With the dust beginning to settle on the ballot boxes for another five years, commentators and experts are now trying to make head and tail of the unexpected Conservative majority, the SNP-led revolution in Scotland and the heavy defeats for Labour and the Liberal Democrats. I thought I’d throw my tuppence-worth in the hat.
Good for business?
The share and currency markets positively shot up on the first news of a possible Tory majority and have stayed buoyant since. In all it would seem that the certainty provided by a pro-business and enterprise Tory majority government has boosted optimism for the future of business growth in this country and the markets reflected this. Although many of the SMEs I have spoken to are talking about investing and getting out their business plans again, those who do business with Europe are still cautious.
There is the promise of an in-out referendum on Britain’s membership of the EU to worry about and the Tories seem split on the subject of Europe. All of this creates uncertainty for any business looking to expand its trade with the Eurozone countries. Still, it would seem on balance that British businesses are looking forward to 5 years of investment and growth.
Good for employment?
The Conservative manifesto made much of their aim to help businesses create 2 million jobs in the next parliament (in order to “achieve full employment”). To do so, they have promised changes to corporation tax, business rates and funding for apprenticeships. Anecdotally there are many SMEs in the manufacturing and engineering sectors that I know are crying out for skilled workers, and I don’t know of a retailer who is against a business rates review. If the government can deliver on these promises, then there will be further opportunities for investment and growth in the Midlands. That said, look out for pressure to reform the minimum wage to a living wage, so-called zero-hours contracts and debates about the social impact of low pay on those living below the poverty line. There may well be opportunities for businesses to give more back to their communities through charitable and volunteer work and these opportunities should be welcomed.
Planning for growth
Renewed optimism in the markets and in industry will lead to many SMEs taking bold steps to invest in and grow their businesses. If you’re one of them, then don’t forget take professional advice before implementing your growth plans. Too many times I have seen businesses that have overstretched themselves early on and, without sufficient reserves or access to funding, they have suffered serious cash flow pressures and failed with their plans in tatters. After 5 years of austerity and cut-backs, many businesses will have built a cash war chest and be looking to use it. Many of my clients find themselves in that position and will be on the look-out for opportunities to grow by acquisition.
However you look to grow your business, your accountants and lawyers are well placed to help you ensure that your plans are robust and future proof, allowing you to be ambitious and prudent at the same time. Here’s hoping we can all expect five years of growth and opportunity for business in the Midlands. Cheers!