EU regulations and red tape slow SME growth
Small businesses in the UK are struggling to overcome a number of regulatory hurdles and red tape, according to a new study.
It is claimed that administration issues are causing widespread disruption to firms, as productivity is dropping and many staff lack the time to focus on driving growth.
The survey of 500 SMEs by instantprint found that completing pension paperwork, HR compliance and health and safety regulations were particularly time consuming for small firms.
On average, a business owner spends a quarter of their time on administrative tasks – the equivalent to around ten hours of the working week.
It is having a lasting effect on businesses too, with one in ten owners saying that they leave as little as one hour a week to focus on growing their enterprise.
Meanwhile 8% of SME owners said they had no time at all to focus on growth, meaning their business is running the risk of stagnating or losing out to competitors.
Instantprint co-founder James Kinsella highlighted the need to manage time effectively in order to optimise the use of working hours each day and not ‘fight the clock’.
The study also focused on the regulatory issues that are most influential on business performance, with EU restrictions a particular area of concern for SME owners.
Non-compliance penalties and strict regulations were found to be hitting profit margins in some instances, place pressure on businesses to maintain their cash flow.
Business owners have also voiced concerns in recent weeks about the forthcoming business rate increases, with several industry bodies also suggesting that it may force firms into changing location or ceasing trading altogether.
Any business with fears for its future should conduct an independent business review to see if its operational practices can be improved.
Such activity should highlight areas where cash flow can be improved, reveal potential opportunities for refinance and even reveal if a business maybe at risk of covenant breaches.
By Phil Smith