I was honoured to be asked to judge the National Enterprise Network awards this year. When you have the level of talent that we do in the UK, starting up, scaling up and growing businesses, there is reason to be very optimistic for the future, but it’s a tough job for a judge. We have a plethora of talent and if we want it to flourish and drive the recovery post-Covid, we have to nurture it.
The key is to pay our talent quickly. There are too many invoices, due to small enterprises, outstanding after their due date. There are too many contracts offered to small suppliers with long payment terms of 60/90/120 and even 360 days. Of course, there are all sorts of financial workarounds to give firms working capital to tide them over while waiting to be paid but the fundamental question is ‘why should I deliver a service, do the job well, and have to wait 4 months to get paid?
Medium sized and big businesses may have the financial resilience, resources, and financial borrowing capacity to wait for payments, deal with retentions, agree amendments, provide discounts and devote time and effort to chasing up missing payments and PO numbers, but freelancers, sole traders, micro businesses and smaller small businesses which employ 60% of the UK workforce and are constantly and rightly lauded as the backbone and the lifeblood of the economy, don’t. They are too busy doing what they do well to spend half a day a week getting paid.
This is no way to treat the talent of the economy.
Waiting for income to arrive in the bank account and managing and stretching the cashflow in the meantime, while trying to pay the wages and our own suppliers isn’t the only issue here. Uncertainty about when we’ll get paid and fear of damaging the working relationships by chasing up payments, leads to sleepless night, arguments, anxiety and other mental health problems.
Big businesses can help small suppliers by moving to more ethical payment practices and recognising how essential small business talent is to their own bigger business. Our 5.7 million small businesses are the talent that innovate and drive bigger businesses to success. We need the money owed to revolve faster in the economy to allow small businesses to invest, innovate, recruit talent, create jobs and drive recovery.
The diversity of these firms is amazing, reflecting everything that makes small firms great…. culture, ethnicity, gender, sexuality, disability, neuro-divergence. The person, in every sector and geographical area, brings a different, valuable, set of expertise, talents, life experiences and support needs to the mix. Therein lies the key to levelling up and building back better, to leading the world as the best place to start-up, scale up and grow. We may see a record number of business start-ups this year. Not all will succeed but we will have given it a shot and grabbed the opportunity by the horns.
We calculate the financial contribution to the economy, but we should also be factoring in the social value that small businesses add to their local areas and regions, to their communities, not just through the creation of jobs and provision of livelihoods, but in added societal and community contributions, in cohesion and opportunity, in environment and in wellbeing, in place and belonging, and all those elements of ecosystem that give people certainty and allow them to develop individually and grow too.
We celebrate you, the UKs talent. Now let’s get you paid quickly.