Brexit makes small businesses even more crucial to our economy
Marmite-gate might be over, but it has highlighted the increased responsibility being placed on the shoulders of small business owners in the UK.
When Unilever tried to hike the prices of many of our favourite products, including Marmite, Tesco suspended online sales, refusing to pay more.
The spat has now been resolved, but it is a great example of how big businesses can struggle with the post-Brexit vote uncertainty. Not only does this raise a few warning flags about the ability of big corporations to cope with change, but it also shows the importance of the role small businesses play in keeping our economy healthy.
The 99 per cent
Jonny Dunning, CEO of weliketowork.com, believes small businesses are key, “99 per cent of all businesses in our country are classed as small or medium enterprises. They are often referred to as the engine room of our economy and rightly so as they employ more than half of all private sector workers and account for a decent proportion of the UK’s GDP. With this in mind it stands to reason that if we focus on helping small businesses grow, our economy is much more likely to stay healthy if big companies have a wobble”.
Brexit is making trading difficult for many small businesses and Dunning says uncertainty is to blame and is making long-term financial and business planning difficult, “The uncertain future facing the UK is making small business owners cautious. It’s not easy to commit to long term financial planning or investing in growth when the future’s so unclear. But ironically it’s now that small businesses owners need to be more ambitious, creative and productive than ever before.”
Small businesses contributed £1.8trillion to the economy in 2015 (source: gov.uk - Department for Business Innovation and Skills), up from £1.2trillion in 2016, and represented roughly half of all private sector turnover. But despite the levels of growth over the last 12 months, committing investment in hiring full-time staff might seem like a scary prospect for a lot of small business owners right now.
Minimising financial risk
Dunning believes there is an option for small businesses to continue to push for growth and productivity without having to take large financial risks. By using a large network of freelancers in the UK, it is possible to outsource small, manageable projects, which allow businesses to stay productive.
“Small businesses owners can stay productive by tackling their objectives in smaller chunks. For example, hiring a permanent member of staff is not an option for a lot of small businesses at the moment. But offering project work to a freelancer can result in the same outcome for a fraction of the cost.”
Dunning continues, “It’s possible for a small business to outsource almost anything to a professional freelancer: web development, graphic design, bookkeeping, HR. What I think is really exciting is that a few small projects can kick-start growth in a small business, which can then create opportunities to hire full-time employees where this would previously have been out of the question”.
According to IPSE, the body representing freelancers in the UK, there are around 2million freelancers in the UK, covering almost every professional service from web design to accounting and HR. Their 2015 Freelancer Survey showed that alongside full time professional freelancers there is a huge resource of stay-at-home parents freelancing around raising their families, recently retired professionals or full-time employed people earning a second income by freelancing outside of their normal working hours.
Freelance workers key to filling skill gaps
The ability to reach skilled workers in the UK could increase in importance if freedom of movement is restricted to and from the EU. Dunning believes this could lead small businesses to find new ways to fill their skills gaps with the use of freelance workers being an ideal, flexible option. “There is a real concern about the UK’s skills shortages getting worse if we’re not able to attract workers from the EU. However UK small businesses could get a real boost from offering project work like website design, marketing, accounting or HR to talented UK freelancers like stay-home parents, who typically would be out of the reach of their traditional recruitment options”