Business funding gap and Business Finance Advice network
As I blogged a few days ago, the Federation of Small Business has called for a Small Business Adminstration Agency with a seat in the Cabinet.
And now a committee set up by the government has found that there could potentially be £190bn less available for business finance than is needed over the next 5 years.
That’s not good news. Small businesses are the lifeblood of the British economy but too often they can’t access the funding they need.
The committee is calling for a single agency to run all the government’s small business support schemes. This would be good as it would help achieve cohesion and streamline the myriad support schemes currently available, as well as making sure that support is provided on a targeted basis where businesses most need it, such as funding, and accounting and bookkeeping advice.
They have also recommended the establishment of a Business Finance Advice network. My issue with this is that they have suggested this be “made up of the big accountancy firms”.
That I think would not be a good idea.
In my experience, the size of an accountancy firm is directly proportional to the size of its clients’ businesses. Thus, accountants who work on their own (“sole practitioners” in accountants’ language) often tend to have a lot of solo clients. This then holds true right up to the largest accountancy practices, who will work with the largest businesses. That being so, it’s accountants from the smaller firms, not the larger ones, who will understand the needs of small businesses.
This is key, because when it comes to accounting, the needs of small and large businesses are vastly different. Large businesses will have a board of directors and a group of investors who need a lot of in-depth financial information about issues such as costs, ratios, departments, actual vs budget, and so forth. Small business owners, on the other hand, need straightforward simple accounts that give them a good view of their business’s health. The board is often one individual, they won’t have departments, they may only have a very light budget, and they won’t have a lot of investors requiring information.
So in my view, the national Business Finance Advice network should be staffed not only by accountants from the big firms but by a mixture of accountants from large, medium and small firms.
Only in this way will it be possible to provide a truly relevant finance advice service for all sizes of business.
- Share the self-employment love this Valentine’s Day!
- Introducing the Customer Sales Report
- Five stages of Self Assessment stress
- Know how long it will take your Self Assessment payment to reach HMRC
- Five ways for small businesses to beat the Monday blues