In 2008 the freedom in which we earned and spent our money changed, probably forever. Jobs were lost and prices started rising (except for the house market). Basically, from what we were told by the media, life was going to be extremely hard for the next few years.
5 years on, in the middle of a glorious British summer, things are looking on the up. House prices are rising (not always a good thing), banks are lending and the job market is looking a lot healthier. But still, local businesses are struggling like they’ve never struggled before. Now, I’m talking about the small business, the ones that employ up to 20 people, where the owner is still very much involved in the day to day running of the business. Their dream of the successful ‘fun’ place to be everyday is slowly realised as just that...a dream, and not a reality.
Personally, I believe there are a fair proportion of business owners that simply aren’t up to the task of running a business in the times of recession and great change. Fifteen years ago there was no Google, and Amazon was barely even heard of, so we had to trek into town, or pick up the phone following seeing an advert in the paper or phonebook to make our purchases.
But just 7-10 years ago our spending patterns started to become largely focused on what we saw via the internet. Recommendations on Facebook from our friends, a quick Google search, email newsletters and lots more methods were helping us to stay on the sofa and make our purchases from our own homes. The small, local business that sold products found elsewhere online, who relied on the fact that we had nowhere else to buy them, were taken by surprise, and quickly too. Many closed, many struggled on hoping for a return to the ‘old days’. But some adapted, focused on customer service, looked at online options and upped their game when it came to marketing. The later are the businesses that are doing well; they’re open to new ideas and in the sense, are true entrepreneurs.
Take a walk through Hertford, have a look at the shops and businesses around us and see for yourself. All three of the scenarios mentioned above are abundant in Hertford and probably every town in the UK. There are success stories, disaster stories and lots of business owners still waiting for change!
Now, here’s where I believe the recession is over, and in fact not really affecting the businesses around us at all; The Range Rover Evoque , the British built prestige 4wd vehicle that starts at £30,000 from new, are reporting huge profits. In two years they’ve trebled staff to 4,500, gone to 24 hour production and raised £3bn in UK contracts. It’s not just Range Rover though; other, less prestigious car manufacturers are seeing a surge in orders. Banks are back in profit (and probably back to paying big bonuses too!) John Lewis have paid their staff a 17% profit bonus following big increases. Everywhere you look, there are success stories.
But everywhere you look there are still disaster stories, and usually from the small business sector. So why is this happening? I have two reasons for this, there are probably lots more, but for the purpose of this blog and the message I’m trying to deliver let’s keep it to two.
It’s definitely about mindset, and what the business owner is prepared to do in order to stay in business. But it’s also about business rates, and maybe rent too.
Let’s look 20 miles south at London, it’s been reported that there’s been an increase of £700,000,000 collected in business rates from last year. Ok, that’s not exactly groundbreaking information, but what is, is the fact it’s an increase of nearly £3/4bn from 2000 less businesses than last year.
To reiterate; 2,000 less businesses than last year, but a £700,000,000 increase in rates collected from those still clinging on. Perhaps, this is the reason there are 2,000 less businesses to collect from than last year?
Now I’m an owner of two local businesses, I pay rent and rates, it’s expensive, but it’s something I’ve got to do to remain in business. I have no right to remain in business, neither does anyone else. It’s my responsibility to find customers to pay my bills, and it’ll certainly be my fault if my business fails. Not the fault of the local authority who controls the rates, or the landlord who sets the rent.
I know I’ll be fine because I’m prepared to bend over backwards to run both of my businesses. I’ll do whatever it takes to keep my phone ringing and my emails pinging. I won’t give up, because you never know how close you are to gold (read Napoleon Hill’s, Think And Grow Rich for an insight to this mindset).
However, businesses are at the mercy of rates, and the increases that inevitably happen. Of course the local authority has financial targets to meet. But these increases are made without a thought to those tiny dreams that lead to the big risk taken by the business owner to turn that dream into a reality.
Thankfully the spending patterns are returning towards what we saw a few years back, but I think forever more people will be driven by value and really understand the value of the pounds in their pocket. If you’re a small business owner reading this then take solace in the fact money is being spent again, but remember to give as many reasons as possible for your customers to keep coming back.
If you’re a member of the public reading this, just bear a thought to the business owner before making that purchase online. Don’t always be driven by price, be driven by the value that buying local brings you. Many products and services found locally are sometimes dearer, but only slightly. It’s someone’s dream and passion that’s at the mercy of your decision to spend your money, but it’s also at the mercy of the rate increases experienced by so many businesses every year.
Thanks for reading, have a great day, Rob
Member since: 10th July 2012
Hi there, my name's Victoria and as owner of thebestof Hertford and Ware it's my job to find and promote the best information, events and businesses that Hertford and Ware have to offer!