If you believe the reports in the media, 2008 will be the worst year ever! “We’re in the middle of a credit crunch,” we’re told and “Borrowing is harder with higher interest rates.” Not to mention all the other scare stories. Who knows how true these statements are. It could be absolute fact or it could just be the media stirring up trouble – three businesses I was chatting to over the weekend have had the best January ever and we’ve not done too badly ourselves!
Whatever the situation though, what’s the impact on small businesses and how will they fare in 2008? Here’s my predictions for the coming year…
Over the last few years, the numbers of people starting up a small business has been increasingly to around 400,000 businesses a year, meaning there are now approximately 3.9m small businesses now in the UK. Of the numbers that start-up, some fail and some survive – and I can’t see that changing much in the future. However, what is certainly likely is a drop in the amount of support out in the market place for start-ups and small businesses.
Let’s look at the financial support first. Over the last year or so, the way money is lent to business owners has changed. These days, banks are much more likely to ask the business owner to put up 50% of the money required for the business so that the bank’s risk is shared. The interest rate you’re likely to be offered will also be dependent on the risk too. If you’ve been running for a while and can show a good track record, the rate you’re offered will be better than someone who has just started up. Banks have been burnt and they’re trying to reduce their risk as a result.
There are also less and less grants around too. I meet new businesses constantly who ask me where they can get a grant from to help them start up. Well, sorry guys, but these days grants are few and far between. There are a couple still around but not very many. Check out www.j4b.co.uk to find ones that you might be eligible for.
What about Government support? Well that’s changing too. In 2007, the government identified that there were hundreds of different support bodies for businesses all offering different services and many duplicating what someone else was already doing. As a result of this, the number of support bodies was reduced significantly to a more centralised approach meaning that no matter where a business owner lived, s/he should receive the same support service.
Business Links also moved to a brokerage system. In other words, a business owner would receive detailed analysis and support from a Business Link advisor in the first instance and then once the area the business needed help with was identified, the advisor would provide the owner will three suppliers picked from the supplier matching service who could help them on a private basis with their requirements.
For the business owners, this increases choice as they have support from a recognised expert in an area where they need help. For suppliers, they can register with the Supplier Matching Service for free and promote their business additionally. Just go to www.suppliermatching.co.uk to find out more.
Business Link also continue to provide support for start-ups too, but this is usually no longer free of charge and if the support is required it must be paid for.
For start-ups and small business owners the emphasis is now on being more self-sufficient and creative in the way problems are solved. If help and support is needed, paying through it through government support or the private sector seems to be the way forward.
My predictions for 2008 then are that this trend will mean in slow down in the numbers of people starting up in business. Those that do will be the ones with money behind them meaning they’re less likely to take on loans or at the very least will be able to provide 50% of the funding required. Those without financial backing may still want to start-up, but may be hampered by the difficulty in finding funding.
With small businesses, the ones that will do well this year will be the ones that are self-sufficient, creative and are prepared to pay for help if they need it. I don’t think the opportunities will present themselves so easily this year, so 2008 is very much the year of looking for those opportunities, taking hold of them and driving your business forward.
Best of luck with that and I hope 2008 is a prosperous one for you.
What does 2008 have in store for small businesses? - To learn more about this author, visit Helen Dowling's Website.
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