OPINIONATED

OPINIONATED MARTIN MCTAGUE

CONFRONTING COVID-19

Time to pull together

Th e last few months have challenged the small business community as never before. But coming together with a collective voice will help many come out the other side

T’S AT TIMES LIKE THESE WE NEED EACH OTHER.

II struggle to fi nd the words to sum up how this year has been for small business owners and self-employed. Diffi cult? Challenging? Uncertain? Talk about understatements. For many, it has been frightening, devastating, and unbelievably stressful.

But in among all of that, I have also had feelings of pride and optimism in our small business community. Th ere are those who have shown incredible resilience in the face of adversity, those who have found ways of innovating and adapting their businesses, those who have supported their local community.

And in many cases we have supported each other more than ever before, through online events, Facebook groups and experience-sharing. At FSB, thousands have stood together to make the voice of small business and the self-employed heard. Th at has never been more crucial than in the past few months.

It proved eff ective. Our collective eff orts – from volunteers, to those helping our research work, to members joining our local and national support activities – have achieved help and hope for each other in these extraordinary times.

Many of the support schemes the Government rolled out were a result of our collective eff ort. Th ese have helped many, but by no means everyone. Th e newly self-employed and directors of limited companies were left out of the main schemes, despite many of them being in fi nancial peril. Th ere were others who slipped through the cracks, too.

For those who did benefi t, it was a lifeline. But the reality is that this help is gradually drawing to a close. Grants, furloughing and self-employed support are winding-up; Government-backed loans will need to be repaid; VAT postponements are coming to an end. For some sectors, such as retail and hospitality, the run-up to Christmas will be crucial. A nervousness in consumer spending would be devastating.

Whatever happens in the coming months, small business owners face a second wave of worry and potential hardship. Th e Government, devolved administrations and local authorities need to be mindful of this, and respond to circumstances as they unfold.

Economic recovery is going to be a long, hard slog. It will only be achieved by making sure as many hard-working, innovative small business entrepreneurs get through this as strongly as possible. Policies must be focused not just ‘For many, on business survival, but on 2020 has been growth – even in these bleak days. frightening, Th ere must be a focus not just on preserving jobs but on job creation; devastating, and on supporting small fi rms to adapt unbelievably and build their digital skills; on stressful’ recognising in the tax system the contribution small businesses and the self-employed make and the risks they take to achieve that.

But we also have a part to play. We must continue to support each other. We must continue to have a collective voice. Between us, we make up 99 per cent of businesses in the UK. We account for 60 per cent of private sector employment. By sticking together, we benefi t not only each other, but the communities we serve and the economy as a whole. Th ere are tough times ahead, but together we can get through this.

MARTIN MCTAGUE is National Vice Chair, Policy & Advocacy, FSB. All information is accurate as of 17 September.

OPINIONATED TORSTEN BELL

COVID-19 RECOVERY

Targeted response

Th e fallout from the Covid-19 pandemic has hit diff erent fi rms and sectors in diff erent ways. Th e economic recovery package should refl ect this

HE COVID CRISIS BEARS LITTLE RESEMBLANCE

Tto the fi nancial crisis of 2007-08 in terms of its roots (a health emergency, rather than an economic one), scale (the biggest contraction for 300 years) and rapidity (already 750,000 fewer people are in paid employment). Understanding the unique nature of this crisis is key, especially for Government. One feature stands out – it aff ects diff erent sectors in diff erent ways.

Swapping an offi ce for Zoom meetings is one thing; being ordered to close completely is quite another. Gaps between sectors stand out when we look at where workers have been furloughed. Some 77 per cent of hospitality workers were furloughed at some point – 10 times the rate in fi nance. Take-up among micro fi rms has been 54 per cent, compared to 21 per cent among larger ones. Th e pace of return also varies. Construction saw almost half its furloughed workers return by the end of June, but there has been much less progress in getting furloughed workers in entertainment and leisure back to work.

Th e danger is that we ignore these diff erences in economic policymaking. Th at’s clear in the Job Retention Scheme, which has the same rules for all fi rms, and support for the self-employed, where the one-size-fi ts-all approach means some big winners. Take, for example, the self-employed person who has had two big grants from Government despite having almost no hit to their work from the crisis. Lucky for them, but not the best use of Government money.

We have seen some sector-specifi c help, such as the £1.7 billion bailout for the arts and the ‘Eat Out to Help Out’ scheme. But if we want to avoid a big rise in unemployment we need to recognise that while some sectors are already able to return to (almost) normal, others will be constrained for many months to come.

Th e main support for fi rms is due to end later this year or early next, with the Retention Scheme phased out in October and loan repayments starting in early 2021, along with deferred tax bills. Th is is a big gamble for fi rms in the worst aff ected sectors, and a rise in unemployment could be the result. Weaker fi rms fail in any recession – but this crisis is unique, refl ecting a temporary phase rather than a new normal. Many fi rms that are struggling now could prosper again in future. It’s time policy adjusted. Th e Chancellor should phase out the ‘Swapping an offi ce for Zoom Retention Scheme more slowly for meetings is one hard-hit sectors, and change it from a scheme that subsidises people not working to one that helps meet thing; being ordered to close employment costs in sectors where the completely is crisis is temporarily increasing costs. Th is would limit unemployment and quite another’ help keep more fi rms afl oat. To ensure fi rms can drive recovery without being overburdened with debt, we should convert the emergency loan schemes into studentloan-style, income-contingent loans, with repayments capped at fi ve per cent of a fi rm’s annual revenue.

Th e UK economy is on the road to recovery, but we are a long way off business as usual. It’s time policymakers recognise that this has been a unique crisis in terms of its depth, sectoral focus and temporary nature. After all, that is what fi rms and workers are living with every day it goes on.

TORSTEN BELL is chief executive of the Resolution Foundation. Views expressed are those of the author and not necessarily those of FSB.

OPINIONATED PARVEEN BEGUM

NEW BUSINESS

Make the leap

Starting up a new business requires people to step out of their comfort zones. But with hard work and a desire to network, anything is possible

S THE CEO OF A TECH START-UP MAKING

Asolar-powered carports to charge electric vehicles (EVs), it is strange that my early professional skills were learned as a manager at Burberry. It was a comfortable job but I was eager for a new challenge, and about this time I was approached about working at EV company Tesla. Th ey were looking to hire people outside the automotive or engineering industries who could fi nd new solutions to problems.

I started out working as an EV specialist, after which I moved into marketing and sales. Th e majority of my time was spent showcasing Tesla’s latest innovations, with the aim of making people realise that EV was a game-changer for the automotive and travel industries – and for the environment.

My ‘eureka moment’ came when I realised that the world was obsessed with EVs but not their infrastructure. As the number of EVs continues to grow, parking facilities are failing to adapt, and there are not enough public charging carports.

Around this time I met Mark Maurice, a mechanical engineer, environmentalist and my future busines partner. After discussing the state of EVs in the UK, we realised there was an opportunity to provide a solution to vehicle charging that would have less impact on the environment, because they could be powered by the sun. After two years at Tesla I left to co-found Solisco, with Mark covering engineering and myself new business and administration.

My advice to anyone looking to start a business is: fi nd a partner to share the workload. Th is enables you to do twice as much work. It isn’t easy getting a business off the ground. You need to do marketing research, networking, research and development and sales pitches, as well as meeting with potential lenders or investors. Th is can be overwhelming, especially if you are new to business.

With Mark developing our products, I spent a lot of time researching the EV market, its pioneers and its key players. I also started attending conferences and connecting with people via LinkedIn to generate interest and meet potential clients and suppliers.

We took every opportunity to visit our contacts in person, because we discovered that face-to-face meetings ‘My advice generate stronger, more meaningful to anyone relationships. Networking is essential; if you are nervous about doing so, events such as those arranged by FSB are a great looking to start a business is: way to break the ice. Some women fi nd a partner perceive networking to be a maledominated aff air but that has certainly not been my experience. to share the workload’

So far, we have had a great start, but it has not been all plain sailing. Th e EV market and its regulation is still in its infancy. I see this as blessing in disguise. It has given us time to develop our early personal relationships with partners and stakeholders, which were forged at trade shows and conferences.

My advice to anyone looking to start or grow a business is: do your market research, network as much as possible and take a chance on yourself. Finally, try and have fun. As philosopher Allan Watts said: “Th is is the real secret of life — to be completely engaged with what you are doing in the here and now. And instead of calling it work, realise it is play.”

PARVEEN BEGUM is CEO of Solisco. Views expressed are those of the author and not necessarily those of FSB.