The owners of small retail and manufacturing businesses are blaming the Government for the effects of the credit crunch. According to new research 88% of business owners say the economic downturn is hitting their levels of business, with 72% forced to reduce their margins as a result.
The survey was carried out by one of the Forum of Private Business’s (FPB’s) partners, UK200 Group, which represents lawyers and chartered accountants.
Respondents were invited to select the factors they consider to be responsible for the downturn. Although 85% blame the banks to some extent, and 73% the ‘world economy’, 90% say it is the fault of the Government.
Delayed or late payment is one of the biggest threats to small firms, particularly as obtaining credit has become much more difficult. In the survey, which was carried out in July 2008, 71% of respondents claim that customers are taking longer to pay them. Although only 45% are experiencing greater difficulty in obtaining credit, a huge 98% expect the credit crunch to adversely affect their business in the future.
The latest figures from Experian show that late payment is on the increase with businesses waiting an average of 4 weeks beyond the agreed terms for payment.
"The Prime Minister keeps saying he is listening to the concerns of voters, but the results of our research show that small businesses believe he is bypassing their concerns when they most need his support," said Nick Palin, the FPB’s Director of Finance and Administration. "The Government should be working more closely with small businesses in order to help them to navigate the stormy water ahead and the longer-term issues that will come in the aftermath of the credit crunch."
David Ingall, President of the UK200 Group, said, "This survey provides concrete evidence that the credit crunch is really hitting UK SMEs – the backbone of our economy – and hitting them hard.
"While we can take some limited encouragement from the fact that the majority of businesses are still able to access credit, the smaller firms in our survey are not optimistic about the prospects for economic improvement. It is also interesting to note that they are very clear about who they hold responsible for the current difficulties, although the media must also take some responsibility for constantly headlining bad news.
He added: "The Government needs to be listening – and talking – to smaller firms as part of its overall plan of action for turning the economy around, otherwise it may be too late for many businesses to benefit from a future recovery."
The FPB can help small businesses with its informative guide, Costs, Controls and Profit, the Complete Business Checklist, which helps employers with every step of running a business. For more information about how the FPB helps its members, call the member helpline on 0845 130 1722, or visit www.fpb.org.
Read related items on:
Forum of Private Business