Supporting SMEs - Q4 2024

Supporting SMEs Q4 2024 | A promotional supplement distributed on behalf of Mediaplanet, which takes sole responsibility for its content

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“Exporting is the ultimate growth hack for small firms.”

“The festive season could deliver a critical boost for UK small businesses.”

Tina McKenzie, Policy Chair, Federation of Small Businesses

Michelle Ovens CBE, Director, Small Business Saturday UK

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DEVELOPING TOMORROW’S FINANCE LEADERS. Supporting SME resilience and success.

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A blueprint for small businesses’ exporting growth

The UK SME landscape is shaped by technological advancements. ~Professor David Pickernell VP (Research and Community), ISBE (School of Management, Swansea University)

The untapped global potential of small businesses in the UK is a missed economic opportunity we cannot afford to ignore.

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nly 12% of registered small firms trade internationally,1 but many more than that want to; if we could double that figure, the UK’s overall economic growth would benefit enormously.

WRITTEN BY Tina McKenzie Policy Chair, Federation of Small Businesses (FSB)

small firms. Third, the UK must take the lead in digital trade. Embracing paperless trading across the global supply chain will significantly reduce administrative red tape and improve efficiency.

Fourth, SMEs need immediate support when they venture into international markets. From day one, SMEs should have access to the resources, expert guidance, and support necessary to thrive globally.

Finally, addressing the finance gap is imperative. Better access to trade finance and reduced financial barriers to trading will enable small firms to seize international opportunities by reducing the financial risks that currently deter many from exporting.

Boosting small business exports Small businesses that already trade internationally, or would like to start doing so, will look to the forthcoming Trade Strategy white paper and the SME Command Paper. They are both due to be published in 2025, to fulfil Labour’s commitments to helping increase export intensity among small firms. FSB has identified five solutions to revolutionise how small firms experience the international trade framework. If enacted, they could help unleash the export potential of small businesses.

Empowering SMEs for global growth By cutting red tape and providing clear, actionable support, we can help small firms trade globally with confidence. After all, exporting is the ultimate growth hack for small firms: it allows them to grow rapidly and stay resilient during tough economic times. It’s time for small firms to take their place on the global stage – backed by a supportive framework designed for their success.

Solutions to enhance SME export support First, a cross-Whitehall approach to policy is essential. International trade must be prioritised across all Government departments, which must all be aware of trade goals and actively contribute to trade negotiations. This is to ensure the UK maximises the benefits of Free Trade Agreements.

Second, fostering an open relationship with the business community is crucial. Trade legislation and agreements must be crafted through transparent, honest dialogues that prioritise the needs of

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Reference 1. Gov.uk, 2021. Number of exporting registered businesses in the UK, 2021.

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Without SMEs, the economic growth mission could fail The Government’s economic growth mission may fail if small and medium-sized enterprises (SMEs) aren’t prioritised. Discover why supporting challenger banks and fintechs is key to unlocking further SME potential.

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riving growth, job creation and innovation, SMEs are the cornerstone of the British economy. Yet, they face significant challenges to succeed. One challenge is the ability to access affordable and appropriate finance, crucial to powering their growth.

This is nothing new, but the continuing challenges in access to finance for SMEs are acting as a significant constraint on the SME sector’s growth potential and a drag on the Government’s economic growth mission, especially in the ‘established’ mid-size SME sector.

Key points for SME finance progress The time has come for the Government and regulators to adopt a strategic shift in their approach to tackling SME access to finance and recognising three key points would help in starting to make progress.

The first is that mainstream big banks have become less focused on supporting SMEs in the real economy, and their general retrenchment from SME lending will be very difficult to reverse.

The second is that evidence from countries like Australia suggests that where financial institutions are focused on the domestic economy, there is more lending to SMEs and the real economy Thirdly, government policy and regulatory focus should shift more clearly to supporting the huge success story of the rise of challenger banks and fintechs who have a proven desire to support SMEs. These lenders make up around 60% of UK SME finance.1

Economically, SMEs contribute significantly to GDP.

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A manifesto for change Allica Bank is building a manifesto for change. Opportunities to reinvigorate the SME finance market are almost endless, but we are focused on three themes that can be implemented in 2025 to drive sustainable growth in the UK’s local economies: • Doubling down on SME-focused lending schemes offered by the British Business Bank (eg. significantly expanding the capacity of the Government-backed Growth Guarantee Scheme, which helps SMEs access finance to grow and invest). The UK’s scheme works well but is a fraction of the size of equivalent schemes in other countries.

• Removing competition barriers in the SME banking market. An obvious place to start here is to use new Brexit freedoms to refresh the Financial Services Compensation Scheme (FSCS) threshold to fix the broken business savings market, where SMEs are missing £9 billion in interest a year.

• Directing regulators and policymakers to focus on SME competition and growth. New scale-up units at the Bank of England and City regulators would help to ensure the continued growth of challenger banks and fintechs in supplying finance to SMEs.

WRITTEN BY Richard Davies CEO, Allica Bank

Enough of being an afterthought These key approaches will have the biggest impact on the ability of most SMEs to access suitable finance. It’s crucial they are able to do so. SMEs represent 99.9% of all private sector businesses in the UK and employ around 60% of the private sector workforce – that’s approximately 16 million people.2 Economically, SMEs contribute significantly to GDP. In 2022, they generated approximately £2.8 trillion in turnover, accounting for around 52% of all private sector turnover. The sector also plays an essential role in regional development, with SMEs often being the driving force behind local economies, particularly outside London and the South East.2 However, our view is that, too often, this part of the economy has become an afterthought in policymaking — or, even worse, sometimes forgotten about altogether. The time has come to make sure the SME economy — ‘the real economy’ — features far more strongly in policymaking, particularly when thinking about the role financial services can play in the growth agenda and the dramatic changes occurring across the SME finance market.

References 1. British Business Bank. Markets Spotlight, November 2024: Small Business Finance Markets Report 2023-24.

2024.

2. Gov.uk. Business population estimates for the UK and regions 2024: statistical release. Department for Business & Trade. 2024.

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Report reveals recommendations to help SMEs boost workplace equity

Ways small businesses can maximise the festive spending boom in 2024

The UK’s 5.5 million SMEs are the beating heart of the economy, but they need help to create more equitable workplaces.

WRITTEN BY Sarah Howard MBE, Chair, British Chambers of Commerce

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reating a level playing field for everyone in a workplace makes good business sense. It helps companies recruit — and retain — employees who are skilled, engaged and productive. Yet, research by the British Chambers of Commerce (BCC) shows that less than half of SMEs have introduced specific policies or programmes for underrepresented groups in the workplace.

How SMEs can become more equitable SMEs want to do the right thing, supporting everyone who wants to achieve their potential. However, as they face economic headwinds, they need support and advice to move forward. Last year, the BCC convened a commission to examine how workplaces can become more equitable, focusing particularly on SMEs. Research* carried out for the Commission by the polling agency Find Out Now in March revealed that a quarter of surveyed employees (25%) believed that not everyone in their workplace has the same opportunities. Over a quarter (28%) of respondents also said they believed they unfairly missed out on a workplace opportunity in the past two years. The report, released in September, was published in partnership with Youth Futures Foundation. It contains over 40 recommendations.

Creating a level playing field for everyone in a workplace makes good business sense.

Inclusivity’s impact on UK society and economy The overarching aims are clear. Government and business must work together to remove barriers to work and career progression; create flexible and supportive workplaces; establish better training for employers to boost confidence and cultural change; and create a legislative framework that sets out clear expectations.

What SMEs do matters to the wider economy and society.

Research by Youth Futures Foundation suggests that tackling youth unemployment could add £69 billion to the UK’s GDP over the long term. The Centre for Ageing Better calculates that closing the employment gap for older workers could generate £9 billion annually for the UK economy. Scope says that halving the disability employment gap would bring economic returns of £17 billion to the UK annually. With businesses and policymakers working together, we can make real progress for a truly equitable and inclusive UK economy.

Source * Boosting opportunity and realising potential report of the Workplace Equity Commission, 2024.

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The nation’s 5.5 million small businesses1 have faced tough challenges, including the cost-of-living crisis, inflation and post-pandemic recovery, negatively impacting entrepreneurs, their confidence and communities.

WRITTEN BY Michelle Ovens CBE Director, Small Business Saturday UK

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ith signs the economy is turning a corner, there is a huge opportunity for small firms to drive renewed economic growth for the UK as we head into 2025. To unleash this, small businesses need continued support from across society, particularly over the festive season, which is a crucial period for many business owners.

Small businesses’ time for growth Indeed, new research2 from our Small Business Saturday campaign identified signs that the festive season could deliver a critical boost for UK small businesses, as approximately £20 billion is set to be spent by UK households, with at least a quarter of people planning to spend more than last year.3 Encouragingly, a lot of this could be up for grabs for small firms, with households expecting to spend a fifth (22%) of their festive spending pot with small businesses on average. This amounts to approximately £4.4 billion that entrepreneurs could tap into.2 This underlines the tremendous impact that this time of year can have on the fortunes of small businesses across the UK, plus the difference that public support can make.

Public support for small businesses The Small Business Saturday campaign, taking place on 7 December, is vital for encouraging support of small businesses across communities on the day and beyond. It aims to galvanise people to celebrate the incredible value that small businesses create across society.

Small Business Saturday came to the UK in 2013 and is backed by principal supporter American Express, which founded the campaign in the US in 2010. In the UK, the campaign has seen a growth in public support for small businesses with billions of pounds spent with small firms on Small Business Saturday.

Financial opportunity and renewed confidence The public must come out in force again to throw their backing behind their favourite independents. Hopefully, small businesses can convert the huge opportunity before them this festive season, so they can start the new year in a stronger financial position and with renewed confidence.

As we head into 2025, small businesses need this optimism to seize all the other opportunities available to help them recover and grow — whether that is embracing new technology like AI, exploring the financial benefits of sustainability or being open to new markets and ideas.

References 1. Office for National Statistics. Business population estimates for the UK and regions.

2023.

2. Office for National Statistics. Families and households in the UK: 2023. 2024.

3. Small Business Saturday UK, 2024.

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Advertorial Optimism for small businesses looking to grow Revolut Business: from Black Friday data giving SMEs the key to operational efficiency

An ecosystem of ecommerce tools drove sales over Black Friday and Cyber Monday, fuelling growth for small businesses. Learn how entrepreneurs are embracing AI to save time and boost success into 2025.

O WRITTEN BY Samina Hussain-Letch UK Executive Director for Square

ver the Black Friday and Cyber Monday weekend, Square’s internal survey found that sellers using Block’s ecosystem of commerce tools broke records with a 34% increase on transactions in the UK compared to last year — demonstrating consumer appetite for spending is on the rise.

According to the internal survey, the most popular shopping day was Sunday (1st December). Restaurant transactions over the weekend rose 27% for Square sellers, compared to last year. This is encouraging for small businesses in particular that are gearing up for what is likely to be a very busy festive season while preparing for the new year.

Learn how small and medium-sized enterprises (SMEs) can streamline business finances through a single platform. Earn daily interest, accept payments with ease, and manage everything in one place to simplify growth and operations.

F WRITTEN BY James Gibson General Manager, Revolut Business

Business growth despite challenging landscape We know it’s been a challenging year for businesses in the UK. The environment has been tough in the market, and this week, it was reported in the news that we are seeing the slowest new business rate in the UK since 2010. This is likely because

While it is a tough climate, we are continuing to see a lot of growth from our own portfolio of sellers.

Navigating online and in-person payments With a Revolut Business account, SMEs can sidestep the cost and complexities of accepting a range of customer payments. Offering customers choice in how they checkout and pay — both online and in person — reduces friction and abandoned carts and keeps them coming back. Plus, adding Revolut Pay as a payment option on your website allows 50 million global Revolut customers to checkout in just one click.

Embracing ecommerce and AI into 2025 We recently published our Moving Forward research report* with Clearpay and Small Business Britain on the state of female entrepreneurship. We found that 65% of female entrepreneurs are expecting their business to grow in 2025 and an impressive 55% of the women we asked say they’re using AI to help save time with tasks like marketing and web design, with many more planning to in the coming months and year.

Find the Black Friday data here:

To find out more scan the QR code

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One place to manage your business finances Our recent survey of business leaders also found nearly two out of three businesses1 across Europe think legacy banks are too slow to meet their evolving needs. Revolut Business offers SMEs the tools and support they need to manage and grow their operations effectively, all within one app. You’ll find your small business equipped with essential features to streamline payments, grow savings, help customers checkout at speed and thrive in today’s competitive marketplace — going beyond business as usual.

Fees and T&Cs apply. Feature availability subject to plan selection.

Reference 1. Revolut Business. Two-thirds of businesses believe ‘legacy banks’ are too slow to adapt to modern business needs. 2024.

*Source: Small Business Britain. Female Entrepreneurship: Moving Forward. 2024.

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How to make your money grow You can earn interest on idle cash with savings accounts, paid daily to your Revolut Business account. These are simple to set up, and you can add or withdraw money anytime. This kind of access to growing cash means you can build a financial buffer for what’s next — from tax payments to unexpected expenses or re-investing in your business.

From managing payments to saving and investing, Revolut Business offers a range of tools.

the recent budget announcement was unfriendly for small businesses, amongst other external factors. While it is a tough climate, we are continuing to see a lot of growth from our own portfolio of sellers and hearing again and again about an appetite for growth.

Tech empowers sustainable sales management One of our sellers, Perky Blenders, which was featured in our report, told us that integrating our technology is now saving her business up to one day a week in administration time. This time has allowed her to focus on growing other areas of her business, such as their core value of responsibility to the planet by operating in an increasingly eco-friendly and sustainable way. This is a great example of how we are encouraging female entrepreneurs and businesses more broadly to utilise technology to get time back, allowing them to focus on growth.

or SMEs, it can be challenging to manage financial tasks while growing a business. According to a recent survey of business leaders across Europe, almost half (49%)1 have faced operational issues due to delays with their traditional financial institutions.

Revolut Business is designed to simplify company finances — all in one intuitive platform. From payment management to savings accounts, Revolut Business offers a range of tools that help SMEs work efficiently and stay focused on what matters most.

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Signposting essential tax support and digital services for UK businesses

Find free tools, guidance and digital services to help UK businesses thrive. From tax support to spam protection, SMEs can find assistance at every stage of their journey.

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mall businesses are the backbone of the UK economy, and HM Revenue and Customs (HMRC) is committed to helping you meet your responsibilities to pay the right tax at the right time.

But whether you are starting out or established, our support is much broader than that.

Supporting businesses Did you know that HMRC offers a range of free, accessible information and guidance throughout the life of your business?

Registering for an online account lets you use our services securely at a time that suits you. Our user-friendly HMRC app helps you stay on top of your personal tax matters. Around 1.7 million customers use it every month.

SMEs need immediate support when they venture into international markets. ~Tina McKenzie Policy Chair, Federation of Small Businesses (FSB)

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Free guidance HMRC’s GOV.UK guidance receives more than 750 million views a year.

From understanding self-employment and Self Assessment to learning more about VAT, we’ve got it covered. We keep it relevant and are creating clearer interactive information, including our: • Step-by-step guide if you plan to set up as a sole trader, work for yourself and run your own business as an individual.

• Interactive guidance to check what taxes may apply to your business as a sole trader, rules to follow and registrations you may need to complete.

• Tool to check what registering for VAT may mean for your business.

Improved services Our online services, including Making Tax Digital for VAT, are already helping customers, and our digital assistant offers support with topics including Self Assessment.

If you’re an employer, we have improved PAYE online to help your payroll, and we can support your National Minimum Wage obligations.

If your business faces financial hardship, we can ease the pressure with a Time to Pay arrangement.

We help importers and exporters access the Customs Declaration Service which handles all import declarations, with more than 70 million submitted in 2023/24.

Protecting businesses If your business faces financial hardship, we can ease the pressure with a Time to Pay arrangement.

Our security experts protect your data and ours, blocking cyber-attacks and shutting down rip-off scams. We also investigate those who bend and break the rules.

We want to support you every step of the way to help businesses like yours thrive and grow.

For more information, search ‘HMRC’ on GOV.UK.

WRITTEN BY Marc Gill HMRC Director Individuals and Small Business Compliance

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How accountants are driving SME growth and resilience Accountants are expanding their strategic impact, combining deep financial expertise with forward-thinking partnerships to build sustainable, successful businesses.

T INTERVIEW WITH Helen Brand Chief Executive of ACCA

INTERVIEW WITH Aleksandra ZaroninaKirillova Head of SME Professional Insights at ACCA

INTERVIEW WITH Glenn Collins Head of Technical & Strategic Engagement, ACCA UK WRITTEN BY Tony Greenway

To find out more about how ACCA supports SMEs, scan the QR code

he rapidly evolving business landscape is putting the resilience of small and medium-sized enterprises (SMEs) to the test like never before. For example, many SMEs understand the importance of operating sustainably, as the resulting efficiencies can be beneficial for their business, more appealing to customers and certainly better for the planet.

Nevertheless, meeting sustainability goals presents them with various pressing challenges — as does navigating a complex regulatory environment and embracing digitalisation, among other issues.

Accountants as strategic SME partners Fortunately, SMEs don’t have to face these challenges alone because the role of professional accountants has evolved and expanded to meet the transforming needs of the small business sector.

Accountants are now acting as strategic partners and trusted advisors who help SMEs build resilience at every turn. By immersing themselves in every aspect of a business, they’re uniquely qualified to provide valuable strategic insight and guidance while driving positive change that delivers lasting success.

For example, PJCO Chartered Certified Accountants provide support to SMEs and entrepreneurs, helping clients navigate everything from rising interest rates to technological change through their work with landlords and buy-to-let properties. Elevate Accountancy specialises in franchising and the care sector, combining digital solutions with industry knowledge to deliver strategic advice through regular client interaction and feedback. Meanwhile, Profit Impact works with businesses on sustainability transformation, helping clients turn environmental goals into tangible results while maintaining financial performance.

The expanding role of accountants For its part, ACCA ­­­­— the global body for the accountancy profession — is making sure professional accountants are equipped with all the skills and knowledge necessary to support SMEs in this highly charged and constantly changing business world. It’s crucial that it does, insists Helen Brand, Chief Executive.

“SMEs are the backbone of the global economy, and supporting their resilience and growth is central to our mission,” she says. “Our members in small and medium practices understand the entrepreneurial journey intimately — they are small business owners themselves. This shared experience creates a powerful foundation for meaningful support and guidance. Through our global network, we’re committed to empowering accountancy professionals to be not just advisors

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but true partners in building sustainable, successful businesses.”

Accountants are contributing to building a more sustainable world Accountants who work in small and mediumsized practices (SMPs) are indispensable for an SME’s sustainability agenda. By first integrating sustainable practices into their operational frameworks, SMPs gain first-hand experience and insights into the challenges and benefits of sustainable transformation. This approach means they guide clients towards environmentally and socially responsible practices and enable them to effectively communicate and report on their achievements.

They can also boost financial resilience by easing access to diverse funding sources, managing cash flow optimisation and building investor relationships.

Plus, by leading technology adoption initiatives and creating tailored digital strategies, they can play a central role in its digital transformation, too. They make strong advocates, ensuring that SMEs’ voices are heard at policy level.

Helping SMEs unlock their true potential “Our community of practitioners acts as an essential support network, which is particularly vital given that SMEs contribute over £2 trillion to the UK economy,” says Glenn Collins, Head of Technical and Strategic Engagement, ACCA UK. “In fact, according to figures from Intuit, SMEs that use accounting services have seen an 11.5% annual increase in their revenue, compared to those that don’t. Using an accountant can also save them up to nine hours every week on financial management.”

“Our research shows that accountants are uniquely positioned to help SMEs navigate today’s complex challenges, from digital transformation to sustainability requirements,” says Aleksandra Zaronina-Kirillova, Head of SME Professional Insights, ACCA. “That’s why we’re continuously developing practical tools, insights and guidance to help our members stay ahead of emerging trends and deliver real value to their SME clients. When we equip accountants with the right resources, they can truly unlock small business potential.”

To learn more about ACCA scan the QR code

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Strategies for UK SMEs to overcome supply chain vulnerabilities The dynamic landscape for UK SMEs has been influenced by a confluence of factors, including the integration of new technologies and the growing importance of the circular economy concept.

T WRITTEN BY Professor David Pickernell VP (Research and Community), ISBE (School of Management, Swansea University)

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he UK SME landscape is shaped by technological advancements, a push for circular economy practices and challenges from Brexit, energy costs and global uncertainties. While SMEs face immediate pressures, there’s also a need for long-term strategies addressing supply chains, skills development, innovation, financing, infrastructure and sustainability to thrive amid these complexities.

Resilient supply chains In terms of supply chains, there is a broad consensus that the lack of local suppliers is a major issue for many SMEs. There is a need to facilitate development in this area to enhance resilience, amplify economic benefits and support the sustainability agenda. This agenda is often driven by the wider, international supply chain, making UK SMEs reliant on and vulnerable to the sustainability practices of foreign organisations, which may have different priorities and approaches to sustainability and circularity.

The Government should therefore develop a searchable supplier database to facilitate a matchmaking service. This should enable businesses to identify suitable suppliers, assess ongoing needs for supplier development and training, as well as pinpoint areas that may require funding or financing.

Value-based procurement Value-based procurement (VBP), which focuses on the overall value delivered by a product or service rather than just the lowest price, creates significant opportunities for SMEs in the UK. This approach is especially beneficial when linked to agendas like increasing supply chain resilience and boosting local economic multipliers. However, there remain key challenges for SMEs and a consequent need to simplify procurement (particularly in the public sector) processes.

Providing the skills and training necessary to allow public procurers to maximise the potential benefits of VBP is also a challenge. The new Government’s focus on growth, including investment in the public sector, offers opportunities for SMEs to take advantage of a VBP approach. Yet, the obviously tight fiscal outlook in many government departments risks defaulting to a lowest-price procurement approach, which could be detrimental to many SMEs.

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