Is there a future for the UK’s small and micro businesses?

WORCESTER, U.K. - April 8, 2013 - PRLog -- Many factors will affect the sustainability and profitability of any company but success has been made more difficult due to the long lasting downturn in the economic climate. The UK’s economic growth remained flat overall in 2012 but that can mainly be attributed to the success of the London 2012 Olympics. Once the Olympics was over, figures show that GDP dropped by 0.3% in the final quarter of the year.

Almost half a million new business were started in the UK last year – an increase of 10% on 2011. This sounds encouraging but could the increase simply be due to the current state of the British financial situation? More and more people are finding it difficult to make ends meet and have been attempting to improve their own cash flow by starting fledgling companies and side-lines in order to supplement their income.

However, latest estimates indicate that around 1 in 3 of these businesses will fail in the first year, with that figure rising to around 55% in the first five years

It is true that start-ups and small businesses are key to the country’s economic growth. This has been recognised by the Government, who wish to support enterprise and small business and have introduced new measures to assist aspiring entrepreneurs. 99% of enterprises in the UK are classed as small and medium (SME). There are over 4.5 million of these SME’s operating in the country and over 4.3 million of them are actually micro businesses, who have fewer than 10 employees. Of these, nearly 3.5 million are single person enterprises or sole traders.

Suzanne Thomas is the owner of her own new, micro business.  Based in Worcester, her on line company, The Bea’s Knees & The Cat’s Whiskers ( http://thebeaskneesandthecatswhiskers.co.uk ) specialises in creating personalised typographic artwork for all events and occasions. She has briefly explained how she has managed to survive her first full financial year. “I have had a successful first twelve months and there are many factors which have influenced the survival of the business. Importantly though, in these tough times, people want value for money and a product that not only serves its purpose, but has longevity. They demand good quality but without the high price tag. Consequently, what is key, is that businesses offer a very high standard of product, finish and service, whilst keeping the cost to its customers as low as possible. For me, this means that I ensure that I use high quality materials and employ the services of expert craftspeople, but I make sure that the final product is still priced keenly. There are always savings that could be made and I could increase my net profits but I am guarded against such temptations. For example I could purchase ready-made stock and buy in bulk. However, if I did that, I would lose that luxurious, handmade feel and I am not prepared to do so. I do not charge as much as I could for one of my pieces, nor as much as some competitors for a comparable item. The trade-off is that I am competitively priced and my customers are getting excellent value for money. Consequently, I have had lots of return business and many sales through recommendations”.

There could also be good news on the horizon for many, as the economy has grown slightly in the first three months of 2013. New enterprise will play an integral part in any future growth. The total turnover of SME’s exceeds 1500 billion pounds per year – almost 50% of Britain’s gross business turnover. In short, if you are a budding businessman or woman, there is potentially a rosy future for small and micro businesses. We could indeed see even more success stories and may finally be lifted from recession.