A report published last week found that most people aged between 16-25 states that their main aspiration is to become a company formation owner. But are they aware of the hard work, commitment and dedication running your own company demands?

A recent report conducted by independent business consultancy ‘M.K Consultancy’ found that over sixty per cent of company formation owners will be taking their laptop on holiday.

Thirty per cent say they will call their office everyday, twenty two per cent say they will work on an average of two hours a day on holiday, while an overwhelming seventy per cent say they have instructed staff to contact them if anything comes up which they feel is to important for them to deal with independently.
Mike Crowther, founder and managing director of M.K Crowther comments; “Forming a company and running a successful business takes a certain sort of person. Most company directors are extremely industrious, committed and completely dedicated to their business and since the economic downturn; they feel they cannot afford to leave their business, even to take a holiday.”

There has been much made of the adversarial management style of many entrepreneurs on the television; from Lord Sugar to Dragon Peter Jones, the media has been quick to draw comparisons between successful business people and being tough talking.

However, according to a recent report conducted by the Chartered Institute of Personnel and Development, since the economic downturn many company formation owners have made radical changes to their management style.

The results of the report revealed that an overwhelming fifty eight per of company formation owners , felt that throughout the recession , they needed to take the role of team member rather than dictatorial leader , in order to support and motivate their employees in the context of pay freezes and salary cuts.

Oscar Johnston, owner of retail chain ‘SOS’, comments; “The challenges the recession presented to the SME sector have been well documented. However, the challenges it posed to employees have been largely un-documented. Employees have had to deal with the threat of redundancy, pay freezes and in some instances pay cuts, consequently employers have had to become more like team members than bosses.”

It is a well documented fact that the recruitment sector was among those most badly affected by the economic downturn.

Indeed, as a result of the fact that many company owners were concentrating their efforts on making sure they did not have to make redundancies, rather than considering hiring new members of staff, the recruitment sector decreased by an estimated thirteen per cent while unemployment figures were at record levels.

However, at the start of the year – a notoriously busy period in recruitment – the outlook began to look more positive. A report revealed that over one in five small businesses were planning to hire at least one member of staff in the first quarter.
Yet, recent figures which reveal that over two million people in the UK are unemployed indicate that the initial positivity may have been ill- informed.

In years gone by, there was a commonly held perception that working within an established large corporation would mean, greater job security, a better salary, more opportunity to move up the career ladder and overall, greater perks than an employee would get in a small or recently formed company. However, if the findings of a recent report are to be believed, the recession has led to a shift in this perception.

Online recruitment website ‘ All About Jobs’ surveyed over one thousand people between the ages of 20-35 and ask them what sort of company they would prefer to work for. An overwhelming forty three per cent said that they would prefer to work within a small organization over a large corporate company.

The report also looked into employees already working within large corporations and smaller companies and overall it found that employees working within small companies or companies who had only recently been formed, we much more satisfied with their roles and is far less likely to look for another job within the first two years.

Dr Laurie Marks, lecturer in Human Resources and Business Strategy, comments; “ I am not at all surprised by the results of this report . The recession has prompted many people to re-assess what is important in a job and for most flexible working, feeling they have a role in the direction of the company they work for has becoming increasingly important. Therefore it comes as little surprise that working for a small business came out on top in the poll.”

Having a green corporate image has been a vital part of company branding for a number of years. Most organizations, from large companies such as Marks and Spencer and Tesco to smaller businesses such as your local greengrocers, have some form of environment policy, even if it is simply adding a ‘Do Not Print Unnecessarily’ footer to end of their corporate email.

However, as the economic downturn has put an increasing amount of pressure on small business, having a ‘green agenda’ has gone further and further down the list of many company directors priorities.

According to a report by marketing and business consultants ‘First Forward Consultancy’ just fewer than ten per cent of businesses are focusing any revenue on improving their current green profile. A further forty per cent admit to ignoring previous green policies they devised before the recession.


Richard Joyce, spokesperson for ‘First Forward Consultancy’; “It is clear that the recession has stunted many companies from paying particular attention to the green credentials of their businesses. From the feedback we have received from our clients it is obvious that most company directors have focused on improving the financial future of their company and protecting the jobs of their workforce, rather than implementing environmental strategies.”

“While we obviously appreciate that many business have had to refocus their objectives during the downturn, it is important that as the UK’s economy recovers, business look again at making their companies more energy efficient. Not only will this help the environment, it will also help businesses to make much needed savings on their energy costs.”

There has been much in the media recently about the fact that many companies – ranging from large organizations to small recently formed businesses – have become overly-reliant on apprentices and internships throughout the recession.

This has lead; it has been suggested, to companies discriminating against apprentices and those doing an internship. As a consequence, the government has devised a new employment law, with objective of ensuring all apprentices in the UK are paid and treated fairly.

Enforceable from the 1st October, under the new laws company formation owners will have to pay apprentices a minimal wage of £2.50 an hour. The uniform minimum wage rate has also increased across the board to £5.93 per hour. We ask Ben Lamb, spokesperson for the Federation of Small Business and Enterprise for his feedback on the new legislation:

“ While I feel that the increase in minimum wage is fair and works both to protect the lowest paid workers and ensure that small business can still afford to hire staff , I think plans to introduce a minimal wage for apprentices my dissuade small businesses from hiring them –especially in the current climate.”

When the government announced its plans to cut public spending, it was clear that the private enterprise sector would have the responsibility of stimulating economic growth and driving recovery. Consequently, many small business and company formation owners felt the government should offer more support to private enterprise.

While Osborne’s ‘Emergency Budget’ did offer some concessions to support small businesses –including a planned reduction in Corporation Tax and NI contributions – many small business owners feel that it failed to address some of the major challenges facing enterprise today , namely the lack of available finance.

A report conducted by the Forum of Small Businesses and Enterprise, found that as the small business sector provides nearly half of all employment in the UK, the government should be doing more to support it, both from a policy level right down to providing more ‘hands-on’ support.

In the ‘Emergency Budget’ Osborne announced his planned to scrap the UK’s Regional Development Agencies and replacing them with individuals who have been elected by people to help generate, support and represent enterprise in their area.

Small businesses are an integral part of the UK’s economic recovery and concentrating on supporting them at a local level can only be a positive step in the right direction.

When the coalition government first announced its plans to devise an Emergency budget with the objective of addressing the country’s massive budget deficit, the small business and company formation sector immediately anticipated that the budget would include a VAT increase.

Forums were full of small business owners explaining their fears that the long term impact of a VAT tax increase would damage their businesses beyond repair and economists warned that increasing VAT at such a critical stage of the UK’s economic recovery could risk a ‘double-dip’ recession.

However, while the SME sector and the majority of the media focused on the impact of a VAT increase, they largely ignored what long term impact raising Capital Gains Tax would have on enterprise. That was until a certain Lord Sugar explained how an increase in CGT would stunt the UK’s economic recovery by discouraging investment in enterprise, despite the governments pledge not to increase CGT on ‘entrepreneurial activities.’

While the Chancellor did, as predicted, increase CGT, he showed his understanding for the fact that Britain’s economic recovery would be ‘enterprise lead’ and therefore reduced the amount of CGT entrepreneurs would have to pay.

On the whole, many small business owners have welcomed the fact that the chancellor has listened to feedback from the SME sector and used it to inform the Emergency Budget, however, some still feel that the VAT increase is an ill considered and short sighted economic strategy.

Since the recession, began the media has been full of doom and gloom tales of companies going into administration, rising unemployment and declining consumer confidence. It got to a stage where you could not read a newspaper without hearing about the decline of a high street giant or be confronted with the headline ‘Head of XXX announces record losses.”

However, what does all this scaremongering actually do to help the economic situation? Of course we have a right to know the truth, but what impact do all the headlines and tales of economic woe, have on the nations entrepreneurs and company formation owners?

Well, according to a recent report conducted by the Forum of Small Business and Enterprise, absolutely none.

The report ,which questioned over three hundred CEO’s and company founders, found that over seventy per cent of those surveyed commented that remaining optimistic is one of the most important elements of surviving an economic downturn.

Yvette May, spokesperson for the Forum of Small Business and Enterprise, comments; “Many studies have been commissioned to look into the characteristics of what makes a successful entrepreneur and having an optimistic attitude comes top of almost every list. Company formation owners are focused on driving new business and getting the best possible outcome from any opportunity the market offers. Pessimism just isn’t the default setting for most entrepreneurs.”

While most entrepreneurs claimed to be optimistic about the future, they admitted that they would remain cautious for the remainder of 2010.

The economic downturn has put enormous pressure on the UK’s workforce – that fact has been well documented. But what about business owners and bosses- the people who have to deal with the responsibility of keeping jobs for their employees, the future stability of their companies, while at the same time attempting to be a good boss? Little is said about the pressure they are under.

A new survey, conducted by professional service consultants ‘Investco’, revealed that fifty per cent of all company directors feel that they are responsible for the future of their employees, while over forty five per cent admitted that one of the major challenges of their job was trying to be a good boss.

According to human resource consultant Ian Gormely, the definition of ‘a good boss’ has changed over the past few years. He comments:

“Bosses set the tone of any organization. Good bosses can inspire and empower a workforce leading to increased profitability, while a bad boss can cause discontent and high staff turnover. In previous years a ‘good boss’ was perceived as someone who listened and valued their employees, capable of rolling up their proverbial sleeves and working hard. However, throughout the economic downturn, employees have begun to value a boss who is passionate about their company and committed to ensuring they keep their jobs.”