companies
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Staff at small firms in the office more days than those at large companies

Workers are more likely to go into the office regularly at small companies than at big employers, according to new survey results.

The shift to hybrid working post-pandemic remains popular. However, patterns have changed since property consultancy Lambert Smith Hampton last conducted its occupier survey in June last year.

This year it spoke to 60 people from companies of all sizes that collectively have more than 100,000 UK staff, about half headquartered in London.

The most common response for how many days staff are in per week on average was three (39%), compared with two (42%) being the most popular answer last year.

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LSH also observed a divergence between attendance levels in firms of differing size. Among those with fewer than 50 employees, 47% in May reported office attendance of at least four days a week, and the only respondents with full attendance were all in this size category.

In contrast, two days a week remains the most common level of office attendance in firms with more than 1,000 staff.

Attendance levels of four days a week or more are still a rarity across all of the larger size bands.

Oliver du Sautoy, head of research at LSH said the results suggest “that larger businesses have more established infrastructures to facilitate hybrid working… By contrast, SME culture is arguably more rooted in the physical workplace and the interaction and camaraderie that comes with it.”

By Joanna Hodgson

Source: Evening Standard

sustainability
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89% of SME’s Would Check the Sustainability Credentials of a Supplier

The matter of how sustainable a potential supplier, stakeholder or partner is, is a priority for as many as nine in 10 small businesses, according to new research.

Polling a sample of more than 1,000 small business leaders, the results showed that 89% said they would check the sustainability credentials of a company in some way before deciding to work with them.

As sustainability issues become increasingly important, both the desire to work with green suppliers and scepticism of bold green claims are on the rise. Recent research found as many 76% small business said they intended to ‘green’ their supply chain last year, while the Competition and Markets Authority (CMA)* and Financial Conduct Authority (FCA)† have both introduced new measures to ensure green claims made by companies do not mislead.

58% would seek out official certifications, accreditation and listings

The results showed that almost half of small business leaders would actively check for an official certification that recognises the organisation as meeting certain sustainability standards. Additionally, around a third would check an organisation’s listing as a sustainable business on groups such as the Federation of Small Businesses or British Chambers of Commerce.

Interestingly, it was leaders of larger businesses (up to 250 employees) that were more likely to seek out official accreditation (64% vs 53% of businesses with fewer than 100 employees).

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Examining a company’s claims

A company’s own published materials were also a consideration highlighted by the survey. Around a third (34%) said they would research the company’s green policies and practices on its website, with an additional 31% saying they would check reports and mission statements that outline green objectives.

More directly, just over a quarter (28%) said they would ask representatives about the company’s attitude towards sustainability as part of the process to decide whether or not to work with them.

Broader reputation a significant factor

Around a third (35%) said that they would do a cursory search on the company both on the Internet and on social media to check what others had said about their sustainability credentials. Additionally, around one in five (22%) said they would ask close contacts of the company to get a sense of a partner’s reputation as a sustainable company.

Jo Morris, Head of Marketing and Insight at Novuna Business Finance commented:

“We are quickly reaching the point where many small businesses will seek out greener options if it falls within the bracket of what they consider to be affordable. This wave of interest is met with an ever increasing range of options to choose from. This means that business leaders are now forced to apply an additional layer of rigour to sort the genuine from the “too good to be true”. What we see from this research is not only the desire to work with green suppliers and stakeholders as part of their day-to-day operations, but also the extent to which they are prepared to check any claims.

“The new measures that are being introduced by the likes of the CMA and FCA will give small business leaders more confidence in the decisions that they make, however the importance of a business carrying out its own research cannot be overstated. Understanding the right questions to ask, and where to find this information, is a key part in the process to making good sustainable choices for a business.”

Source: Business News Wales

invoice finance
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Average SME plans to invest £321k to grow their business

New research from Aldermore’s SME Growth Index has revealed the investment and growth plans of small and medium-sized enterprises (SMEs) in the UK. Despite the ongoing cost-of-living crisis, SMEs plan to spend an average of £321K on growth strategies over the next year. One in eight (12%) SMEs plan to spend over £1 million investing in growth.

SMEs plan to grow online but curb talent spend

A third of businesses want to expand their customer base (33%) and grow their current products and services (29%) in 2023, while also reducing costs to combat the cost-of-living crisis (30%).

To reach their goals, business leaders plan to invest in their online presence. One in four SMEs (26%) will put money into improving or building websites and apps over the next year. This is in addition to investing in digital marketing (24%).

Interestingly, following the ‘Great Resignation’ fears that saw SME-leaders prioritise talent spend in 2022, talent acquisition and increases to employee salary and benefits are likely to see the least investment (17% each respectively) over the next year.

Business leaders continue to put hands in their own pockets to invest

SMEs will often turn to business savings (27%) or various forms of business finance (e.g., asset finance – 11%) to meet their goals. However, nearly two out of five SMEs (18%) will turn to their personal savings and over one in ten will use their own overdraft (12%) to meet business costs.

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Barriers to growth

Despite optimistic plans to invest heavily in the coming year, the biggest concerns SMEs are faced with are high energy costs (24%) and double-digit inflation rises (24%). This will represent the biggest barrier to business growth in 2023.

Those concerned about inflation costs estimate it could lead to delays in existing projects (19%), missed opportunities for growth (21%), and difficulties securing new deals (20%).

Tim Boag (pictured), group managing director of business finance at Aldermore said: “SMEs are the backbone of our business community and their ambitious growth plans over the next year bodes well for the economy, however they also face challenges brought about by high inflation and soaring energy costs.

“At Aldermore, we’ve supported SMEs through challenging times. It’s great to see from their plans that a digital presence for many has become a major priority, as consumer expectations have evolved post-pandemic.

“For business leaders, there are many sources of investment, be it utilising savings or accessing a range of specialist finance products; and at Aldermore we remain fully committed to backing businesses to realise their ambitions.”

By Lisa Laverick

Source: Asset Finance International

companies
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Survey: Two-thirds of British SMEs not confident on net-zero pathway

Only one-third of decision makers at UK-based small businesses say they are extremely confident about how to reach net-zero emissions.

That is a headline finding from BSI’s new net-zero barometer, which polled 1,000 senior decision-makers at small and medium-sized businesses (SMEs).

Awareness of the importance of transitioning to net-zero, the barometer survey found, is at al all-time high. 82% of those polled said it was important to set and achieve net-zero targets – triple the proportion who agreed in 2020. But the survey revealed an awareness-action gap.

BSI found that many SMEs have already tackled low-hanging fruit, such as reducing waste (44%) or fitting energy-efficient lighting (38%). Only 17% of those polled said they have not made any key changes to become more sustainable.

But the survey found that half of SMEs do not yet have a net-zero plan or policy. Moreover, only one-fifth of SMEs are measuring and reporting progress to cut emissions in a standard way. These findings suggest that many businesses are yet to embed the net-zero transition into their strategic planning, despite increasing pressure to do so from customers and investors.

BSI found that the biggest challenge preventing SMEs from developing and delivering a credible pathway to net-zero is the fact that they need to dedicate resources to respond to the cost-of-living crisis and energy price crisis.

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Facing these challenges – and other perceived barriers such as a lack of Government support and a desire not to be seen as greenwashing – only one-third of the SMEs polled would describe themselves as extremely confident in reaching net-zero.

“At a time where the attention of many SME leaders is being diverted by economic pressures, they want help to navigate a path that is both credible and realistic,” said BSI’s director-general of standards, Scott Steedman.

“SMEs want to understand both where they are on this journey, and what that transition means for them and their stakeholders. They can benefit from having a clear roadmap to how they’re going to achieve net zero, not only in their own operations, but also in their supply chains. Our research shows that with the right guidance – including the use of standards – SMEs are more than able to rise to this moment.”

Earlier this year, the SME Climate Hub posted similar findings from its own study of 350 businesses. That study found that seven in ten firms need more available funds to transition to net-zero, with most citing increased difficulty securing funds in the current economic climate.

By Sarah George

Source: edie.net

business
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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

survey
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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

late payments
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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

SMEs
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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

UK SMEs
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UK SMEs Forced To Borrow Or Raise Almost £50k To Survive Inflationary Crisis

New Nucleus Commercial Finance research highlights the scale of the challenge facing UK SMEs

  • 65% of SMEs are finding the current cost-of-living crisis is proving more of a burden on their business than the pandemic lockdowns
  • Just 33% believe the cost-of-living crisis is proving less of a burden than the pandemic lockdowns
  • An average of £34,433 has been borrowed or raised to support the impact the current energy/inflationary crisis has had on the finances of their business by SMEs.
  • This rises to an average of £49,613 among small/medium sized businesses (companies with 10- 249 headcount)
  • Almost two thirds (64%) of small/ medium sized business have had to borrow or raise any money as a result of the current energy/ inflationary crisis

When asked what single measure would provide the greatest boost to their business at the present time – the top 5 options among small and medium sized businesses were:

  • Re-joining the European Union (19%)
  • Having more tax incentives for innovation/ investment (18%)
  • Improving internal IT/ tech capacity and capability (11%)
  • Having more time to concentrate on innovation and growth (9%)
  • Having greater childcare support from the government (9%)

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Chirag Shah, CEO and Founder of Nucleus Commercial Finance commented: “The scale of the current economic challenge facing UK SMEs vastly exceeds that of the pandemic according to those at the coalface. This is forcing businesses across the UK to reassess their investment and growth strategies, closely examine their overheads, and, more often than not, lean on additional finance just to keep the lights on. In fact, the average amount that small and medium sized businesses have had to borrow money as a result of the current energy and inflationary crisis is now a staggering £50,000. As the crisis continues, the situation is becoming increasingly perilous and UK SMEs need help, badly.

“While some investment commitments were set out in the recent Budget in a bid to kickstart the economy – there is no silver bullet. Crucially, what cannot be allowed to happen is stagnation. Failing to properly support SMEs in the short-term will wreak havoc on the long-term prospects for the UK as a whole.”

BY CHARLOTTE WELTON

Source: Columnist 24