Re-arranging the deckchairs is not enough for UK Business.

UK businesses organisations are urging the future Government to be far more proactive in helping firms to adjust to changes in the global economy. The Confederation of British Industry wants the next government to deliver a programme of targeted subsidies. The purpose: to help firms adopt new technologies. Meanwhile, the British Chambers of Commerce (BCC) has called for the appointment of an ‘AI champion’ to mastermind the uptake of new technologies among SMEs. The Director of policy at the BCC, said this will require “long-term buy-in from our politicians.”

iBOSS Comment:

This is indeed a matter of vital importance for the future of the UK economy. It is essential that businesses thrive and that our exports grow. The objective: to reduce the current balance of trade deficit. This is the only real long-term solution to release all the extra finance needed to achieve all that the politicians are currently talking of funding. All they currently appear to be contemplating is simply ‘shuffling the deckchairs on the Titanic’. One hopes that both politicians and the UK media will pay serious attention to this. If you need help and advice on growing your business call Phil on 07876 503830. Alternatively complete the enquiry form on our web site.

The big banks to reduce funding to Small business?

Raising alternative finance for small businesses.

One of the established ‘alternative’ lenders to SMEs, iwoca, has published a new Broker survey. This claims that the main high street banks are expected to further reduce funding for SMEs. They claim that 77% of SME finance brokers believe high street banks will decrease their appetite to fund small businesses. It also says that 86% of brokers expect to see increased demand for SME finance in the next six months. However 68% believe that, in spite of this the high street banks will still reduce access to working capital for SMEs.

Analysis of Bank of England data shows that 77% of gross lending went to larger firms last year. In contrast the total value of lending by the big banks to SMEs in the first quarter of 2023 has fallen. This is by more than £1bn over the same period i.e. from £15.5bn in Q1 2023 to £14.2bn in Q1 2024.

iBOSS Comment:

The decline in lending to SMEs by high street banks has led to a rise in the popularity of specialist lenders. Some 59% of SME lending now comes from outside the big banks. These specialist lenders have proliferated, particularly since covid, with iwoca being just one of them. Indeed this has raised a new problem. That is to determine which of the ‘alternative’ lenders offers the best option for a particular business. Here is where our associate company BFS, with their experience going back over 20 years, can be instrumental. They can ensure that the best funding option(s) is chosen. For a free consultation fill in their enquiry form at www.bufinserv.co.uk or e-mail enquiries@bufinserv.co.uk and they will get back to you.

#businessfinance #alternativecommercialfinance #businessloans

Report that UK SME management have below average skills.

According to the Office for National Statistics (ONS) the decision-making skills of the worst-performing UK SMEs were well below average in 22/23. They were more likely to make guesses when faced with challenges than make decisions based on business analysis. The survey found that, although management had made an improvement on the previous year,  family-owned businesses had lower scores compared to those run by career managers. Interestingly foreign ownership had a positive impact. The main barriers to improvement were being too busy, not seeing the need for improvement, and concerns about cost. The survey also revealed that small firms and manufacturing companies had poorer management practices. The ONS highlighted the importance of continuous improvement and performance measurement.

iBOSS Comment:

Based on our experience this conclusion by the ONS is a rather harsh assessment. There are undoubtedly many SMEs with highly competent management as can be seen by improved performance over the first quarter of 2024. (One has to wonder in fact whether they have included Government performance in their survey! ). Having said this, the ONS comments about cost and lack of time are regular factors we recognise. It’s all too easy for hard working mangers to miss the obvious inefficiencies. This is where we at iBOSS can help with our long experience of business management.

If you feel that your business is not achieving its full potential but can’t put your finger on the reason(s) then give us a call at iBOSS. For a free consultation and to learn how we can help simply call Phil Jones on 07876 503830 or e-mail him on phil@theiboss.co.uk.

FSB reports SME confidence climbing.

Charting improving performance
A sign of growing confidence

The FSB reports that confidence among small businesses has climbed in the first three months of 2024. Their index returned to positive territory for the first time in two years as business confidence increased by 20 points between January and March. The increase took the balance of firms feeling confident to 5.5 points. The most confident sector was manufacturing, which rated 19.1 points. Having said this, when questioned about challenges, 83.7% said that increases in operating costs were their main concern. This particularly related to rising utility and labour costs. The Policy Chair at the FSB, said that “The rebound in confidence levels in most sectors is a good indicator that the shallow recession recorded at the end of 2023 is firmly in the past. Many SMEs are now keen to look ahead to expansion and better trading conditions.”

iBOSS Comment:

Generally encouraging news, particularly as manufacturing is leading the way. If you need some help, guidance or finance in growing your business then call us at iBOSS for a free consultation. Simply call 07876 503830 or e-mail info@theiboss.co.uk

#growingyourbusiness #businessgrowth #businessadvice

Apprenticeship a better option?

The Telegraph has reported that apprentices are a better option for learning. The claim is that they can out-earn university graduates. This applies to the first 5 years of their working life. Furthermore they avoid the £45,000 of student debt that graduates can incur. Engineering apprentices in the electricity generation, water provision and manufacturing earn an average of £39,200 after five years. This surpasses the estimated £36,500 earned by engineering degree graduates. Apprentices in building and construction also tend to out-earn their university counterparts. Another advantage of many apprenticeships is that they offer more immediate job opportunities. Figures show that 77% of apprentices are in sustained employment one year after completion. This compares with 62.5% of graduates. 

BFS Comment:

Some strong arguments for young people to consider taking an apprenticeship rather than going down the pure academic route. The only thing they miss out on is the ‘Students Union.’ That can be compensated for by local Pubs & Clubs. One advantage of a proper apprenticeship is that it gives experience of work/business at a much earlier stage. Having said this, the perfect solution is what used to be called a ‘Sandwich Course’. This involves part time with an employer and part time at college.

Police announce plans for new anti-fraud website.

Action Fraud replacement

James Thomson, chair of the City of London Police Authority Board, has announced a new £152m anti-fraud web site. This service will replace Action Fraud. The objective is to tackle fraud and cybercrime more effectively. This is in response to MPs on the Public Accounts Committee having described the current reporting system as “unfit for purpose.” Mr Thomson insists that the new service will speed up the time it takes to report offences, keep victims informed of progress and quickly close fraudulent websites and bank accounts.

iBOSS Comment:

Our Associate company, Business Finance Services, suffered a Cyber attack back in 2022. On that occasion, Action Fraud acted swiftly and prevented any serious damage. Anything that can be done, however, to further improve the protection available to SMEs is to be encouraged. This particularly applies when the perpetrators are based overseas!

Many Brits would like to start their own business.

Promoting the concept of setting up a new business

A recent survey, commissioned by AXA, of 2,000 UK adults found that over 50% of them had a desire to start their own business. It reported that one-third of these individuals want to pursue their plans within the next two years. The main reasons for wanting to become their own boss included having freedom to make their own decisions and the possibility of improving their work-life balance. Undoubtedly this is, in part, related to the after-effects of the lockdown and the emphasis that had on the concept of working from home! Interestingly, according to the survey, 16% of respondents already manage side businesses, while 13% are actively saving funds to achieve their future business objectives.

iBOSS Comment on starting your own business:

If you, or someone you know, needs help to start their own business then we strongly advise calling Phil at the iBOSS on 07876 503830 or e-mail phil@theiboss.co.uk for a free consultation on the advice and support we can provide. Our Team at iBOSS have many years of setting up and working with start-up and early stage businesses. We also have long experience of providing help with raising business finance.

Number of UK start-up hits record

Lady with her new start-up business

According to The Independent, record numbers of people are starting new businesses. Also an increasing number are being set up by women or minorities. New business applications jumped in 2020 as the pandemic and ‘Lockdown’ started. New registrations are being filed at a record pace. In a recent survey of 1,300 owners who started their small business last year, women made up 49% . Black entrepreneurs made up 6% of new business owners in 2023. This was double the rate seen before the pandemic. Hispanic entrepreneurs made up 13% of new owners, compared to 8% last year. Meanwhile, 44% of these businesses are being started as “moonlighting”. In other words, entrepreneurs starting a new business while working another job.

BFS Comment:

If you have recently started, or are considering a start-up business, call us at the iBOSS for a free consultation on your plans & ideas.

Company operating profit figures to be standardised by 2027

Companies will have to publish standardised operating profit figures from 2027. This is a new requirement from the International Accounting Standards Board (IASB). The IASB writes book-keeping rules for companies across 147 countries. The aim is to end the discretion of companies to decide what constitutes operating profit in their income statement. Currently, many companies report earnings before interest, taxes, depreciation, and amortisation (EBITDA), a figure that is not defined under IASB rules and can be compiled in different ways. The new IASB rules define mandatory sub-totals for operating profit, which will include depreciation, amortisation, and impairment on goodwill, and profit before financing and income taxes. Common adjustments, such as for currency fluctuations, can only be included in footnotes to the statement.

iBOSS Comment:

All good accountants will be aware of this and will ensure compliance as required.

High banking charges hinder SME expansion

A  study of 3,000 small business owners has found that high banking charges are a bigger obstacle to international expansion than Brexit red tape. It is claimed that last year UK small businesses lost £2.8bn to hidden fees. This resulted in 69% of them being prevented from expanding further. Business owners said they struggle to compare the market. This was due to a “corporate opt out” that allows banks to hide their fees in the exchange rate.

Calls to end ‘Opt out’.

One of the international account providers, is calling on ministers to end ‘the opt out’. Also to ban hidden fees for businesses and consumers. Two-thirds of business leaders agree that ‘the opt out’ should be removed. They believe that regulation should require banks to be transparent about international payment costs. Research shows that, if the cost of international banking services were reduced, 34% of SMEs would enter new markets. Also 27% would hire more staff!

iBOSS Comment:  

Anything that can help to promote exports is to be encouraged. Banks should realise that they also would benefit from this in the future! Short-term pain for long-term Gain! Call us at iBOSS for business planning and advice on Home and Export markets. For help in raising finance click onto this link to our sister company BFS

#businessadvice #businessplanning #businessgrowth #export advice