Expert View: Mike Cherry, Federations of Small Businesses

A step up solution

10th November 2017

With a record number of people choosing to strike out on their own, growth potential in the small business community is stronger than ever.

We’re currently witnessing an explosion in the number of people becoming their own boss and starting a business from their kitchen table. The Step Up report provides a great opportunity to showcase some of the UK’s most innovative and inspiring home-based businesses. It’s these kinds of companies that are helping to drive economic growth, raise productivity and create enterprise. They deserve to be celebrated and their ambitions to grow must be supported too.

It’s not hard to see why starting out at home is an attractive option for UK entrepreneurs. There are significant savings
to be made on commuting, o ice rental and business rates. Many people also benefit from the extra flexibility of working from home. Home businesses play a valuable role in opening up employment or a way to create income for those who otherwise might not be in work. This has resulted in growth of those who are economically active, and provides new life chances for older people as well as unlocking some of the significant untapped potential of female entrepreneurship.

Home-based businesses matter and we need to make it as easy as possible for them to succeed and meet their ambitions.

I’m heartened that this report finds a great deal of optimism among the one-fi h of businesses considering moving
out of their home base and into business premises. These commercial space-seekers expect to step-up what they do, making significant gains in turnover and profit, and many have an appetite to take on sta – all of which is positive news for our local communities, but also for our economic health. Yet, barriers to their success remain and there is more that should be done to support home businesses to move into new premises, take on employees and grow.

The biggest barrier facing micro and small firms that want
to move is the high cost of real estate and availability of suitable premises. One of the best ways to support small firms would be to increase the availability of shared workplaces, which at the moment are heavily concentrated in a few main centres. Local authorities, particularly those in urban areas, should work with enterprise support networks and other organisations to increase the number of suitable premises and shared workspaces for local entrepreneurs.

Taking on an employee for the first time is a major milestone in accelerating business growth. But the costs of employing someone are now rising fast, and are likely to continue to increase. The Employment Allowance, which became available to businesses in 2014, is a helpful way to incentivise small businesses to take on staff. We want to see the Government increase the allowance to o set the recent increase in employment costs, allowing more home-based businesses to expand.



As many business owners will know, self-employment can
be a lonely profession. But working in isolation shouldn’t mean being cut o from collaboration and support. Home- based businesses should consider joining a local business organisation, such as FSB, to gain that network of local peers to bounce ideas off, get advice and propel their business forward. Alongside providing opportunities to meet people in similar situations, all entrepreneurs at times need support and advice when starting and growing their business. Less than half of businesses in 2014 accessed any support when starting up. FSB believes Government must continue to promote business support to small firms including committing ongoing funding to growth hubs and a better signposting to online help and resources.

As this report demonstrates, home-based businesses play an important role in the UK’s thriving small business community. If we want the UK to be the best place to start-up, run and grow a business, we must support not only home-based businesses but also their ambition to grow and expand.


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