SMEs and freelancers have been given government backing this month, as the rising number of self-employed continues to spark discussion in parliament.
On the flip-side, late payments have been found to seriously affect SME success rates, with 60% of small businesses experiencing tardy payments.
Record rise in starting salaries
Starting salaries are rising at a record rate as businesses attempt to entice a shrinking number of potential employees.
A recent report by KPMG found that 38.3% of employers were forced to pay more in June than in May in order to attract staff, a record high since the survey launched in 1997. Pay has now risen for 26 consecutive months.
Bernard Brown, partner and head of business services at KPMG, told The Telegraph that candidates are not easily swayed by cash and are now looking for more than just a high salary when job searching.
Low investment confidence for SMEs
British SMEs are still reluctant to invest, despite a record high in overall corporate appetites for investments.
This has been a great year for SMEs, with rising revenues generating an average turnover of £80,000, boosting business confidence for many.
However, HSBC’s recent Ambitious Business report, which surveyed 750 SMEs, found that two thirds of decision makers feel confident about the state of the economy, while 36% are still worried about the risk of making significant investments.
Small business given a voice in parliament
A startup expert will be brought into the Department for Business, Innovation and Skills (BIS) as an entrepreneur-in-residence as a push by the government to do more to provide support for small businesses.
Simon Devonshire, director of Wayra Europe, a hothouse for new digital startups, will be advising BIS on how best to help small businesses achieve better growth and export rates.
Skills and Enterprise Minister, Matthew Hancock, said:
“Small businesses, be they specific industries like life sciences or established at a kitchen table, are the foundation of our economy and create sustainable growth and much needed jobs.
SMEs owed almost £40 billion in late payments
The amount of money owed to small and medium-sized enterprises (SMEs) has risen to £39.4 billion, according to data published by direct debit company, Bacs Payment Schemes.
This figure is up £9.4 billion from last year and has surpassed the previous peak of £37 billion in 2012. 60% of SMEs are now experiencing late payments, with the average company owed £38,186.
This presents significant issues for SMEs, with 25% saying that outstanding debts of just £50,000 would be enough to send them into bankruptcy.
The government is attempting to push through legislation that will force companies to publish information about their payment terms, hoping this might shame big businesses into paying on time.
Employment minister backs young entrepreneurs
More should be done to encourage young people in the belief that going it alone is just as valuable as going to university or working for a big company, the employment minister has said.
Ester McVey recently said self-employment deserves the same level of social respect as more traditional employment routes. She also urged the Conservative Party to champion those with the “spark” to create their own business.
This is a highly positive step for the UK’s growing army of self-employed, which has now hit 4.58 million according to ONS statistics. Research commissioned by self-employment representative body, PCG, found the number of those under the age of 29 going it alone in business has increased by 24% in recent years.
As always, our financial news round-up is brought to you by the briliant Sophie Turton from Crunch Accounting.
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