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Cost cutting is a priority for almost every British company at the moment. However, a surprising number of small firms have bucked this trend and spent money on innovation. A recent survey conducted by the Federation of Small Businesses (FSB) found that 53% of firms launched new or improved products and services during 2008. As a result, 27% of the 10,000 respondents said their profitability increased and 30% saw better sales volumes in 2009. Entrepreneurship clearly has a major role to play in creating wealth and jobs in the UK, but the lack of available capital is getting in the way. Over 30% of the firms that borrowed finance in 2009 said they had been charged more than in previous years. An additional 49% said they had not taken out any loans at all in the last 12 months. This is most likely due to the prohibitive cost of finance. Peachy keen But this did not deter Cardiff-based entrepreneur Shazia Awan. When the banks refused to finance her new PeachyPink clothing business, she dipped into her own savings and approached friends and family for help. Ms Awan now supplies Debenhams with an innovative range of shaping and slimming garments that help to reduce cellulite. And this is only the beginning. The 28-year-old entrepreneur has big plans for her business and has set her sights on a turnover of £5m next year. “I am extremely ambitious and have proved the banks that wouldn’t back me wrong,” she told WalesOnline. Unfortunately, few people have access to this kind of financial backing. The UK needs to find a way of making more capital available to start-ups, or entrepreneurs may choose to build their businesses elsewhere. Stimulus package The FSB has called for a stimulus package that includes a freeze on employers' National Insurance contributions and a National Insurance rebate for new jobs. This could make a big difference to small companies’ economic prospects. In fact, over 31% of firms polled by the FSB said a cut in employers' National Insurance would boost their profitability. Tax cuts would also provide more capital for firms to expand and employ more staff or increase the wages of existing employees. Until such measures are put in place, companies should look to each other for financial support. Crunching costs Entrepreneur Darren Fell made it his business to help self-employed individuals cut their operating costs. His online accountancy service Crunch.co.uk was launched in April this year to offer clients and end-to-end accountancy service that has all “the benefits of professional accountants without big bills”. Customers pay a fixed monthly fee of under £60, which includes all annual company returns such as PAYE, Corporation Tax and VAT. Crunch.co.uk has attracted investment from a variety of high-profile online entrepreneurs including Skype Chairman Michael van Swaaij and Paul Birch, the co-Founder of social networking site Bebo. It is encouraging to see successful companies actively supporting the start-ups that are following in their footsteps. Small firms around the UK are pioneering new ways of building the economy and creating much-needed jobs. While some have been fortunate enough to find benefactors, most have had to put their growth plans on hold. There should be more measures in place to ensure that the UK’s enterprising spirit is not smothered by a lack of capital. With Careers and Jobs, you can view all the latest jobs, browse jobs in the UK by sector and keep up to date with the latest UK jobs news. You’ll also find expert career advice and help with CV writing to help land that dream job.
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