FSB: Small firm growing but need government support

More than half of businesses have resisted the worst of the recession by innovating, creating new products and services, according to a new survey by the Federation of Small Businesses (FSB) and ICM.

The FSB-ICM ‘Voice of Small Business’ Annual Survey 2009 reveals that 53 per cent of businesses introduced new or improved products and services last year, and 51 per cent intend to continue innovating next year, showing that small businesses are keen to grow and develop, despite the tough times.

The survey indicates more good news from the small business sector: 27 per cent of the 10,000 respondents said their profitability increased over the last year and 30 per cent said their sales volume had increased over the last financial year.

However, a third of respondents who have borrowed finance in the last year reported that they had been charged more, the vast majority saying their rates increased by more than one percentage point. Half also said they had not taken out any loans at all in the last 12 months, which could be a sign that they were put off by the prohibitive cost of finance.

Three in 10 small businesses surveyed said a cut in employers’ National Insurance would improve their economic prospects in the recession, while another three in 10 businesses said if banks were to lend more, or more fairly, that would be key to improving their prospects.

The FSB is calling the Government to put in place a renewed stimulus package of specific and targeted measures to get the economy going again, nurturing the small business sector’s tentative growth.

John Wright, National Chairman of the Federation of Small Businesses, said:

“As the UK goes to the polls next year, public debt and unemployment will still be high, and the Government will have to make tough decisions to encourage recovery.

“The FSB is calling for a renewed economic stimulus to help small businesses continue to create jobs, get access to crucial finance, innovate and start up new businesses, to get us squarely on the road to recovery.”

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