Micro businesses are important.
It was interesting reading the thoughts of many politicians recently when they were talking about trickle-down economics, and it got me wondering if they really understood the importance of micro businesses in the UK economy.
These businesses, employing ten people or less, account for 96% of the businesses in the UK economy and are the real drivers of our economy.
Government claim to consult with them, but this is very often done through business organisations who cannot afford to rock the boat for fear of losing their seat at the government table. This results in the real needs and issues of micro businesses not being discussed and, if they are, they are rarely listened to. Their needs and issues are even more rarely acted upon by government.
This is in stark contrast to the lobbying power of big business which has great access to and impact on the decision-making processes of government.
A powerful & positive example
I saw an interesting example of the power of micro business when visiting my local gym recently. One of the fitness coaches had purchased a piece of kit which measured body composition. It was something he would not have been able to afford without the help of a good source of finance.
A small finance company, focussed on small business, had helped him with the purchase and he had his eye on another bit of kit as well.
He was already selling this service to clients, recruiting nine on the night I was there. He’s planning to grow his business and take on more coaches, with this new technology helping him create a clear point of difference with other coaches.
I looked into it a little further and the kit is produced by a small digital engineering company based in the UK. As more coaches buy their products they will also grow and as a result, they would need to buy in more components and labour from within the UK.
On top of this, these small businesses all reported receiving payments quickly and efficiently – something that many big businesses are not doing. Big businesses are making their own payment practices longer and more complex, a culture which makes “trickle-down economics” as a successful concept look doubtful to say the least!
My fitness coach experience is a great story and I bet that even in these gloomy times there are many other stories like this that show the real power of micro businesses and how effective “trickle-UP economics”, can be.
It’s interesting that the starting point was the finance and access to finance that individual sole trader got, from what many call the alternative finance sector. I bet he wouldn’t have got that support from a high street bank.
So, in my opinion if we can get government to listen to and act upon the needs and issues of the UK’s micro businesses and get them to help the finance sector to deliver targeted and effective finance to these businesses (which in many cases will mean getting out of the way) then we really can start to drive the UK economy forward!
Ian Cass
Managing Director
Forum of Private Business
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