Owners spending less cash on their company
Hopes that the rising cost of single-handedly running a company could be offset by higher value orders - or pay rates – are being dashed by a new ‘cost of compliance’ study.
Run by the Forum of Private Business, the study shows that almost half of business-owners have less money to spend on their business (as of August 2015), than they did a year ago.
Although the owners were not quizzed about the value of orders under their belt, senior business people who are managers or directors were found in a separate study in July to have the brightest pay prospects.
It was hinted at the time that rising input costs as a micro-business – which six in ten of such senior business people then reported – might therefore be less acute.
More money coming in from clients should, theoretically, counterbalance more things the suppliers have to pay for. But the FPB’s annual study suggest not.
It found that 43% of business owners, likely to be managers or directors, have less money to put towards their outfit. Seemingly concerned, the forum said the cost of doing business would be the focus of its next study.
However micro-businesses aren’t currently just cash-poor. Almost six in ten – ironically, the same chunk who in the separate study were watching their costs increase – have less time to spend on their business, found the FPB.
And the smaller the business, the fewer hours they’ve got to spare. In fact, one-man bands and other micro-businesses emerged in the forum’s study as spending 10 times more on compliance than a 50+ staff employer.
The study adds that, on average in 2015, smaller and medium-sized enterprises spend 37 hours a month on compliance, the equivalent to a “whole working week.” In terms of cost, the compliance burden for UK SMEs is £20bn, up from £18.2bn in 2013.
It breaks down to about £14,900 per business, seemingly thanks mainly to employment law (14.4 hours a month); Health & Safety legislation (7.8 hours a month) and tax (5 hours a month).
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