Small businesses still facing barriers to growth

by Andrew Regan

If you own a small business, life can be tough. According to a survey taken by the Federation of Small Businesses (FSB) in early 2006, small businesses face a variety of barriers to growth, including such factors as red tape, skill shortages and even crime. Out of all the small firms surveyed by the FSB, more than half said that the time they spent on regulation had increased and almost a quarter of small businesses claimed to have problems with recruitment due to skill shortages.

John Walker, the national policy chairman for the FSB, asserted that these barriers to growth for small businesses had been highlighted before, and said the government should do more to tackle these issues. He claimed:

"These problems, which our survey confirms yet again, must therefore be addressed by the government because our country's economic health depends on the success of small businesses. Regulation, both its volume and complexity, crime and a poorly-skilled workforce are issues that we have raised many times before. It is therefore worrying that they are still the main barriers to growth for small firms."

The FSB claimed at the time of the survey that small firms account for more than 50% of the UK's private sector workforce and are responsible for generating over half of Britain's GDP.

When it came to recruitment, the firms surveyed by the FSB claimed that they faced a range of skills barriers - including illiteracy, numeracy, communication skills or technical skills. What's more, 57% of the small businesses surveyed claimed to be the victim of at least one crime over the twelve months previous and said that, if they reported the crime to the police, it was unlikely to help their situation.

Cutting through red tape has also proved extremely problematic for small businesses; 56% of the small firms surveyed by the FSB claimed an increase in time spent on regulation, while 55% said they were not happy about the complexity of existing legislation. The survey showed that older small businesses were less happy with red tape - so the longer a firm had been trading, the more likely it was that they were dissatisfied with legislation.

In fact, many worry that small businesses will not be able to keep up with the changing pace of existing business legislation in Britain. However, a new law introduced in October 2006 which outlaws age discrimination in the workplace has been welcomed by many small businesses, even those that have a reputation for employing young people, such as PR and advertising companies.

If you're looking to start a small business, or you are an existing SME owner, it may be worth investigating the range of small businesses banking services available locally. This is often an excellent first step in making sure that you get your business up and running efficiently, and a great source from which to seek advice if you're looking for information on how best to cut red tape.