Debbie Perry, CEO of residential property management specialists Balinor Group Holdings has spoken out about the main challenges facing small businesses.
These challenges, which have only been exacerbated by the Covid-19 pandemic, include competing with larger companies, relying on the strength of your reputation, and dealing with regulatory burdens. Perry’s words will be of particular interest to anyone thinking of starting their own business.
‘We do not have the resources for marketing or to recruit sales and marketing staff,’ Perry explains, ‘which is why it is so important that our performance is good so we can trade on our reputation and recommendations.
‘When we compete for any potential new business, getting our foot in the door is the biggest challenge. Once we have the opportunity to introduce our business in more detail and show what we can offer, it is evident that we can compete with anyone. We can offer the same service and package offered by larger companies, but with the added benefit that we can give more of a personal service.’
When running a small team, it is so important to fill that team with the right people who understand the mindset and mentality required for a small business to provide.
’It is not just about meeting the criteria for the role itself,’ says Perry. ‘The person must have the right attitude and be a team player. As an SME, we have to ensure that there are no conflicts amongst staff. We emphasise to all applicants that they will be working in a small business environment and not a large corporate company.’
These challenges are not restricted to directly employed staff.
‘We work hard to ensure that all our subcontractors are of the highest standard because their performance reflects on us. The barrier we have is that there are not many small local contractors who are interested in the proposed works, despite the level of unemployed, so we often have to rely on larger organisations that carry a higher cost.’
Another big challenge for any small business is the weight of regulatory burdens that can seem overwhelming when you are first starting out.
‘We face the same financial challenges that SMEs face in any industry,’ says Perry. ‘There is very little funding or support for SMEs in the UK, and the tax and wage regulations can be quite onerous. A good case in point is the minimum wage regulations that keep rising, even for 16-year-olds.
‘Outside the minimum wage, staff package expectations for senior employees are growing, and for a small business it is hard to satisfy the demands for benefits, such as subsidised travel in the form of company cars, fuel allowance and private healthcare.
‘When it comes to taxation, there is a continued heavy burden from employers, national Insurance contributions and the high level of Corporation Tax.’
In terms of what the government could do to help ease these issues, Perry has a number of ideas.
‘There should be help with national insurance for SMEs, and the rate of corporation tax should be set on turnover (rather than profit). The introduction of the Work Place Pension added another burden to SME’s, and added another three per cent to salary costs.’
But despite all of these challenges, potential entrepreneurs should not despair. There is one vital ingredient that can allow a company to thrive. And anyone thinking of starting their own business should focus on getting this element right. This is the one area over which you have the most control.
Your own leadership.
If you get this right, everything else may well follow.
‘Leadership,’ says Perry, ‘is the common thread that runs through the entire process of translating strategy into results and is the key to engaging the hearts and minds of our people. Good leadership will acknowledge and allow communication with all staff, which is vital to link individual commitment and activity to the fulfilment of our organisational plans.’