Small business campaigners are calling for the introduction of a new ‘Help to Grow’ style programme to help the nation’s 4m sole traders recover, as signs point to a two-tier recovery.
Small Business Britain, the leading champion of UK small businesses, believes targeted interventions to support sole traders is urgently needed, as new evidence suggests many have fallen behind other-sized businesses during the pandemic, particularly in terms of digital business skills.
Lloyds Bank’s seventh ‘Business Digital Index’ shows that a fifth of sole traders (22%) still have low digital capability which is having an impact on their productivity and profitability, showing that there is still more to be done.
With sole traders accounting for around two thirds of UK businesses, the study found that bridging the ‘digital divide’ for this group has the potential to unlock £24 billion for the UK economy every year, or an estimated additional £23,000 for each solo business that super-charges its digital capability.
Yet over three quarters (76%) of ‘one-person-band’ business owners do not plan to invest in technology at all, 44% say they don’t feel confident using digital to grow and 51% say they don’t have the funding to digitise their business.
“This data shows a concerning twin-track recovery amongst small businesses, which has its roots in the unique set of challenges people running a business alone face to grow,” said Michelle Ovens CBE, founder of Small Business Britain.
“During the pandemic we saw a phenomenal digital shift, and almost two-thirds (64%) of small businesses now have the highest level of digital capability according to this new research.
"While many sole traders were among those making progress, a lot also ended up further behind and we urgently need to support these types of businesses to make that leap and fulfil their potential. Doing so is key to the UK’s recovery and future growth.”
Small Business Britain is calling for a Help To Grow style scheme for sole traders, recognising the individual needs and requirements of this group of businesses.
Whilst Help to Grow Management continues to have strong feedback from participating firms with five or more employees, a programme more tailored to the ‘one-person-bands’ is needed to unlock the huge potential in the very smallest firms.
“Sole traders struggle to take time out of running their businesses, due to a lack of time and resource,” said Ovens.
“And being at an earlier stage of growth, their route to scale will require different digital skills and tools, compared to other-sized businesses who have got to the point of taking on staff or outsourcing, or can finance more sophisticated technology.”
“A Help To Grow for sole traders, which is delivered flexibly and digitally and deals with these unique challenges, could unlock massive growth opportunity for Great Britain.
"Small Business Britain is calling on the private and public sector to make this happen and drive economic recovery from the grass roots of business up.”
Small Business Britain is the UK’s leading champion of small businesses, supporting all 5.8 million small businesses in the UK – no matter their location, their sector, or their ambition level. Through a series of reports, events and campaigns, Small Business Britain champions, inspires and accelerates small businesses in the UK to foster growth and increased confidence.
