Good news for desk manufacturers

SME UK is worried about quite a lot, but the particular thing I’m interested in this month is Red Tape. It’s now the third biggest concern of small businesses, just behind business retention and cashflow management. And those two issues are to some extent within a business owner’s control; there are plenty of tricks you can try to handle cashflow and to keep clients on board. But red tape is imposed on you; there are no shortcuts.

The NACFB sympathises. We’re close to the FCA, among other trade bodies, and we offer NACFB Compliance Services to our members so we’re familiar with the challenges they face not only regarding the physical act of complying with regulation but also the lack of clarity that some brokers experience. And of course you have to set aside work time – or, worse, leisure time – to fit in the bureaucratic demands.

This said, I’m always keen to look for any psychological factors that might influence the results of s survey, not least because we take an annual survey of our own and need to understand what factors are getting in the way of a clear result or one that makes sense in the context of other surveys. For example, offering a reward for cooperation reduces the reliability of the information submitted, because some respondent are motivated less by a  desire to share their experiences than by a lust for champagne (or whatever prize you’re offering). The Hitachi survey reports a great deal more dissatisfaction in Q3 than in Q1 and intuitively it’s a bit hard to see why that should be the case. After all, we have political stability and a healthy economy – so why the long face? One theory is that business owners are in effect finding a shoulder to cry on. They figure that if they talk louder about what frightens them, someone might do something about it.

They may do so, but the irony is that measures brought in to improve the lot of the small business owner backfire when they involve the headache of form-filling, hours spent listening to telephone hold music, or the perils of setting up your thirty-fifth unguessable online password. Bureaucracy is only a boon if you’re a manufacturer of desks, after all.

Despite a stated commitment by the Government to save businesses £10bn in red tape to boost productivity and keep the economy growing, Hitachi’s research suggests that this has not alleviated the worry for SMEs, while at the same time our own common sense and industry experience tells me that if anything, we’re headed in the opposite direction. The FCA has never made a stated aim to reduce red tape. Small businesses’ concern about bureaucracy it has actually increased significantly from last quarter (27% in Q3 2015 vs. 15% in Q2 2015, an increase of 12%). There might be some psychology at work here – if the Government is expressing concern about red tape, what chance has the small business owner got? If you tell someone they don’t need to worry about spiders under the bed, this comforting advice may keep them awake all night.