FBS Small Business Index

The latest FSB Small Business Index has found that times are tougher than ever for small firms after two difficult years.

The survey of 1,500 UK small firms, conducted by the Federation of Small Businesses (FSB), finds that SME confidence has been in negative territory for nine consecutive quarters – since July 2018. It comes as small business revenue growth hits an all-time low and staff lay-offs hit an all-time high.

The Q3 SBI confidence figure stands at -32.6, down 28 points on last quarter. Only a third (34%) of those surveyed at the end of last month expect their performance to improve over the coming three months. The significant majority (66%) expect performance to worsen.

The findings also show that a record one in four (25%) small firms reduced headcounts last quarter. An even higher proportion (29%) expect to make redundancies over the coming three months; 12% say they expect to let at least a quarter of their staff go.

COVID-related disruption has caused revenue growth to fall to its lowest recorded ebb, with more than half (56%) of those surveyed reporting a drop. A similar share (50%) expect revenues to fall next quarter.

The FSB is warning that any potential economic recovery is stalling ahead of a difficult trading period in the run-up to Christmas and the end of the Brexit transition period. More than half of exporters polled say international sales have fallen over the past three months.

Although the FSB has welcomed the chancellor’s improvements to the current business and job support schemes, it is now calling for new measures, including:

  • Support for those that have received no income support to date;
  • A reduction in the cost of hiring new staff;
  • Lessening the burden of business rates;
  • Providing more resources for those looking to start a business for the first time.

“We must not forget that small firms were already under the cosh thanks to political uncertainty, rising costs and creaking infrastructure well before the Spring,” said Mike Cherry, FSB national chairman.

“The chancellor made some very welcome adjustments to support measures last week … However, too many are still without the help they need to weather current disruption – not least company directors, the newly self-employed, those without premises and those further down supply chains in the retail, leisure and hospitality sectors. An ambitious rescue package for these groups is urgently needed.

“If we want small business owners to create jobs, we have to bring down the costs of employment, starting with employer national insurance contributions. If we want them to invest, innovate and expand, we have to alleviate the strain of wider government-imposed overheads, including those stemming from an outdated business rates system which continues to stifle too many community businesses all over the country.”

Written by Rachel Miller.

New Small Business Leadership and Problem-Solving Programmes

The Department for Business Energy and Industrial Strategy has launched two new small business leadership and problem-solving programmes helping businesses to survive and thrive beyond COVID

The leadership programmes are aimed at helping small business leaders grow their companies in the wake of the coronavirus pandemic :

  • The Small Business Leadership Programme will equip business leaders with the confidence and leadership skills to plan for the future of their business, and ensure that they are in a great position to recover from the impacts of coronavirus. Find out more and apply here.
  • The Peer Networks Programme will focus on helping business owners improve their problem-solving skills, through a series of guided exercises. Members of the programme will be given skills in areas such as leadership and management, sales and marketing that they need to tackle these challenges head-on while growing their business. Find out more and apply here.
Steps to Making Apprenticeships Work in a Small Business
October 29, 2019
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Many small businesses think they don’t have time or resources to support an apprentice, but in fact, taking one on can help grow your business, if it’s done in the right way. 

The following article is by Anthony Impey.

Anthony Impey

As a small business owner, I know only too well that there is never enough time.

The day-to-day necessities of running a business consume every waking hour, leaving little or no room to work on those projects that you would love to do but never quite find the time. Small businesses often give this reason for not hiring an apprentice.

Research by the Federation of Small Businesses earlier this year confirms that management time is one of the most significant challenges that small businesses have with engaging with apprenticeships, with nearly one in three businesses reporting this as an issue. Another survey three years ago painted a very similar picture.

Setting out what’s expected of the apprentice, and the need to balance earning with learning, is crucial to achieving a return on investment as soon as possible.

There are many small businesses that do champion apprenticeships, however, and report positive results for their organisations.  

This raises the question: are apprenticeships a big burden on small businesses or is this a misguided perception?

In my experience, those small businesses that get great results from hiring apprentices do so by following a series of practical steps that are not wildly different from the systems and processes used for their other employees.

While there is a degree of adaptation to support apprentices, this extra effort is offset by the return on investment that begins, for some organisations, as quickly as three months after the apprentice starts.

Step #1: identify the business case for hiring an apprentice

It’s important that there is a solid business need driving the use of an apprenticeship, whether it’s to build the skills needed instead of hiring expensive fully-trained individuals, to develop your competitive advantage through building your own talent or to offer career progression for your existing team.

Step #2: adapt the recruitment process

For apprentices that are starting their first job, a traditional interview may not be the best approach to identify the most suitable candidates.

Simulated work, team exercises and even saying an interview is a mock interview, often produces better results.  

Step #3: kick-start with a tailored induction

While some small businesses may only have a very simple induction process for new team members, it’s essential to have one specifically for an apprentice.

Setting out what’s expected of the apprentice, and the need to balance earning with learning, is crucial to achieving a return on investment as soon as possible.

Step #4: set objectives

As with any member of a team, objectives that stretch and develop an apprentice will underpin their performance.

Linking objectives to their studies will further accelerate the rate that they start adding value.

Step #5: commit to the process of learning

As with many things, you get out what you put into an apprenticeship.

For employers, this means providing apprentices with the time and opportunity they need to study, whether that’s learning from others in the workplace or studying with fellow apprentices in a classroom.

With technology enabling many apprentices to study whenever and wherever, learning can be fitted to suit the unpredictable nature of many jobs.

At the same time, allowing apprentices to put what they have learnt into practice will help reinforce their knowledge and accelerate their positive impact.

Step #6: surround your apprentice with great people

If the size of your team will allow, there are three key roles that will help an apprentice thrive in your workplace:

  • A line manager who understands what the apprentice is studying and champions their development.
  • Someone who can mentor the apprentice’s professional development.
  • A peer who can provide practical support and advice to the apprentice.

The benefit of this is felt not just by the apprentice – those that support apprentices often say how much it has driven their own professional development.

Step #7: work with your training provider

Large employers with several apprentices are able influence the type of training they receive from a training provider.

While smaller organisations lack the scale to do this, they can still build a close relationship with their training provider with regular two-way communication about the progress of their apprentice and the content of the training.  

This will ensure that there is always a close connection between what is learnt off-the-job and on-the-job.

Step #8: get feedback

Regular feedback from your apprentice will enable you to refine and adapt their development and improve the rate at which they build new skills.  

Encouraging their involvement in peer and membership networks, such as the Young Apprentice Ambassador Network, will also empower them to believe their voice matters.

Step #9: foster wellbeing

We know only too well the stresses that can build-up in the workplace. For apprentices, this can be magnified by having to juggle work commitments with learning responsibilities, no matter where they are in their careers.

The transition from school, college or university to an apprenticeship can be very challenging while existing team members who are doing an apprenticeship to upskill may struggle to start learning if they’ve been away from education for some time.  

Being sensitive to these issues and making support easily available will make a huge difference.