The ICAEW’s Small Business Taskforce, a collection of 11 representative bodies for small businesses, last week set out a manifesto to government with ten recommendations for things that they believe need to happen in order to keep Britain one of the best countries to start and grow a business in. These recommendations, outlined in the Small Business Manifesto, will be presented to ministers in upcoming meetings with the relevant policy makers over the next few weeks.
Central to these recommendations is that the government will be collecting and delivering new data on small firms and self-employed individuals in order to accurately measure the contribution they make to the economy.
Why is this data being collected?
The manifesto outlines that there are currently not enough polls looking into small business attitudes. These surveys, whilst helpful, generally feature firms with more than ten employees, ignoring a large section of the business community.
On top of this, the data collated through polls currently only gives a general outline of the entrepreneurial landscape. In short, it fails to give the full picture.
What are the recommendations?
The Small Business Taskforce is recommending pulling together data on all small and medium sized businesses in the country through the creation of an SME data consortium. This will bring together companies who are sourcing valuable and real time statistics on the high-growth market, which will importantly include those firms with less than ten employees.
All this sourced data from these groups will then be connected with the Office for National Statistics (ONS) to ensure an up to date picture of the small business economy is realistically portrayed. We at Beauhurst are looking forward to seeing how our data can help build a better picture of how small businesses operate.
Why should we care?
Clearer and more definitive data on the value of SMEs to the economy would be a very important step for the government to take. We at Beauhurst are particularly interested in “scaleups” – a segment of firms that are expanding at a notably high rate. Our recent report looks at these businesses in detail, and we hope that more visibility on these organisations helps policy makers and advisors aid their growth.
The continued development and founding of small businesses is integral to the economy for a variety of reasons. First and foremost, they create jobs – total employment in SMEs accounts for 60% of all employment in the UK, with 15.6 million employees, and this number will rise as long as the proportion of SMEs can also grow. As well as this, small and medium sized businesses make up a staggering 99.9% of all private sector businesses.
Small businesses and startups also contribute to the continued healthy growth of innovation. If a small business finds a way to disrupt a previously crowded and over-saturated market, it creates a whole new space within the industry. This in turn leads to opportunities for rival startups to enter that space, feeding competition and encouraging further innovation within the industry.
A perfect example of this is the manner in which Transferwise disrupted the banking and financial sector with the offer of free international bank transfers. The most important part of their success was that they managed to forge new ground for businesses to compete and build new ideas. For example, companies like World First and Currencies Direct have now become rivals to Transferwise. Through their innovation, an entirely new space in the industry was created. The power of small businesses cannot be overstated here.
The power of data
The new data recommendations by the Small Business Taskforce are highly relevant to our vision at Beauhurst. Supporting innovation through data means that high-growth small businesses have more opportunities to expand through partnerships, funding and more. We look forward to seeing the effect of these positive recommendations.