Small firms look to new year with ‘cautious optimism’

Jan 03, 2013

 

Quarter four results for 2012 show that it is still a tough environment for small businesses and the Autumn Statement highlighted that it is going to be tougher for longer.
 
The Index has been created from the views of small firms from the FSB survey panel, made up of almost 7,000 members who regularly answer questions on different policy issues. 
 
FSB Bedfordshire, Cambridgeshire and Hertfordshire regional chairman Charles Smith (pictured) said, “Small firms want to grow and invest and they want to get on with running their business. Many of the Chancellor’s plans in the Autumn Statement will help small firms do this, especially raising the tax free investment limits.
 
“However, there is still more that can be done. Previous recessions have shown that demand for finance is at its highest during recovery. There is a broken relationship between small firms and the banks.
 
"The small business bank needs to address this especially if small firms are to bring forward investment plans. We believe this could be the stepping stone to creating a Small Business Administration, similar to that in operation in the US.”
 
The FSB’s Small Business Index has always been a good indicator of GDP so, with recent forecasts indicating that growth will continue to be slow in 2013, this slight optimism will provide good news.
 
However, weighing against that optimism are the cost pressures which still face small businesses.
 
Those sectors that rely on discretionary spending are struggling as incomes remain squeezed. Almost two thirds of respondents cite the weak domestic economy as a block to achieving their growth aspirations, showing how the optimism felt comes with a health warning.
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