Challenges facing businesses have seemingly gone from bad to worse in recent years.
After a global pandemic and lockdowns, businesses faced shortages of HGV drivers and other staff following Brexit.
Then came Russia’s attack on its neighbour Ukraine, which launched a significant spike in energy costs and more shortages of raw materials.
Political turmoil closer to home also did much to worsen a cost-of-living crisis affecting businesses and their customers alike.
This year businesses expect the challenge of rising costs will persist. Added to this are concerns that government interventions such as rates reliefs and energy bills reliefs will come to an end come springtime.
Small businesses continue to need support
Former oil and gas worker Steve Bruce, 50, set up his pet shop Pawz Pet Supplies a few years ago at the height of the Covid pandemic.
In 2022 he invested in taking up shop premises in in Westhill Shopping Centre.
He said: “Soaring costs are one of our biggest challenges.
“With the rise in costs, inflation climbing and supply chains in disarray it has lead the way for ecommerce to take a bigger piece of the retail pie.
“Coupled with the energy bill relief scheme due to end on 31st March, this is likely to add further pressure to already struggling business.
“Lack of support for the small business sector has always had an effect, funding, mentoring, document support.
“The government should look at effective social and financial support groups targeting the small businesses to their specific needs to bring back the people to the doors.
“A recent study of 600 business owners found that one in five would describe their mental wellbeing as ‘bad’ or ‘very bad’.
“Being a sufferer of chronic pain I feel bringing the people back to the local shops will increase not only their interaction and wellbeing but increase the amount of small business starts.”
Diversity crucial for energy transition
Tom Murdoch managing director of hydraulic, lifting and mechanical equipment and services provider Brimmond is feeling confident.
The 30-year-old took over the top role at the Kintore-based business which had been established by his late father Alistair in 1996.
Business in the firm’s core industry, offshore oil and gas, has been brisk on the back of high prices in 2022, but the firm is still focused on diversifying into the burgeoning renewables industry on the horizon.
He said: “This year has been an important one for Brimmond – we started off strong securing UK distributorships with KAMAT and Heila Marine Cranes and, significantly, we integrated the divisions of the business creating a stronger organisation, more capable of achieving growth in domestic and international markets as demand for our services continues to increase.
“As we look to next year, Brimmond is on track to beat this year’s £6 million turnover by around 10% with an exciting pipeline of projects and contracts in various sectors.
“Diversification is critical as the industry adapts to navigate the energy transition. We’re actively targeting opportunities for sustainable growth in other sectors and pleased to be increasing both our presence and product offering in emerging low-carbon markets.
“We’ve also invested over £1million into our rental fleet, marine crane stock and a dedicated fabrication extension to increase capacity.
“It’s looking as though next year is going to be a very busy, yet hugely rewarding, year.”
Top five wishes
Jim Reid, 53, owner of Kintore-based Jim Reid Vehicle Sales established the business in 2002 and has enlisted his family to work there in recent years including his son Liam and daughter Laura.
He said the changes in the industry has been a challenge but one the company has grasped.
He said: “During the last 20 years I have seen some massive changes in our industry mainly with the growth of the internet and the dawn of online car sales.
“Although I agree that there is a place for a complete online purchase journey I also believe that delivering an unforgettable customer experience is here to stay.”
His top five wish list for next year :
· Improved vehicle stock supply
· Finance interest rates to stop increasing
· Increased investment in the Public Electric Vehicle Charging infrastructure
· More desire and ability to stop online fraud
· Help educate the motoring public that they should base their buying and servicing decisions on ‘value’ not just who is cheapest.
“Our goal has always been to support the local community and we feel that this has never been more significant that it is now. It allows us to reinvest in your local circular economy and community.
“On a personal note, my wife Gail and I are very much looking forward to the growth of our own wee family, watch this space.”
The Federation of Small Businesses (FSB) in Scotland said businesses thrive through “tenacity and determination” but they would need support in 2023.
Bonfire of the regulations
FSB’s Scotland policy chair Andrew McRae welcomed the Scottish Government’s decision not to increase the poundage on business rates, but noted the system of taxation was still a lottery for many.
The small business group set out a range of demands including a review of proposed reforms to the small business bonus scheme and the impact of further business regulation, including the implementation of low emission zones and the rollout of the deposit return scheme.
Aberdeen’s controversial low emission zone came into force in May but it is not expected motorists will have to pay fines until 2024.
The deposit return scheme comes into force across Scotland in August, which will see all drinks containers – aluminum, plastic and glass – have a 20p deposit added to their price to encourage recycling.
READ: Business rates: Why do we have them, who pays and how are they calculated?
McRae said: “2022 has perhaps not been the year many of us were expecting. After two years of pandemic restrictions, lockdowns have given way to price hikes and a full-blown cost-of-doing business crisis.
“Having made it through such a challenging year, our thoughts naturally turn to what lies ahead. Business owners will need to dig deep in what will undoubtedly be a tough 2023.
“But their tenacity and determination to continue overcome the obstacles in their way – and ultimately trade us out of recession – can’t be underestimated. But they can’t do it alone.”
Business rates bugbear
He said: “One key issue premises-based businesses will need to address will be upcoming changes to business rates.
“When the latest revaluation was published in November, some traders will have been pleasantly surprised to see their rateable value fall, leading to a lower bill. For many others, however, an increase in the rateable value will leave them with yet another more expensive bill.
“We were relieved to see the poundage rate will be frozen and that there will be some transitional relief for those whose bills are set to rise.
“But we remain concerned at the lack of targeted reliefs for those sectors hardest hit by the pandemic and spiralling energy costs.
“And we need to look very closely at the proposed reforms to the small business bonus scheme, where some will lose their full relief.
“It is imperative that the scheme can continue to operate in the way it was designed – to ensure that the smallest traders are the ones who are protected from unaffordable rates bills.
“We also need to take a fresh look at business regulation. As a first step, we need to pause all new and forthcoming regulations that would impact adversely on small firms – at least until we’re out of recession.
“Beyond that, though, we’ll be looking to the Scottish Government’s new regulation taskforce to tackle some of systemic issues about how regulations are made and implemented.
“More than a year after COP 26 took place in Glasgow, small businesses continue to work towards reaching net zero targets wherever they can.
“With the implementation of low emission zones in many of our cities and the rollout of the deposit return scheme, we will need to see support given to smaller operators to ensure they can tailor their operations to comply with energy efficiency and other environmental measures.”
Conversation