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What would help businesses grow?

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Friday February 17, 2012 at 9:00am
Being in business is about facing challenges. You may have devised a growth strategy and know where you hope to be in, say, three years' time. But even the best strategy has two shadows looming over it: a struggling economy and the government.

Broadly speaking, you can do little about the state of the economy. At best, you should remain positive and continue looking for opportunities. The shadow the government casts is a different matter. Government policies or inaction can hold you back. What you want are practical solutions from politicians to help your business grow.

The latest research into the relationship between government and business confirms this. According to a recent survey, around 90% of businesses think the government should make a greater effort to promote business growth. This follows an earlier study last year in which 600 businesses said the government is not giving suitable support for economic expansion.

Neither pronouncement from the reports is likely to surprise you. However, the report goes on to cite two additional comments from businesses about achieving growth.

30% of the 150 businesses questioned want to see their admin work cut back. They say excessive administration inhibits growth. They believe the government should look at ways to reduce the regulations and administrative burdens it places on companies.

The government's attempts in this area have so far met with concern. The British Chamber of Commerce (BCC) has criticised the government's new regulation framework for businesses. The BCC says it lacks transparency and is inconsistent.

Tax breaks

The other issue is tax breaks. 27% of businesses featured in the report say tax breaks act as an incentive for growth. In other words, the right tax environment encourages entrepreneurs.

The government maintains it's considering this point. To date, many businesses are unhappy with progress.

Most businesses have reviewed their costs and cut back as much as they can. In order to grow, they need more leeway. Less admin and a more favourable tax regime would free up time and money, and provide this.

Let's hope the government pays attention to these comments. Many business owners are reasonably confident about the prospects of growth for their companies. But they need government understanding and help.


Andy Parker
Chartered Accountant and Chartered Financial Planner

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