Owner-managed businesses need meaningful help and support from the Government.
That is the message from the Association of Practising Accountants (APA) following the analysis of its latest owner-managed business survey.
The APA is a network of 20 leading business and professional advisory firms, including Armstrong Watson.
The survey, which received 512 responses in May and June, found that 83% of business owners rated support from the outgoing administration as either poor or very poor while only 30% believed an incoming administration would improve things.
While 46% of respondents feel in better shape to manage the challenges of the future than they did 12 months ago, only 28% see growth as the main priority over the next 12 months, while 65% of these businesses are unlikely to make significant capital investment in the same period.
The survey identified uncertain trading conditions (38%) wage inflation (17%) and labour shortages (14%) as the biggest challenges facing owner managed businesses. 82% of respondents expect supply-chain costs to rise over the next 12 months, with almost as many (81%) who expect labour costs to rise.
Commenting on the findings APA Chairman Martin Clapson said: “Owner-managed businesses need meaningful help and support from Government. Our analysis suggests that many have given up hope of this coming. There is a real opportunity for the Labour Government to reengage with this vital sector of the UK economy provided it can demonstrate it understands the needs of these businesses.
Government needs to identify a series of short-term, stop gap measures to reduce the immediate challenges facing SMEs including revisiting rises in corporation tax, addressing labour shortages with more flexible migrant policies, incentivising capital investment and being seen to champion the SME sector more broadly.
“There is also a need to take a more realistic view of our future trading relations with Europe recognising that labour shortages coupled with an altogether more challenging export environment pose a real threat to long term growth.”
Paul Dickson, Armstrong Watson’s CEO and Managing Partner, said: “We are committed to supporting owner-managed businesses, but they continue to face significant challenges. It is clear from the APA findings that uncertainty remains across many sectors of the economy and the level of support these businesses require also needs to come from the Government. We hope that Rachel Reeves can deliver announcements in the Autumn Budget that provide a more optimistic outlook for business owners in the months and years to come.
