What goes up must come down. It’s an old adage. I wish it would apply itself quicker to bills, inflation and interest rates but while we wait for those to fall, it’s small business confidence that’s following the well-worn path downwards. The stats from FSB, ICAEW, the Chambers, show it was on the rise at the beginning of the year but it’s falling again. Confidence really is the main driver of business behaviour, particularly for the smallest firms.
Confidence is the feeling or belief that we can rely on someone or something. In business we need confidence in a vast range of other people to be fully confident that we’ll succeed: government, economy, customers, suppliers, transport systems, lenders/funders, advisers, and more. Yet we’re in a perfect confidence storm.
Everything is more expensive, but we can’t be confident about when we’ll get paid. It’s harder to get loans because lenders are less confident we’ll be able to pay it back. We can’t be confident of affording the bills, wages, buy the next lot of materials to carry on in business. Strikes affect transport so we can’t even be confident goods will arrive on time, in time. And there’s an overarching lack of confidence that people in power really understand the needs of the vast range of small and micro businesses, freelancers and sole traders.
Lack of confidence does terrible things to people. We retreat and our interactions with other people become less assertive and positive. We’re less decisive, motivated and creative. Our mental health deteriorates. We cease to be bold and brave, creative and innovative, determined and clear-sighted. We worry, prevaricate, lose focus and momentum. We don’t know where to turn, who to trust. We don’t talk about it for fear of having our business acumen questioned, and losing work to other more confident suppliers.
When small business confidence falls the economy, wider society, local communities, our employees, families, friends and customers all lose out.
Sometimes the word confidence doesn’t quite cut it. It doesn’t sound big enough for how vital it is. It’s sometimes used in derogatory terms such as people described as cocky, arrogant, over-confident. We need to claim ‘confidence’ back as the positive thing it is. The reports next quarter need to say ‘that most vital element of small business (confidence) is rising again’. Without it we’re in a downward spiral. The question for all of us is: what are we going to do, together, to give small businesses the confidence they need to invest, innovate and grow?