but even their recommended protection procedures did not save many small entities.

 

Storms affected many small businesses in the south of England. Many have been flooded out, losing stock and trade, with premises and equipment needing repair or replacement. Insurance claims take time and not much can be done in the meantime without cash to get things going. Others have simply taken a hit because no one was inclined, or was able, to venture out to buy or do business.

 

Bank Help Offered to All

 

If you have suffered setbacks because of the recent horrendous storms, you could get some financial help for your recovery. NatWest and the Royal Bank of Scotland (RBS) have set up a fund of £250 million – the UK Storm Business Fund – so they can offer loans that will be interest free for three months to businesses that have been adversely affected, whether or not they are already customers. The loans will be awarded on a first come first served basis. You just have to have a reasonable credit rating and be over 18 to qualify. Call 0800 529 8544 to request their help.

 

Bank Help for Customers

 

If you are already a NatWest or RBS customer, you may be able to get other temporary benefits, because the bank is relaxing requirements in a number of areas as an emergency measure. You might be allowed a temporary overdraft increase or credit card limit extension. Early withdrawal fees and termination costs could be waived if you want to access money held in an account where these would normally be applicable. You could even be given a holiday on your current small business loan. It‘s worth having a discussion with your bookkeepers about which options would be most advantageous for you.

 

Chris Sullivan is CEO Corporate Bank for NatWest and RBS. He said: “Many firms will have taken a real hit to their livelihoods as a result of this prolonged period of adverse weather. The loss of trade or damage to stock from such a storm can mean businesses find themselves in financial trouble…It’s important to the local economy and communities to get these businesses operational again.”

 

Your outsourced bookkeepers may know of other businesses that have suffered, and how they are coping. There may be helpful local schemes they are aware of, so keep on talking to them and to others in your local community. You may be able to help each other.