An emotive title for a blog – but it is an actual question that I have been asked by a frustrated microbusiness owner and he is not the only one who feels like that.

Another quote: “It feels like the whole system is against you when you start a small business – when it ought to be on your side”

It is clear to me that much of what Central and Welsh Government do works against the small business owner and I have no idea whether this is intentional or the result of a failure to understand or even consider the small business. Perhaps I can give some examples:

  • Lots of things (Government contracts, Welsh Government support during Covid etc) require a business to be VAT registered. Businesses don’t need to be VAT registered until turnover exceeds £85k and that is not a small business. It seems that Government is deliberately or accidentally excluding small businesses
  • HMRC and tax returns: the proposals to move from annual returns to monthly or quarterly means not only is the small business owner, already working long hours, now obliged to do more paperwork, it is also likely that an accountant will be needed or at least if there is an accountant in place, will be needed for more hours. This is a cost that the business owner starting out can ill afford.
  • The benefits system – works against new business owners who have previously been on Universal Credit from starting out by preventing them from building their businesses because business earnings, which may be needed for the next month’s business costs, are used to deduct benefits received and after 12 months an assumption on the business owner’s earnings is made, whether or not it reflects the reality, and benefits are cut again or removed completely. At this point, the business owner is frequently forced to give up because it simply isn’t possible to live on just what a 12 month old business delivers.
  • Export help – not available if you are just starting out as an exporter (when you really need some advice) but only when you are exporting pretty significant numbers of packages per year
  • Help with business premises – in Wales there is a 3 year waiting list for manufacturing type premises and yet it is still promoted as available help for businesses
  • Finance – really difficult to raise if you are small, almost impossible if you are a start up and have any sort of small blemish on your credit record (unless you talk to Purple Shoots of course)
  • I could go on…

There seems to be a lot of big business thinking applied to small organizations with no real understanding of what it is like to start something with nothing and try to build it up.

And yet – 99.4% of all businesses in Wales are SMEs, and of that figure, 95% are microbusinesses. They provide 35% of all employment in Wales and figures show that they have contributed more than half of the total employment growth in Wales in the last 10 years. Figures are very similar for England. There is evidence that microbusinesses are capable of growth even in an economic downturn – indeed many of our borrowers proved their agility and resourcefulness to get through the lockdowns, especially since big numbers of them got no help from any Government scheme.

So why are they always overlooked?

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