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UK Small Business Owners Remain Upbeat About the Future, Finds Survey

According to a recent poll of 500 small business owners and sole traders in the UK, nearly 77% of them believe that starting their own business was one of the best decisions they ever made.

Furthermore, 2/3 of respondents feel optimistic about the future of their ventures, despite the ongoing economic uncertainty caused by the cost-of-living crisis.

A significant 21% of the surveyed SME owners and sole traders are looking forward to welcoming back clients over the next 12 months as the economy stabilises.

Additionally, 19% feel optimistic about the opportunity to acquire new clients, while 20% are looking to introduce new products and services.

The research also found that almost 58% of small business owners have achieved the main business goal they set for themselves.

The most important personality traits for success in the business world were found to be hard work (48%), motivation (44%), and organization (42%).

Sarah Berry, a career expert who has analysed the personality traits of successful business owners for over 30 years, said that sales skills, a sense of purpose, and a willingness to take action are also key.

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Other important characteristics include resilience, adaptability, and flexibility.

AXA UK commissioned the research to mark the launch of its Startup Angel Competition, which is supporting small businesses by giving them the chance to win £25,000 worth of funding along with mentoring.

The survey also revealed that 27% of SME owners and sole traders have a million-pound business idea, but don’t know how to make it a reality.

Among them, 88% said that the idea is related to the industry they are working in.

While 35% of SME owners say that they don’t regret not starting their businesses any earlier, inflation (31%), increasing fuel and energy costs (24%), and the rising cost of materials (20%) are the biggest challenges they face.

Business owners have additional personal savings (43%), savings from their business (37%), and business insurance (30%) as the top safeguarding measures against these challenges.

Commentary:

The findings of this survey indicate that small business owners in the UK remain optimistic despite economic uncertainty.

The results also highlight the importance of hard work, motivation, and organization for success in the business world.

The Startup Angel Competition, launched by AXA UK, is a great initiative that will support small businesses and promote their growth.

The fact that a significant number of SME owners and sole traders have a million-pound business idea but do not know how to make it a reality indicates the need for more support and mentoring programmes.

By Joseph Benjamin

Source: TDPel Media

Marketing No Comments

Survey reveals 97% of small business owners frustrated by contracts and monthly fees

A recent survey discloses small business owners are finding it difficult to use card payment machines as a result of contracts and monthly fees.

Small business owners are being deterred from using card payment devices due to the contracts and monthly fees associated with them, according to a recent poll.

The survey, conducted by card payment app, Tapeeno, revealed that 97 per cent of small company owners found these costs to be their biggest pain points when utilising the majority of card payment devices.

Over 550 small business owners from various industries participated in the poll, highlighting the significant role small businesses continue to play in the UK economy. However, many believed that in order to compete with customers, it was essential to have card payment technology and to spend money on expensive hardware.

According to Jaime Lowe, the Sales Director of UTP Group – the creators of Tapeeno, small business owners face a significant challenge when using traditional card payment technologies as they need to carefully manage their cash flow and often have lower revenue than larger companies. This can be particularly challenging for small businesses, which are already dealing with various issues such as reduced consumer spending due to high energy costs, inflation, and the lingering effects of the Covid-19 pandemic. Therefore, traditional payment technologies can exacerbate the difficulties faced by small businesses.

Lowe stated that Tapeeno has developed software that can convert smartphones into card readers, eliminating the need for additional hardware and avoiding long-term commitments or recurring fees to address this problem.

The Office for National Statistics reports that out of the 1.47 million enterprises in the UK, over 1.18 million are small businesses with one to nine workers. These small businesses, according to data from 2022, were responsible for more than 34 per cent of the total revenue generated in the United Kingdom.

Recent data shows a clear indication of the significant importance small businesses continue to play in the national economy is the fact that 99.9 per cent of businesses in the UK are still SMEs.

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The Sales Director noted that small businesses play a crucial role in the UK economy, but card payment technology has not always been set up to meet their particular needs. With Tapeeno, Lowe emphasised they aimed to change this and provide smaller businesses with a more effective and adaptable card payment option. There are no up-front expenses or charges to be incurred when the system is not in use.

He added that customers may cancel at any time and are only charged for what they use -1.50 per cent- for each transaction.

As the world moves towards a cashless society, the benefits of credit and debit card payments over cash are becoming increasingly apparent. Card payments are not only convenient but also allow customers to make online and in-person purchases without the hassle of withdrawing cash.

This trend is evident in the UK, where the use of debit cards has become the preferred payment method, according to the British Retail Consortium’s 2022 Payments Survey. In 2021, debit card transactions accounted for 67.28 per cent of all retail transactions in the country, with a total value of £282 billion. This represents an 18 per cent increase from the previous year’s figures.

Recent research has highlighted the increasing popularity of cashless payments, particularly among customers with higher incomes and those under the age of 45. According to the Federal Reserve’s 2022 Diary of Consumer Payment Choice, cashless transactions accounted for 57 per cent of all payments in 2021, up from 55 per cent in 2020 and 54 per cent in 2019.

The report indicates that consumers under 45 years old, who made up the majority of this trend, used cash for less than 20 per cent of their transactions.

By Adewunmi Adedayo

Source: IBT

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Entrepreneurs made £11.8bn selling firms in the past year

Business owners have been selling their firms – but total sales figures are down significantly compared to previous years.

UK entrepreneurs have made £11.8bn selling their firms in the past year, according to research by Bowmore Asset Management.

That was 59 per cent lower than the £29.1bn that businesses made in 2019/20. This was partly because of the early stages of the Covid-19 pandemic causing a slump in merger and acquisitions activity. The economic slowdown during the pandemic also meant that entrepreneurs were more reluctant to sell at reduced valuations. Prospective buyers were deterred from buying UK businesses in the first six months of the pandemic because of the uncertainty around its economic effects. Social distancing rules also made it more difficult to carry out due diligence checks, which are essential to the mergers and acquisitions process.

Mark Incledon, chief executive officer of Bowmore Asset Management, said: “British entrepreneurs have had another good year for selling businesses, with billions of pounds more brought in.”

“Even during the extremely challenging economic conditions of the pandemic, UK entrepreneurs were able to generate significant amounts of money by exiting their businesses.”

Incledon advises entrepreneurs who have sold their businesses recently that they should be looking to invest these profits and maximise future returns.

He added: “The first order of business for entrepreneurs who have sold their companies should be reinvesting that money sensibly. Yields are now more generous, but inflation is eating away the value of savings at a far faster rate than normal.

“However, valuations are depressed across a wide range of asset classes and those who invest wisely today stand a good chance of benefitting in the long term.”

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What is Business Asset Disposal Relief?

Bowmore Asset Management’s research is based on HMRC’s Business Asset Disposal Relief figures. It was known as Entrepreneurs’ Relief before April 6, 2020. It means that you may be able to pay less Capital Gains Tax when you sell all or part of your business – 10 per cent rather than 20 per cent. It covers the sale of a business or qualifying shares for up to a lifetime value of £1m (it was £10m under Entrepreneurs’ Relief).

To be eligible, you must be able to satisfy the following two criteria for at least two years up to the date of selling your business:

  • You’re a sole trader or business partner
  • You’ve owned the business for at least two years

By Anna Jordan

Source: Small Business

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Millions of UK businesses at risk of shutting down due to delayed payments

Small and medium-sized enterprises (SMEs) in the UK are facing a growing concern over late payments, according to a report by the UK’s Federation of Small Businesses (FSB). With the cost of living crisis and rising inflation, delayed payments add to the many issues these businesses are experiencing.

As the UK economy continues to face ongoing challenges, small businesses are fighting hard to stay afloat and prove their resilience. To ensure their financial stability, many SMEs are turning to debt collection companies for guidance and support.

Just like the meteoric rise of BNPL schemes in the country, people are developing a habit of delaying payments for the things they purchase and services they use. The study by FSB found that over half of the UK’s small businesses had experienced delayed payments in the previous three months, with construction, education, administration, science, logistics, and IT sectors being the most affected. Frontline Collections, a Debt Collection Agency, has advised London business owners to take immediate action in the event of a late payment or risk never receiving money at all.

Almost a million small businesses are located in London, and if nothing is done to address the problem of delayed payments, according to experts, millions of jobs could be at risk. Expert debt collection companies are aiding in mitigating the problem and recovering millions of pounds in the process.

Tony Meadows, the New Business Manager at Frontline Collections, stressed the importance of swift action, warning that some businesses wait too long to act and ultimately, risk going out of business.

He said: “Whilst we can help most recover what they’re owed, unfortunately for some, they leave it too long to act.”

Meadows noted that UK businesses that interact with the public more frequently are now having problems. He highlighted some sectors, like veterinarians, nurseries, private schools, and dentists, among others, as UK SMEs currently experiencing non-payments.

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Late payments not only affect a company’s cash flow and resources but also have negative impacts on business owners’ mental health, according to a recent poll. The British government has made several efforts, yet many firms still experience payment-related problems on a daily basis.

Moreover, thousands of businesses were forced to close throughout the winter since the energy cost cap did not include them, which has only worsened the issue. The FSB has made several recommendations to the government to address the issue, including urging large companies to commit to maximum payment terms for small business suppliers by 2027.

According to some estimates, the severity of the problem could result in hundreds of thousands of enterprises failing by 2023, putting millions of jobs at risk. There is an increasing need for greater controls in this area, given that 37 per cent of Small and Medium-sized Enterprises seek credit to manage their cash flow, and 62 per cent of the public thinks that business payments should be made within a week.

The UK’s FSB recently published a report titled ‘Time is Money’ that included alarming figures on late payments in the small business sector. Surprisingly, 52 per cent of UK small businesses reported experiencing late payments in the corresponding quarter last year.

To avoid the time-consuming and expensive chore of pursuing unpaid invoices, UK businesses are turning to professional debt collection specialists for assistance. It can be time-consuming to pursue past-due accounts when that time would be better spent concentrating on clients already making payments.

As a result, many UK small businesses seek assistance from reputable UK debt collection companies. UK businesses of all sizes have significantly benefited from the support provided by debt collection companies in the country as they battle late payments and unpaid debts.

By Adewunmi Adedayo

Source: IBT

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Two fifths of UK SMEs expect financial difficulties in the year ahead

New research reveals that two fifths (41%) of UK SMEs believe their business may be in financial difficulties in a year’s time, while a small minority (3%) expect their business to wind down.

Equally concerning, one in six (16.5%) of SMEs believe they will fail to meet their debt obligations over the next 12 months.

The research was commissioned by the Business Banking Resolution Service (BBRS), an independent and free service established to resolve disputes between SMEs and their banks. It asked 522 senior business decision makers at UK companies with an annual turnover of between £5 million and £15 million, about the challenges they believe their businesses are likely to face in the year ahead.

Rising costs concerns

The research reveals that a significant proportion of SME leaders harbour concerns about the financial pressures posed by the current economic environment.

The BBRS asked SME leaders about the greatest challenges for their business over the next 12 months and identified the main concern as rising wage costs, cited by more than a third (36%). This was closely followed by increases in non-wage business costs (32%), staff retention and recruitment (31%) and rising interest rates and increased borrowing (28%).

Such concerns are likely to be heightened by a more specific pressure, when an individual’s personal finances are linked to their business, with the research finding that 3 in 10 (30%) of SME leaders have acted as a personal guarantor for a loan that the business has taken out.

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SME banking worries

The BBRS found that SMEs’ concerns extend to a broader range of financial risks and pressures connected to their business banking needs. When asked about their concerns for the year ahead, 60% of SMEs cited the impact of borrowing costs, followed closely by bank transaction fees, which more than half (55%) are concerned about.

Bank fraud and security issues are the other significant concerns raised by SMEs, highlighted by 54%. These fears appear heightened by past experience, with more than a fifth (22%) of SMEs saying they have been a victim of fraud over the past five years. These concerns clearly persist as, looking ahead, a similar proportion (21%) believe bank fraud is the issue their business is most at risk of in the next year.

Banking complaints

Despite the wider financial and economic pressures, SME banking satisfaction rates are high. More than four fifths (86%) of SMEs say they are satisfied by their business banking service, compared to just 10% who are neutral, and only 3% of SMEs say they are dissatisfied. Of the SMEs that have made a banking complaint, a quarter (24%) have not been resolved, but the large majority of those unresolved complaints are about minor issues.

Dirk Paterson, Customer Director at the BBRS, said, “There is a tough year ahead for small businesses and we expect to see a modest rise in complaints, despite high levels of satisfaction with banks. As the research shows, we expect the majority of complaints will be resolved between both parties directly.

“Where SMEs are unable to resolve their complaint with their bank they should get in touch with the BBRS to see if we can help.”

Source: London Loves Business