Two-thirds of small firms say Government doesn’t understand their needs

Majority of those surveyed say it is becoming more difficult to keep their businesses going

Two-thirds of small firms say the Government has little understanding of their needs when setting policy affecting business, according to a survey carried out for non-bank lender Grid Finance.

Four out of five of those polled claimed it is becoming more difficult to keep their business going, with many highlighting concerns about the incoming pension auto-enrolment scheme, which the Government is targeting for introduction next year, new employer-paid sick leave rules, and how to make their business greener.

The survey of 300 micro and small businesses, with fewer than 50 employees, was conducted by market research company Red C in late March. Some 39 per cent of respondents said they either made a loss or only broke even last year. The rate stood at 51 per cent for hospitality businesses.

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“Our research shows that small businesses in Ireland simply don’t believe that Government policy is made for them. Although they are the lifeblood of our economy small businesses struggle to keep up with new rules and regulations that bigger businesses have the resources and scale to manage and adhere to,” said Derek Butler, founder and chief executive of Grid Finance.

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‘’We have yet to see the real impact of higher interest rates on the economy and Government needs to be aware that domestic small businesses do not operate like globally funded multinationals. They are experiencing the same staffing issues, input inflation and energy shock as big business but lack the depth of resources to manage these challenges.”

Cost bases

Energy and raw material cost inflation was cited by almost 80 per cent of small firms as having big negative effects on their cost bases, with rising interest rates highlighted by 45 per cent of respondents.

Grid Finance, which was set up in 2014 and chaired by former Department of Finance secretary general John Moran, is a cash-advance lender to micro and small businesses that earn their money from credit card and debit card sales.

The company, which had been involved in crowdfunding before changing its business model in 2019, wrote €25 million of business in 2014 and is on track to increase that to €40 million to €50 million this year, according to Mr Butler.

It charges interest rates of 7-12 per cent a year, depending on the risk attached to customers.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times