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It’s holding up – but too many British Entrepreneurs will not survive too much more without changes

British entrepreneurs are proving a truly resilient bunch.  New research carried out by cloud and accounting software specialists FreeAgent showed nearly 60% of the business owners surveyed to be optimistic and unworried by the future.  

A massive 78%  of those British Entrepreneurs surveyed are unworried by the effects of Brexit.  Even COVID-19 has only 32% saying their businesses have suffered during the pandemic.  Some talk of COVID having opened new opportunities for them.

But – and there is a giant but – business owners see a clear obstacle in their way to surviving the current climate.  That obstacle is red tape and bureaucracy.  Sonali Parekh, Policy Director of the FSB (Federation of Small Businesses), says that regulations are always at the top of the list of barriers to growth but never more so than now.

Sonali explains further. It is not necessarily the regulations themselves, but the complexity of them.  Many, which they label as blue-tape regulations, are so user-unfriendly they sometimes have to be re-issued.  Meanwhile, the harassed business owner often has to resort to waiting for specialist advice to unravel and explain how they can comply.

Tara Hawkins is a British entrepreneur who runs the luxury villa company, Authentic Villa Holidays.  Tara gives the example of the furlough scheme, which ended in October, and now the new Job Support Scheme starting in November.  Being brand new schemes, both take time to learn, then have to be explained to staff and actioned. 

“Rules and regulations are just about manageable when you have a full team,” Tara says, “but the irony is that you now have to carry the huge additional burden of all these new ones, without the team, and while fighting to keep your business going.”  She doesn’t feel the government understands this.

Joanna Iwanska, the founder of Polo Market UK, based in Beckenham, says the regulations changing so quickly make them another problem that you just don’t’ have time to deal with.  Bernadette Stevenson, another British entrepreneur, and small business owner has a family restaurant called The Bramble, which has been opening and shutting throughout the pandemic.  Bernadette says that she serves in the restaurant and does the dishes.  She finds she cannot keep up with the minefield of changes in the regulations going on this year in addition to what the business needs from her.

None of these British entrepreneurs are alone in feeling the government doesn’t understand the problem.   Ed Molyneux feels “that the UK Government needs to work to simplify rules and regulations for SMEs and create a culture where there is less red tape and bureaucracy to deal with.”  

Sonali Parekh thinks that all businesses need to feel the government is working with them, not against them. Meanwhile, Andrew Chamberlain of IPSE says business owners need to believe that government understands the problems.   Decisions made in Whitehall that ignore local voices are pushing all the wrong buttons.

Nearly 99% of businesses are SMEs in the UK.  It was the SME’s and the British entrepreneurs behind them who drove the job creation after the last financial crash.  During that crash, people turned to self-employment and starting businesses.  IPSE report that instead the self-employed figures have shrunk and this year we have lost half a million self-employed people, the first time the figures have shrunk for 20 years.

This may be partly because many have still been on furlough, but IPSE believes it is also to do with the many gaps there have been in the support system.  Support has been generous when available, but too many people have fallen through the cracks.  The uncertainty is showing clearly in IPSE’s own research, where their members’ confidence is fragile.

In all business planning, the long term is now redundant.  The mid-term is a vague possibility.  This winter, all are facing a perfect storm of Brexit and the Pandemic.  For the self-employed, they have a third problem in the IR35 looming legislations.   Support this time round is limited to businesses that have to close, leaving their supply chain and many other hard-hit areas to fend for themselves.

There are many areas to be hugely positive about.   The FreeAgent figures show a much more optimistic picture than one might expect.   The fantastic tech industry in the UK, some areas of which we are already in the top three globally, is one thing helping to make it look possible for Britain to have an optimistic future.

But the resilience of the British entrepreneur will only hold up for so long, even with entrepreneurs.  Red tape and bureaucracy are the antipathies of everything entrepreneurial.  It is what we start businesses to get away from.  We seek freedom and control over our own lives.   

Unmanageable and sometimes nonsensical rules and regulations that squash our freedom are anathemas.  Being left to feel we are fighting alone, un-valued, and not listened to by the powers that be is the way to suffocate the most resilient of British entrepreneurs.

The resilient British entrepreneur


This piece first appeared in Just Entrepreneurs

If you would like to know more about Free Agent and their work, there is some more detail here