Decline of Small Business Sector in the UK!

In a report, due to be published next month, from the European School of Management - ESM, it is reported that there has been a marked decline in small business activity in the the UK under Gordon Brown.

In the last decade when most peoples idea of small business centered around reality shows, small business has suffered due to a flawed understanding of small business issues and a “reality show“ like incompetence of the government departments involved.

Here are some of the reported findings of the ESM‘s team:

• a decline from 29% in 1996 to 16% in 2006 of small businesses reaching a £1 Mio. turnover within five years of start-up;
• only 6.8% have a turnover of £7 Mio after five years, much lower than the 16% European average.

Professor Davide Sola, the report’s author and dean of the ESM said:

        “The tax system for small businesses in the UK is becoming less competitive. the changes to capital         gains tax in the 2007 Pre-Budget Report will further undermine the attractiveness of the Uk as a place         to grow a business. The implications for investment and job creation could be very damaging.“

The ESM’s report covers a time period of ten years on the quality and speed of small business growth, as it is said to be a better guide of entrepreneurship, than the number of companies starting. A third of all business start-ups fail in the first three years and only 10 per cent achieve high growth.

Given the fact that almost 70 per cent of all small business do not wish to grow, due to the red-tape burden in the UK, any changes to this trend will be hard to come by - especially under this government!

The report was commissioned by the shadow Chancellor George Osborne, so let’s hope the next government will correct some of the big mistakes made in the past ten years. I’m allowed to dream, aren’t I? ST.

2 Responses to “Decline of Small Business Sector in the UK!”

1. Andrew Ivey
   http://www.timetomarket.co.uk
   
   Said on January 14th, 2008 at 1:18 pm

   The red-tape burden extends to all areas of contact with government: employment law, tax law, environmental law. The list is endless. We can only dream of a less regulated business environment - so long as prospective politicians reckon that more legislation is good for all of us.

2. Mary Stanton
   http://www.altiss.co.uk
   
   Said on January 21st, 2008 at 2:48 pm

   I was under the impression that the failure rate for 3 years was much higher than a third. Implying that survival is a big priority.

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