In this weeks column a couple of key announcements have been made which are sure to be very significant for startups. One of the most mentioned topics in this column has been the reprehensible late payments culture that has become almost commonplace in the UK today. However, this week has seen a new measure introduced which will certainly help combat this terrible status-quo.
This week has also seen the government appoint a leading entrepreneur to conduct a review on entrepreneurship in deprived parts of the country – and how this can be encouraged further. At MadeSimple we support any measure – or any review – which helps contribute towards creating an environment in which small businesses can thrive. If you would like to read more about small business issues then read our blogs here.
It has been announced by the government that small firms will have invoice finance restrictions lifted.
- Small firms will now be able to raise funds through borrowing from unpaid invoices from larger companies.
- According to Tech City News the current clauses currently in place “ Will be nullified while retaining a customer’s right to prevent traditional sub – contracting arrangements ”
- It is expected that this new ruling will make it much easier for small businesses to get access to quick funds – if their suppliers are taking a long time to pay.
- According to Small Business Minister Anna Soubry by “ By scrapping restrictions on invoice finance, thousands of firms across the country could benefit from faster access to hard-fought funds.”
- It is expected that this will come into force early next year.
Breakdown – There is massive potential here to do two things: Firstly it will show larger companies who frequently pay late that invoices can be used as security and might encourage them to pay earlier. It can also create better conditions for smaller firms so that they are not at the mercy of large suppliers.
It is likely that this measure will ensure that small and micro businesses are able to focus on growing their business rather than chasing suppliers for payment. It will be hugely helpful in terms of keeping on top of cash flow and managing finance, which are often disrupted because of late payment issues. Invoice financing firms will benefit hugely, so its no surprise that Anil Stocker – CEO of leading invoice finance firm Market Invoice welcomed this news “ The government’s move to stop big companies preventing smaller businesses using invoices to access finance is a welcome one, there was no good reason for big businesses to hold this power over their suppliers.” There is real hope that this measure will help tackle the problems of late payments. I for one hope that this proves to be effective and small firms see tangible benefits.
Lingerie entrepreneur will lead comprehensive startup review
Michelle Mone OBE was this week selected by the Department of Work and Pensions to conduct a comprehensive review on the state of startups in the UK.
- The report will focus on finding ways to improve and encourage entrepreneurship to thrive in deprived parts of the UK.
- It will target benefit claimers, women, young people out of work and school as well as disabled and ex-criminals.
- Mone herself came from a disadvantaged background and left school at 15 with no qualifications.
- On her appointment Mone give a glimpse of what to expect from this review – and how her own experiences might shape it.
- “ My philosophy is that it does not matter where you are from, what education you have, or if you are from an affluent background or not, you can make it if you work hard, set your goals and never give up.”
- Ms Mone has been involved in several ventures but is famous for founding lingerie brand Ultimo.
Breakdown – With this appointment it is clear that the government are looking for someone to look at the issue who really understands them. Mone came from a difficult background and is a real example of ‘ rags to riches ‘ and demonstrating through hard work that anything is possible. Perhaps the experiences that she has had will be reflected in the report, and will hopefully help create something truly comprehensive.
However when something is at such an early stage it is very unclear as to the impact that this will have. So whilst this move should be welcomed it’s important to understand that this is a long process and it will take a great deal of time to see anything concrete that comes from it.
In other news… For anyone who is thinking of opening a pop up will be encouraged by findings this week by Cebr in their latest report. Revenue has grown exponentially over the last year with 12.3% more revenue this year as opposed to 8.4% last year. According to Ryan Fowler at Tech City News “ Britain is now host to more than 10,000 pop-ups, according to the report, and the sector employs more than 26,000 people.” Pop up’s have become a hugely lucrative market. So if this is something you are considering doing then these encouraging numbers demonstrate a good chance of success.
That’s it for this week. If you would like to read previous startup news blogs read here.