The fact that the government is expected to announce that the UK’s economy is officially out of recession, shortly, has provoked both economists and journalists to assess the main results of the ‘credit crunch’ on business as they see it.

While it clear that the recession has had a number of far reaching consequences for UK business – the number of employees considering company formation has increased, redundancy has risen exponentially and crucially many companies have gone into administration – what many commentators have failed to address up to now, is the fact that recovery from the recession will also have an impact on businesses in the UK. Namely, the fact that economic recovery will now create a more competitive context for enterprise.

According to a report commissioned by the SME Forum, over 60% of all small business owners feel that competition within their sector will now increase. Mark Andrews, small business advisor comments; “The recession has presented many challenges to the SME sector. Businesses that have survived ,will undoubtedly emerge from the recession more cost efficient and ready to grow. However, as the barrier to market entry lower, these businessess may have to be prepared to do battle to for market share.”

Over 50% of all the 700 companies asked are concentrating on increasing their market share in 2010, 25% are planning to stabilize their cash flow while the remainder are focusing on recruiting new staff.

January is notorious for being the most miserable month of the year; the weather is awful, the bills you ran up over the festive period are in and pay day seems a long way away. So a recent report, claiming that over 60% of all employees are also currently unsatisfied with their job, comes as little surprise.

The report, conducted by the CIPD, found that employee morale is at an all time low this month and subsequently, the number of employees considering company formation is set to rise. The CIPD also found that the majority of employees have experienced a 30% decrease in living standards in 2009, which is also a reason why they are considering forming their own company.

HR consultant Anne Richardson, comments: ‘ Despite the fact that the government is expected to announce that the UK is now out of recession, employers need to appreciate that for the majority of their workforce , the “Credit Crunch’ is still very much a reality. Employers need to listen to their team and invest in ways of boosting their morale and commitment. As the findings from this recent report confirm, pay freezes, the threat of redundancy and job insecurity have left the UK with a largely disaffected workforce and if productivity is to be maintained, small business owners need to ensure their employees continue to be motivated.”

According to the leader of the opposition, David Cameron, company formation in the UK is one of the most laborious and time consuming processes in the world, which presents many barriers to entrepreneurialism in this country and if his party was to come into power at the next general election it would be one of the main things they would seek to change

Cameron made this statement on the Andrew Marr show and his opinion has been supported by a recent report, which suggests that 10% of all entrepreneurs in the UK are considering forming a company and operating it abroad, as a consequence of increasing taxes and employment legislation.

According to the report, which surveyed over 3,000 business owners, over 30% of respondents felt that the UK offered an in-hospitable environment in which to form and run a company. While 30% feel that other countries offer more support and financial incentives for the budding entrepreneur.

Oliver Kelly, managing director of ‘I Media UK’ comments; “On the whole, I would agree with the findings of the report. I have run companies in many different companies and must admit that the bureaucratic red tape and legistalative hoops one has to jump through in the UK are the most excessive I have ever experienced. However, I do not agree with Cameron’s contention that company formation in the UK is difficult, especially with the new changes to the Memorandum of Article that came in in October last year, which has made company formation online even easier.”

Having robust cash-flow management is one of the most important aspects of any successful business. Indeed, it has been widely established that taking the time to develop an effective system and implementing it from the point of company formation, is one of the best ways of ensuring your company survives the recession.
Last year, the government highlighted the importance of cash-flow management in its ‘Prompt Payment Code’ – one of many initiatives structured to help small businesses and recently formed companies during the recession. However, a report out today has revealed that, despite Lord Mandleson’s pledge to pay all small businesses working for the government within a ten day time frame, the business secretary has failed to honour that commitment.

Indeed, according to the report, over 90% of all the small business owners surveyed have not been paid within the specified period and over 50% have been waiting for over six weeks or payment.

Sam Turner, owner of IT company MVNO comments; “Historically the public sector has always had a better reputation than the private sector, when it comes to paying on time. However, as the report highlights, this has changed. Cash-flow is absolutely crucial to most small businesses – a fact that the government has reiterated time and time again. The fact that it is not paying its suppliers on time offers a poor example to the private sector and sets the tone for the way in which business operates as a whole in the UK.”

As we have commented on a number of occasions on this blog, adversity is the mother of innovation and – so far – with the increase in company formation figures and the number of entrepreneurs in the UK, it seems we have been proved right. However, a report published today by finance company Right Start, the number of entrepreneurs who have given up their aspirations to run the ideal company in favour of making a profit , has increase exponentially since the recession began.

According to the research, before the recession struck, the number of existing entrepreneurs who harboured aspirations to run their ‘dream’ business was on the increase, yet now, this figure has almost halved.
While many entrepreneurs stated that their dream company simply would not make enough money, others said that the lack of finance available is one of the main reasons they have given up their aspirations; instead they prefer to concentrate on their existing businesses.
Adam Harvard, enterprise director at Right Start comments; “Many entrepreneurs start the company formation process because they want the flexibility of working for themselves. If they get to run a company in a sector they are passionate about and interested in, then that is a bonus.”

For most small businesses and recent company formations, the increase in revenue over the festive period allows their companies to remain buoyant for the rest of the year. This year business owners waited and waited for the flurry of sales that never came according to a report by ONS.

The report found that the retail sector was the most badly effected, with many businesses experiencing sales levels worse than in 2008. Yet the sector which continues to report growth is online. This fact has prompts the question; is offline retail suffering due to broader economic factors or is shopping on the high street simply becoming obsolete due to the rising popularity of online shopping? We speak to consumer behavior expert, Mike Byrne:
“The rise in online spending has had an undoubted impact on the high street. Many consumers feel that they get a better deal online and that the process is much easier and more convenient than going on the high street. While I wouldn’t say the online shopping has replaced the high street, I would definitely suggest that those offline retailers who don’t have an online presence should definitely plan to establish on in 2010.”

From the moment Gordon Brown came into office, he has been under increasing pressure to announce the date of the next general election, not only from the opposition, but also from within his own party and the media in general. Therefore, regardless of whether a general election is called at the beginning of 2010 or – as anticipated – at the beginning of summer, it is likely to cause many contentious debates among the SME sector. Here, we ask those who have formed a company during the recession, a couple of questions about the current administration and what the future holds for enterprise in 2010.
 What do you think about the rise in company formation figures in 2009?
Sian Williams, director of, Mama and Baby
“I think the rise in the number of people looking to form their own companies can only be a positive thing. However, I do think that shows such as Dragon’s Den , have made budding entrepreneurs think that making a success of a business is relatively simple and as all those who are self-employed will tell you, this is simply not the case.”
Where do you think the current government has been least successful in its enterprise policies?
Jeremy May, founder of consultancy firm May Consultants.
“ The obvious area where I fell Labour has failed is in their plans to increase National Insurance in 2011. I can’t understand why any administration would plan to dissuade business owners from employing new staff right at the moment the country is coming out of recession.”

The cost of setting up a UK Private Limited Company is becoming as muddy as a Glastonbury field in June. It really shouldn’t be. It’s easy:

£20 if you are applying with the paper forms. £15 if you are applying online (if you have the required software to do so). That is it.

If you decide to form your company online with a Company Formation agent check what you are getting for your money.  An emailed copy of your Memorandum and Articles of Association (already drawn up) and an emailed copy of your Certificate of Incorporation should come as standard.

Remember, the Formation Agent’s are being charged £15 per incorporation. Are they including this £15 in the initial quote or is it being added on top at the checkout stage as a hidden cost?

For the basic online company formation you should be paying no more than £25, anymore than this and you should look elsewhere.

As the UK’s leading company formation agent, we are right on the front line of the UK’s SME sector. Many of the entrepreneurs, who form their companies with us, tell us what they think could help them run their businesses more efficiently and profitably and the overriding compliant most of them, raise is to do with the unnecessary bureaucracy they face daily as they try and operate a business in the current environment.

However, a recent report claims that UK business has saved over £3 millions as a result of government strategies implemented to cut bureaucracy and yet from the feedback we have received most small business owners feel that more needs to be done.
Christopher Turner, founder of the Forum for Small Business comments; “ While the government have made steps to cut the bureaucratic red tape involved in operating a company, our members still feel that they are directing a huge amount of resource into unnecessary form filling and administration. Hopefully this report will highlight the situation to the government and they will take more steps in the future to make the actual process of forming a company and running a business less bureaucratic.”

Fantasy Football has taken over our nation’s offices. Ours, like many others is awash with talk of transfers, injuries and captains. Friday afternoons are dedicated to picking the perfect team, Monday mornings are all about picking apart the carcass that is your teams performance. Yes, we spend far too much time dedicated to it but is it all just a waste of time or can some serious lessons be learnt from all this online tinkering?

How about using your tried and tested fantasy football techniques but in the business world? In essence playing fantasy football is all about forecasting. While there will always be tales of fluke there is no doubt that those who put the most effort into their team will reap the rewards come May.

Now in a business sense this is obviously true. Business forecasting involves a number of different theories and tools all aimed at giving you and your business the optimal insight into your business’ future. Similar avenues are used when picking your ideal team.

It is generally perceived that most business forecasting models involve both qualitative and quantitative methods. Qualitative is all about opinions and judgements. These are the foundations of Football. The Spurs fan may rave about Lennon being the best English right-winger in the premiership but the Arsenal fan naturally thinks Walcott is a far better choice to fill Becks’ boots. As adamant as both may be, these opinions are both valid (although in this case the Spurs fan is right). Mates down the pub, fans in the terrace or panellists on the TV can all offer valuable insight.

So would you ask your work colleague their opinions on a new business venture? Maybe not as readily as you would ask them about football but the more opinions gathered, the better your judgement.

For further depth you then look into the quantitative. Statistics are vital to find different trends and variations, be it cyclical or random. The definitive look at what has come before and the certainties that lie ahead. Who do you pick to play upfront? Well the top scorer would be a good bet as he has scored more goals than anyone else. But who is his team playing? Are they at home or away? These are questions that have answers.

In business this is the obvious source. Business is so stat based it simply can’t be ignored.

Be it banter or hard statistics all this information is useless if you do nothing with it. The skill is in using your research and implementing it. Whether you use it to make your first million or pick the ultimate fantasy football team is up to you.