How small businesses can make a big difference…
It is fair to say that small and medium businesses have been thriving over the last year. Initiatives such as Small Business Saturday have been steadily bringing SMEs into focus, urging consumers to support local businesses.
Yet not so long ago the circumstances were completely different, as many SMEs were struggling to even stay afloat, let alone generate any profit. Nevertheless, the recession encouraged more people to go it alone and start up their own ventures, fleeing from the threat of impending job cuts and salary losses.
A few years on and the outlook is much more positive for SMEs, with 5.2 million of them powering the UK economy, generating a staggering £3,500 billion profit, according to the Federation of Small Businesses. With the expectation that SMEs will continue to grow, we look at how they could be the catalysts to the development of the UK economy.
Growing market
Research by insurance brokers LV= found that a new generation of business owners have entered the market, with 180,000 people starting up their own company in 2014.
As well as an increased market presence, SMEs have also been creating a larger amount of jobs. They employed 15.2 million people at the start of 2014 – a figure which is set to grow. A further 21% of SME owners claimed that they have hired more staff over the past year, the research by LV= revealed. They reported that 4% of owners have taken on staff for the very first time, something which would never have been feasible a few years ago.
Unemployment is still a huge issue for many people living in the UK, as the Office for National Statistics found that in November 2014, 1.91 million people were registered as unemployed. While this is still a substantial figure, the rise of SME employment could be a promising solution as they are creating thousands of jobs across the country.
Boosted economy
In a juxtaposition to the economic climate of the last few years, many SMEs have overcome the recession and are showing strong improvement and growth.
LV= found that 75% of SMEs have reported increased growth to their annual turnover compared to 2013, while a further 34% of SMEs claimed that their profits had remained steady since last year.
Increased profits are not only good for the businesses that generate them, but for the UK economy overall. Greater profits mean that SMEs will expand and as mentioned before, will increase the amount of employees. A larger UK workforce will in turn pay more money into the economy through taxes and buying property.
SMEs doing their bit
Now that we’ve emerged from the financial crisis, entrepreneurs can sleep a little easier and can also focus on making a difference in their local communities.
More companies are getting involved in charitable initiatives, as this enables the owners to give something back to society, while at the same time enhancing their brand’s reputation. Boxes2Move – a cardboard box manufacturer and supplier based in the North West of England – is a good example of this.
The firm has been encouraging other local businesses to fill some of their moving boxes with essential items that homeless people can use. These are then being distributed by local charities in the Greater Manchester area. You can learn more about this particular scheme here.
It just goes to show that SMEs are making a big difference in various ways.
Siobhan Davies is the Brand Development Manager of Boxes2Move. A company who pride themselves on providing an extensive range of high performance, premium grade cardboard box packages for moving and storage.
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