Britain’s smallest firms must remain optimistic and head for growth

Emma jones, Founder small business support network Enterprise Nation.

I’m delighted to be in a position to say that Britain’s expanding entrepreneurial community are a refreshingly optimistic bunch.

According to the latest Global Entrepreneurial Monitor (GEM), which was conducted post-referendum vote in 2018, one in five working age individuals are engaged in some type of entrepreneurial activity or expected to be in the next three years. It also found people aged 25 to 34 were significantly more likely to be involved in early stage activity than those aged between 45 to 54.

Our own most recent research, released earlier this year, has uncovered a buoyant and upbeat community, with 72 per cent saying they expect to grow their business in the next six months. They also remain committed to EU trade, 40 per cent said they will continue as usual to use EU suppliers, with just three per cent claiming political worries has forced them to change their sourcing and export plans.

In fact, exporting is healthy, with a third (29 per cent) saying they were exporting to the EU and beyond, with a slightly higher 39 per cent expecting to export over the next six months.

That’s a very different picture to that that emerges from larger, more established companies, with two separate, well documented polls saying confidence here is down significantly.

So what’s different?

The community we represent at Enterprise Nation comprise the UK’s smallest, early stage firms. They are mostly home-based and self-funded. They employ 0-5 people, and use contractors and freelancers. They have embarked on their entrepreneurial journey despite Brexit – and despite everything they are undeterred. This chimes with the fact that there are now 4.9m self-employed individuals in the UK and according to research from Fiverr out last month, a whopping 67 per cent of us want to give up the day job and go it alone.

But in today’s modern business community, giving up the day job is not at all mandatory. Far from it, 24 per cent of the businesses we surveyed said they were in employment and working on a side hustle at the same time. This is not a mere flash in the pan or a means to pocket extra cash. Only six per cent said they were side-hustling to top up salaries. The reality is, 40 per cent said they expected to give up the day job in 12 months to work on the business full-time, and another 34 per cent said the ultimate aim was to be their own boss.

Working for yourself can be lonely

We’ve observed this shift developing for many years. It comes as no surprise. And those early stages are electrically-charged and exciting. However, working for yourself does have its challenges. Our survey showed loneliness was a big issue with 50 per cent saying they felt lonely some of the time with another 29 per cent saying they felt lonely often.

With 77 per cent being home-based and self-financing their enterprise, it’s unsurprising it doesn’t come with some mental challenges. The interesting statistic for me was that working on a side hustle was less of a lonely business, so mixing it up can have its upsides.

Stress comes in peaks and troughs. And while almost half (49 per cent) of those working full-time on their business say they feel stressed often, this actually falls again when it comes to those running a side hustle to 32 per cent, this could be down to the financial security that having steady income can bring.

When it comes to feeling supported, 82 per cent said they felt the Government wasn’t supportive enough. That wasn’t so much about expecting services or advice to be delivered on a plate, most admitted they hadn’t even looked at to find out what was available. What they were looking for was for their efforts and sacrifices to be reflected in lower taxes, grants and funding that would give them a financial break.

And that’s an easy thing to understand. These are not people who have set up a business because they want to somehow avoid tax, they’re taking a risk and want to do it because they have found a gap in the market for their product, want the flexibility of working for themselves or just want to do the kind of work they enjoy.

Mighty tech platforms like Amazon, Etsy and Instagram mean people can export their product around the world from their kitchen table, without having to employ anyone.

Taking advice

Advice is another important element of success for small firms. All evidence points to the fact that firms that take advice in order to get to the next level are more successful than those that don’t. We’ve just unveiled our own adviser marketplace which will make it so much easier for people to find relevant, bite-sized advice when and where they need it.

A survey of our own advisers this month has shown that there has been an upturn in advice requests from small firms – and it hasn’t been about Brexit, quite the contrary. The main focus has been growth and how to make more profit.

Even if the plan is to stay small, firms need that extra bit of help to ensure things are sustainable and avoid making costly and unnecessary mistakes.

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