With a package to boost bank lending to small and medium sized enterprises (SMEs) announced in Chancellor George Osborne’s Autumn Statement, now might be the perfect time to start your own small business.
Visitors to Daventry’s town centre over the past few weeks may have noticed a number of news start ups as entrepreneurs take advantage of favourable economic conditions. With the announcement of £400 million to extend the Government-backed Enterprise Capital Funds which invest in small businesses, many more could now take the plunge.
Paul Griffiths, chief executive of Northamptonshire Chamber of Commerce, told the Gusher there are several factors behind growth in business in the area. He said: “Daventry has seen many new businesses start up in the past 12 months. Our members have been saying in our quarterly economic surveys this year that the county’s businesspeople are growing increasingly confident about the local economy, are recruiting new staff and cash is flowing again.
“Add to this the number of new business support services introduced in the past 12 months, such as Velocity, and I am not surprised that individuals with an entrepreneurial spirit are deciding that now is the right time to start up a new business.”
Initiatives like Small Business Saturday, held at the weekend, also aim to drive customers back into the arms of small businesses in the town.
Daventry and District Council (DDC) will be launching a Drop and Shop scheme aimed at getting more shoppers into the town centre each Saturday in December by offering childcare at the leisure centre for the cost of £10 per child.
While George Osborne’s other significant pledge is to guarantee up to £500 million of new bank lending to SMEs (small and medium enterprises), it is curbs to business rates which are set to make the greatest difference to small businesses.
Mr Griffiths added: “Businesses in Daventry – and Northamptonshire as a whole – will be encouraged by the Government’s efforts to curb business rate increases. Doubling business rates relief for a further year, and an inflation-linked increase in business rates capped at two per cent, will most definitely help.”
A review of the controversial business rates system, a tax dating back to the Poor Law of 1601, has been welcomed by campaigners who argue a tax calculated on the physical space a company uses is no longer fair or proportionate in the age the internet.
Business rates in England are the highest in Europe, and have been blamed by campaigners for the decline of the British high street.
“This review must deliver fundamental change to the business rates system,” said Mr Griffiths. “It is currently hindering our local firms’ ability to invest and grow.”
However, it should be noted in last year’s budget George Osborne also announced business rates reforms which really only introduced to changes to the appeal process, while the findings of a 2007 report into business rates have yet to be translated into hard policy, despite the widespread support of trade bodies.
One firm which has struggled with the cost of business rates is the Pigeonhole in Bishops Crewe House, opposite Daventry Library.
Paul Bowditch, who started the business in October 2011, said he considered units on Daventry High Street but found the associated costs were simply too high. He said: “Ideally, we would like to be on the High Street, but we can’t afford to move. I think business rates need reviewing. I would like the council to able to realise if a shop is empty there is a reason for this. It would be better to have half a loaf than no loaf at all.”
Mr Bowditch added he believes first-time business holders like himself face a difficult challenge getting up and running due to bureaucracy and the length of time it took to get through the planning process. He said: “We also found as first time business owners with no trading history that we could not get credit from the bank.”
Mr Bowditch said he was hopeful events such as Small Business Saturday would bring people back in the town in time for Christmas, a crucial time in the retail calender.
He added: “I am not a massive fan of supermarkets to be honest. Anything that will entice people to use small businesses is vital.”