The micro business economy is desperate for the success of devolution this time around.
The fact remains that 90% of our businesses are micro companies with less than 10 employees and around 45% turning over less than £100,000 per year. In any economy these businesses need every hand up possible to help them secure growth and longevity, but with our lack of economic stability over the past two years, on the back of the Covid pandemic, this is amplified x10.
We came out of societal uncertainty created with Covid and almost straight into economic uncertainty through a lack of local governance. Micro businesses have found it extremely difficult to grow in this vacuum. Although there continues to be a lack of access to any real finance to encourage micro business to expand, there are also other significant issues that have directly impacted to stunt growth.
Economic uncertainty has meant that external buyers have been unwilling to commit to any significant size or long-term contracts with our small companies. As a result, small businesses have found it hard to secure any length on their order books, much beyond a few months. That has made planning, investment in equipment or IT, or committing to additional employment, virtually impossible.
When profit margins are so tight there is no room for poor decisions amongst micro business leaders. Like any other key decision maker in the public or private sector, small business entrepreneurs also need to continually update their knowledge and skills.
Being up to date with changes in legislation, generating innovative solutions and developing strong leadership skills, are all essential elements of effective small business management. With a lack of budget allocation and financial commitment to facilitate business education and support, many small business leaders have been left to try to survive on their own and many have struggled.
With a lack of inward investment, we have a small business economy that depends on providing goods and services to the public sector. This in itself is not ideal, but the lack of procurement of capital projects and service delivery from the public purse in the past two years, means this has hit the sector hard.
Yet, the important thing now is to look forward. We have our government restored and with a long term view, there are important ways in which our MLAs can now get behind the micro business sector and have a positive effect.
Making capital more accessible, facilitating business education and support, promoting entrepreneurship, and implementing policies that encourage growth, reducing regulatory burdens and working on helping small businesses protect their intellectual property, should definitely be somewhere near the top of the list.
- Michelle Lestas is a small business turnaround specialist, published author on small business leadership, and the founder of the MENTupLEADup programme for small business mentors and advisers.