“Let’s move beyond Brexit and focus on the real priorities of businesses across the country,” says Forum of Private Business

Investment is on hold, and no one is taking risks in the current environment, because Brexit uncertainty has stifled businesses, according to leading business support organisation the FPB (Forum of the Private Business).

The Forum’s comments came in advance of this week’s manifesto launches, and as the organisation prepares to launch its key campaigns for 2020.

Ian Cass, chief executive of the Forum, “Our members are telling us that Brexit uncertainty has held them back from taking important investment decisions and they want the government, whoever that will be after 12 December, to focus on domestic policies to support them.

“The recent delay from 31 October has made things worse as well because the government held lots of seminars and events designed to prepare businesses for an exit on that date.”

As part of the new focus the Forum wants from the government, it is launching its election ‘wish list’, which will align to its 2020 campaign priorities.

Ian Cass added: “We need the government to look beyond Brexit, and move onto domestic issues to solve the real problems affecting business, so we hope the government takes heed of our wish list.

“Our challenge to all the parties is this: Can they get their small business manifesto onto one sheet of A4, telling small business in a clear and simple fashion what benefits the biggest contributors to the UK economy are going to see if we vote for them?”

Hitachi Capital throws financial lifeline to flood-stricken small businesses

With many areas of the country facing further flood alerts over the next few days – with 115 areas expected to be hit – leading asset finance firm Hitachi Capital has set up a multi-million zero percent interest Rural Emergency Fund to support flood-hit rural and local businesses in meeting unforeseen costs.

Gavin Wraith-Carter, general manager at Hitachi Capital Business Finance comments: “Hitachi Capital has a long-standing involvement in the agricultural and commercial industries and it is important for us to stand shoulder to shoulder with them when they tackle the implications of extreme weather which can put their business at risk. The feedback from our approved brokers and vendors is that farmers and rural businesses are going to need financial support through this tough and challenging time.

“We are very aware how vital cash flow is for many farmers and small business owners, and we want to go beyond the call of duty and be there when they need us, supporting rural businesses in funding unforeseen capital expenditure needs.”

With this in mind, Hitachi Capital have allocated short-term funding of £5m to assist rural and local businesses who need to replace or invest in equipment that may be required as a result of the flooding. This is the third time that Hitachi Capital has offered short-term funding of this kind to help support local businesses through these incidents of bad flooding.

Wraith-Carter adds: “The full cost of the interest during this period will be covered and in these situations all normal fees will be waived. In the short term we are also able to provide immediate financial assistance where cash flow issues have arisen through a number of solutions, including three-month repayment holidays where required.”

Further short-term solutions are also being made available by Hitachi Capital Business Finance to help with existing financial commitments, in order to manage cash flow and retain a clean credit history.

Rex Tattersall, director at Rural Finance said: “When rural communities face extreme weather it is important for those that support the community to step forward and make a difference. It is not only the farming community that is suffering in the rural sector. The stress and worry that SME’s operating in flood-stricken areas experience have very real business consequences. When your business premises or assets are damaged, income streams are severely affected and any help that can be given to help SMEs get back to full operating strength will be warmly welcomed. Hitachi Capital’s Rural Emergency Fund sets a real example in the market.”

Hitachi Capital have allocated £5m of short-term funding at zero percent interest to assist farmers who need to replace or invest in equipment that may be required as a result of the flooding. The full cost of the interest during this period will be covered, and it is available on any appropriate asset purchased through a six month hire purchase facility with a single capital repayment at the end of the agreement.

Customers will have the option to request extensions of this agreement at the end of the period.

Major trial looks for UK companies wanting to boost productivity beyond Brexit

50 companies and 1500 managers across England are being invited to test the innovative STAR® Manager programme developed by Leamington-based global coaching company Notion.

The Government is backing the trial through Innovate UK with a £315,000 grant under the second round of the Business Basics Fund that explores ways to boost the UK economy.

Results will be analysed by the London School of Economics to assess whether STAR® Manager works as well for SMEs as it has already done for larger enterprises.

Notion and the LSE teamed up with Business Solutions, the commercial arm of the Growth Hub at Coventry & Warwickshire Local Enterprise Partnership (CWLEP) to form a consortium to run the project and secure funding.

They are seeking companies with between 10 and 250 employees, a turnover of less than £25m and assets below £12m to take part in the trials. They can come from any sector.

STAR® Manager is designed to embed transformational change across an organisation without taking managers out of the business for training. Instead, managers follow a blend of 18 different activities that will instil new habits while at work.

The six-month programme can be completed with a commitment of less than one hour a week and leads to improved performance, productivity, creativity and employee engagement as well as reduced costs.

Companies are already reporting impressive results from the STAR® Manager programme: 63% of managers report that their team has shown increased problem-solving skills, 60% say their personal productivity has increased and 47% that their teams have become more engaged.

Dominic Ashley-Timms, managing director of Notion, said: “This is a really exciting project and we are delighted to offer SMEs the opportunity to embrace changes that will really drive the productivity and creativity of their businesses forward.

“STAR® Manager is a unique programme that focuses on building behavioural change. It goes far beyond a simple e-learning course, supporting managers to adopt new habits that will add value to the business.

“Activities include workplace missions, quizzes, reflective reviews and access to expert tutors. The programme is fun, dynamic and focused and the results are positive and long-lasting.”

Phil Peak, operations director of Business Solutions said: “SMEs contribute nearly half of the revenue of the UK economy so boosting productivity in this sector is important for the future success of the country.
“STAR® Manager is already delivering fantastic results and it will be interesting to see just how much of a boost it will give to SMEs taking part in the project.

“The beauty of STAR® Manager for SMEs is that it is cost-effective and does not require managers to be taken away from their regular duties, which can sometimes be difficult for smaller companies.
“We are delighted to be part of the consortium that will drive forward growth in this area.”

Companies wishing to participate will be offered STAR® Manager at a reduced cost of £350 plus VAT per person. Applications should be made via the website www.STARmanager.global/SME

Number of UK businesses selling on social to double in the next six months

The number of UK businesses selling via social media sites and apps is predicted to double in the next six months – new research from PayPal reveals.

British shoppers will be able to shop on the social media channels of a further 600,000 UK businesses, as the popularity of mobile shopping expands to new sites and apps. This is in addition to the 24% of British businesses already selling via these platforms.

PayPal’s annual Commerce Index, which surveys the latest trends in mobile commerce across the globe, found an additional one in five UK businesses (22%) plan to sell via social in future.

Currently 8.4 million British consumers shop via social media, with Facebook, Instagram and Snapchat being the most popular channels. A fifth of those already purchasing through social do so weekly, with individual social spending averaging £71 monthly.

Yet whilst the research reveals positive intent amongst merchants, it also reveals the proportion of UK businesses selling through social media (24%) lags significantly behind the global average of 35%.

Of the 11 countries surveyed, the UK was found to have the greatest consumer concerns about security when purchasing on mobile, with key barriers including a fear of having financial information linked to social media accounts.

Commenting on the findings, Nicola Longfield, senior director of small and medium businesses at PayPal UK, said:

“As Brits continue to lead increasingly busy lives relying on their smartphones more than ever to help them make the most of their time, it’s important that businesses are in a position to cater for this. Our data reveals a substantial rise in the number of businesses that plan to sell through social media over the coming six months, capturing a consumer’s attention in the very place they go to for inspiration.

“However, the UK falls some way behind the global average for selling via social, something which must be addressed if businesses are to compete and make the most of their selling potential. Security remains key for consumers shopping on social and companies of all sizes must address these fears, offering mobile-friendly payment options like PayPal to help instil trust from shoppers and ensure purchases are made securely.”

Maryam Ghani of Prestige Flowers explains how embracing social commerce has helped to reach a wider community:

“Here at Prestige Flowers, we want our customers to have the best possible shopping experience. Social media is so much part of people’s everyday lives that we have made social our shop window, winning sales from consumers who are actively searching on channels like Facebook to make a purchase. Letting people shop through these sites turns browsers into buyers – meaning we’ve fulfilled over 3 million orders since 2011. Our social platforms are where we not only gain sales, but also reach new customers and grow our social following.

“Partnering with PayPal has been an important part of this journey, as having a secure way to complete a purchase has given customers the confidence to shop and pay on social sites – especially when many of these transactions are made on a smartphone.”

UK SMEs face debt burden of £23.4bn

The UK SME late payment debt has risen to a staggering £23.4bn, up £10.4bn on the £13bn owed in 2018 – according to figures released by Pay.UK, which runs the Bacs Direct Credit and Direct Debit payment services.

On top of that, the research shows that UK SMEs are now facing a total bill of £4.4 billion a year, just to collect money they are owed, with around a quarter (22%) of those waiting on funds spending more than £500 a month chasing payments.

And the number of businesses experiencing overdue payments has hit 54 per cent among small to medium size companies; that’s the highest level since 2015, when the figure stood at 55 per cent.

The average late payment debt burden has also increased to £25,000 per company, up from just over £17,000 in 2018, with SMEs reporting that, on average, a debt burden of £35,000 could jeopardise their business.

Of those SMEs impacted by delayed payments, 63% say they have a negative effect on their businesses. More than a third (35%) are forced to rely on bank overdrafts, while almost a quarter (24%) say that being paid late forces them to hold off paying their own suppliers.

Paul Horlock, Pay.UK CEO, said: “It is concerning that so many smaller businesses are struggling because of late payments in 2019, especially as there are so many ways they can now get paid. Offering customers a choice of payment or automated options can help remove barriers to make sure a bill is settled on time.”

The research also reveals that 13% of SMEs experiencing late payments struggle to pay their business bills, 12% have difficulties paying their own staff on time, and 10% have to rely on invoice financing to draw cash into their businesses.

Other headline findings from the Pay.UK Late Payments research include:

• Eight out of ten private sector late payments are owed to SMEs by other SMEs

• 78% of SMEs say they are being forced to wait a month, or longer, beyond agreed payment terms before being paid

• Some 45% of SMEs say they are being kept waiting two months or more before being paid

• 24% of business owners say they take a cut in their own salaries just to keep cash inside their businesses.