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Small Businesses Key to Recovery

9 January 2012

In an excellent article in City AM, Xavier Rolet has pointed out the obvious truth.  Big successful businesses started small and in order to have sustainable jobs and growth small businesses need to be nurtured and unfettered.  Consider the numbers, there are 4.8m SMEs in the UK and for each of these companies to generate one job would be easier than  FTSE 100 companies adding 48,000 each...! His angle is mainly to call for tax breaks for investing in companies and that is understandable given his position as CEO of the Stock Exchange Group.  What he would like to see is minority investors getting more incentives to invest and their investments being more easily traded.  AIM has been successful and UK Aim listed companies have contributed £12bn to the GDP.From a non investing side, businesses owners need to be encouraged to create jobs and lowering the cost of employment is an obvious one.  The payroll tax in the US has been scaled back to 4.2% and many people believe this has helped generate jobs.Access to new forms of finance are currently replacing some bank lending, albiet at a cost, but the flow of finance is crucial to growth wherever it comes from - Equity investment or lending.

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