Does Macro Economics Really Affect Small and Medium Sized Businesses, Say the Size of National Debt?
CHANCELLOR Alistair Darling has ramped up the national debt (to £700+bn to prevent the country slipping further sliding into a long, deep recession.
In his pre-Budget report (Mon 24 Nov 08), billed as the most important in a generation, Mr.
Darling gave some brief reasons and details of action in the hope to maintain employment, and inject cash into the UK economy.
One tactic was Darling's 2.
5% cut to VAT from December 1 until 1 Jan 2010 to encourage consumer spending, at an estimated cost to the UK Government of £12.
5bn.
He focused on a capital spending programme on major (construction) projects to renovate the country's infrastructure (motorways?).
There was a modest move at the time in a positive direction by the financial markets - the FTSE 100 Index rose 80 points (to 4130).
However the Chancellor's bombshell was that UK's debt as proportion of GDP will rise from 41% to a high of 57% in 2013.
Darling argued it was essential to "act now" and he was willing to do "whatever it takes".
He may be right.
But...
"What price will SMEs pay for this move in 10 or 20 years time?" Darling was reported saying that he wanted "to take fair and responsible steps to support business while putting the public finances on the right path for the future.
" Small and Medium Sized businesses (SMEs), make up 99% of all UK businesses.
How have SMEs been supported by the Government's action? Consumers have arguably had a little more spare change in their pockets, but this ends 1 Jan 10.
SMEs act as low cost tax collectors for the Treasury.
Why couldn't an additional 2.
5% have gone to help SMEs for the work of collecting, reporting and paying the taxes, as a further measure to the 2.
5% given temporarily to consumers.
That would be real support for real difficulties i.
e.
help with the burden of bureaucracy.
In a global downturn businesses need expert advice and assistance to
Where can one find a good plan in these challenging times? If lost, see direction.
A professional business advisor is worth their weight in gold in good times and bad.
Regional Development Agencies keep registers of business support professionals or you can try new services online like Business Support Finder.
A common example of a problem in a downturn is a problem with the bank.
The relationship with a bank especially if liquidity is a problem and the business is reliant on bank borrowing for at least some of its working capital.
A business adviser can create a 'way out' based on the businesses' opportunities and core competencies.
Banks are less likely to behave badly if they see a professional 'outsider' involved in the business.
Keeping the bank informed is key.
What you tell them, and how, is what a good business adviser should be skilled at.
They should know what the best approach with your bank should be.
Raising fresh capital finance may be a necessity.
Some finance could free the business from uncompetitive contracts or banking facilities.
Transforming a bank relationship, or supporting a business to secure better terms in a refinancing package are just one or two examples of how getting 'experts' to help, and keeping them in your corner for when you need them, can really transform your business performance.
The best place to begin outsourcing business support is to involve a Business Mentor.
Some business owners use family members, but this is often a bad idea, since the family member may be good at his business but not at yours, or managing his staff but not directing you.
It is always better to involve a professional, experienced at providing high quality support from outside the business.
Julian Rowe, Business Correspondent, Business Service Finder.
In his pre-Budget report (Mon 24 Nov 08), billed as the most important in a generation, Mr.
Darling gave some brief reasons and details of action in the hope to maintain employment, and inject cash into the UK economy.
One tactic was Darling's 2.
5% cut to VAT from December 1 until 1 Jan 2010 to encourage consumer spending, at an estimated cost to the UK Government of £12.
5bn.
He focused on a capital spending programme on major (construction) projects to renovate the country's infrastructure (motorways?).
There was a modest move at the time in a positive direction by the financial markets - the FTSE 100 Index rose 80 points (to 4130).
However the Chancellor's bombshell was that UK's debt as proportion of GDP will rise from 41% to a high of 57% in 2013.
Darling argued it was essential to "act now" and he was willing to do "whatever it takes".
He may be right.
But...
"What price will SMEs pay for this move in 10 or 20 years time?" Darling was reported saying that he wanted "to take fair and responsible steps to support business while putting the public finances on the right path for the future.
" Small and Medium Sized businesses (SMEs), make up 99% of all UK businesses.
How have SMEs been supported by the Government's action? Consumers have arguably had a little more spare change in their pockets, but this ends 1 Jan 10.
SMEs act as low cost tax collectors for the Treasury.
Why couldn't an additional 2.
5% have gone to help SMEs for the work of collecting, reporting and paying the taxes, as a further measure to the 2.
5% given temporarily to consumers.
That would be real support for real difficulties i.
e.
help with the burden of bureaucracy.
In a global downturn businesses need expert advice and assistance to
- acquire new customers,
- further drive down costs, and
- deliver new products and services.
Where can one find a good plan in these challenging times? If lost, see direction.
A professional business advisor is worth their weight in gold in good times and bad.
Regional Development Agencies keep registers of business support professionals or you can try new services online like Business Support Finder.
A common example of a problem in a downturn is a problem with the bank.
The relationship with a bank especially if liquidity is a problem and the business is reliant on bank borrowing for at least some of its working capital.
A business adviser can create a 'way out' based on the businesses' opportunities and core competencies.
Banks are less likely to behave badly if they see a professional 'outsider' involved in the business.
Keeping the bank informed is key.
What you tell them, and how, is what a good business adviser should be skilled at.
They should know what the best approach with your bank should be.
Raising fresh capital finance may be a necessity.
Some finance could free the business from uncompetitive contracts or banking facilities.
Transforming a bank relationship, or supporting a business to secure better terms in a refinancing package are just one or two examples of how getting 'experts' to help, and keeping them in your corner for when you need them, can really transform your business performance.
The best place to begin outsourcing business support is to involve a Business Mentor.
Some business owners use family members, but this is often a bad idea, since the family member may be good at his business but not at yours, or managing his staff but not directing you.
It is always better to involve a professional, experienced at providing high quality support from outside the business.
Julian Rowe, Business Correspondent, Business Service Finder.