Small business confidence is on the rise as non-essential outlets have opened their doors to customers and lockdown slowly eases.
The Quarterly Federation of Small Businesses (FSB) Small Business Index, published in April, has posted its highest reading since autumn 2014.
It reveals that most firms questioned are forecasting rises in revenues and have aspirations of growth.
Close to two thirds of small businesses expect their performance to improve this quarter, and fewer than one in three expect theirs will worsen, according to the latest FSB study of almost 1,700 business owners.
However, the Blackpool-headquartered FSB, the country’s largest business group, is calling for cuts to hiring costs amid redundancy fears, renewed efforts to tackle late payments and innovative approaches to debt.
It says that lockdown has caused the £23bn late payment crisis to deepen. Cashflow is critical for businesses as they begin to open their doors – and that makes managing invoices and payments crucial.
Chasing debt early and putting the right procedures in place to recover bad debts is vitally important as part of managing cashflow.
It’s also important to keep on top of your cashflow forecasts. Look at your payment terms and see if they need to be changed to meet the new climate.
Do you need to ask for more payment up front? Have honest conversations with suppliers and customers.
Another emerging issue is the winding down of the job retention scheme over the coming months. The FSB survey has revealed one in seven small firms with staff say they are likely to make some or all their team redundant this quarter.
The FSB says initiatives like ‘Kickstart’ as well as incentives to take on apprentices and trainees need to be delivered efficiently over the coming months to protect against a job market shock and support the young people that have disproportionately borne the brunt of rising unemployment.
It adds that bringing down the non-wage costs of employment, starting with employer national insurance contributions, which essentially serve as a jobs tax, would also help.
Looking at emergency loan repayments, it believes an approach to repayment based on the student loan model and greater adoption of employee ownership trusts could both mark “constructive ways forward”.
FSB national chairman Mike Cherry says: “As the economy shifts, support measures need to evolve – particularly where support for start-ups is concerned.
“The Help to Grow initiative should be urgently reformed in order to both widen its support remit and make it open to all small business owners as they start out, not just those that already have staff.”