Guest post by Emma Jones, Founder of www.enterprisenation.com
The highlights from this year’s Budget for small business included:
– Corporation tax to be cut by 1% to 20% in 2015
– The first Â£2,000 to be taken off all employers’ National Insurance
– 450,000 small firms to not pay any employers’ National Insurance
– Easing the way for small businesses to sell to government with a projected fivefold increase in orders and The Small Business Research Initiative scheme to be extended to help businesses with the procurement process.
– Growth vouchers for small businesses worth Â£30 million which will help start-ups and small businesses with attracting finance and recruiting people.
– The creation of a new Business Bank which will have Â£1bn of funding at its disposal.
– Two year extension to SEIS so investors can continue to claim capital gains tax relief on their investments.
– Tax relief for investment in social enterprises.
– The VAT registration threshold will be increased to Â£79,000 from April 2013.
These are measures that have been studied over and critiqued over recent weeks and you can see what Enterprise Nation thinks of the measures announced.
But let’s look at a couple of the aspects the Chancellor was looking to emphasise: getting funds to small business; and helping them grow through government contracts and growth vouchers.
The Chancellor is keen to see more money move from banks to the small businesses that need it. To that end, the announcement of a Business Bank and funds committed to the Funding for Lending scheme which allows banks to borrow at cheap rates, to lend on to business.
And yet what we are seeing at Enterprise Nation is a strident move towards crowdfunding as opposed to bank funding. Earlier this year we published an eBook on ‘50 ways to find funding for your business‘Â with a survey showing crowdfunding as the most popular form of fund-raising amongst small businesses. This is why we’ve launched a crowdfunding featureÂ so small businesses can access the crowd to raise funds and raise profile. We’ve partnered with Crowdfunder to enable this but there are other sites including CrowdcubeÂ , SeedrsÂ and IndiegogoÂ which offer reward, loan and equity-based crowdfunding, depending on the amount of investment you’re after and on which basis you’d like to borrow.
Contracts and growth vouchers
If you’re looking to raise investment through making sales, the Chancellor would like you to consider the government as a potential customer. A target was announced of a projected fivefold increase in orders from government to small business suppliers.
To make a start, visit the Contracts Finder websiteÂ to view the notices of contracts available.
An alternative route is to become a supplier to large businesses that supply government so the big business goes through the process of being an approved government supplier, meaning you don’t have to. Companies such as HP encourage this practice with programmes like SMEngage.
An investment of Â£30 million in a growth vouchers scheme was also announced in the Budget. Details are yet to emerge on who will administer the vouchers and how small businesses will be able to activate them, but the sentiment is to encourage business owners to seek support from finance, legal and strategy experts who will help propel turnover and profitability.
Just as the Chancellor is looking to balance the books and ensure there is more money coming into coffers than heading out, so small business owners have the same objective each day. With reductions in tax and extensions to investment relief, it’s your call as to whether you feel the Chancellor has just made your job that little bit easier!