Local Authorities should look after their SMEs

This subject has been a perennial topic for this blogger because it is one about which I feel passionate and it never ceases to astound me about the ways in which local authorities interact with the SME retailers in their areas of responsibility (and this doubtless applies equally to SMEs who are not retailers).

In case there is doubt this is not a side swipe against local authorities per se, but against those who find it easier to either discount, or to ignore, the plight of their local, often locally grown, entrepreneurs in favour of others and often it seems in name of expedience. The trouble is that local authorities in the main pay too little attention to their local investors because they are very often in the earlier stages of their corporate development; unlike many of their more established counterparts they are not cash rich and therefore less able to donate to the various local schemes that in the past decade or two have been a feature of town centre management.

There are some notable exceptions; Sheffield city council for example. In this authority area the leader of the council, as I have reported previously, announced to a gathering of small businesses that he was appointing a cabinet member to look after entrepreneurs and developing businesses. He was not being philanthropic but rather pragmatic. By establishing a clear line of communciations with these local business people he and his colleagues are considerably more likely to obtain realistic feedback of the impact of their decisions on local business and have a ready made structure for consulting with that particular constituency. All too many other authorities have no such mechanism and, it might even be argued, find dealing with small businesses is an altogether tiresome and time consuming occupation - far better then to just deal with the big boys and try and tap into their resources. OK, this may seem a great plan, but what happens when those big boys start getting the jitters, or indeed simply fail. Where's the contingency plan? Do the council officers rush unceremoniously, cap in hand, around the phalanx of small businesses in the hope that they can explain why these consistently good investors in the local economy have heretofore been studiously ignored.

In the press this week there have been reports of a town in Hertfordshire where the council have sympathised with the local traders for disrupting their Christmas trade while the council put their plans to pedestrianise into effect. Sympathy notwithstanding, if they had half a wit they might have stopped to consider the impact these actions might have had on these traders and have negotiated a satisfactory compromise; it might have been easily possible to continue trading effectively in such a circumstance if the traders needs and the council's needs had been shared and solutions sought before the event.

Just today I was chatting with a trader from Bilston in the West Midlands whose business is tied into a long lease in a centre that is becoming a little jaded through age where the local authority has acquired land immediately behind the businesses to provide car parking. From what I gather at least some if not all of these adjoining businesses had always had access to the rear of their premises and at least one had signed over, perhaps foolishly, to the council their rights of way to enable some disabled bays to be constructed. The council now wish to charge for keys to the gates that now bound and bar access to the rear entrances of these businesses. Frankly it beggars belief.

The message I would give to Councils is "think this one through" - these small businesses dedicate a massive proportion of their business investment in your town; they are promoters of your town and very often the owners are council tax payers in addition to Non-domestic rates payers. Create effective mechanisms, even if you have to fund it, for communicating with SMEs.

The message to SMEs is simple: "organise" - I realise that doing so will mean that someone will need to give of their time; but it is worth the effort in the long run. Do not let your Local authority work unchallenged in making changes to your businesses, but embrace those ideas that might be really useful to you.

Discounters appear to be winning - a warning on discounts

The news in Retail Week is that the discounters in the food sector, including Lidl and Netto, may be gaining market share from Sainsbury and Tesco as a result of changing spend patterns arising from the pressure being applied to their customers purses.

Welbeck has often mentioned warnings about discounting, which needs clarification here. Discounting where it is the basis of the business plan and the supply chain is properly managed such as is the case with models such as Lidl et al is good business, and is paying off for them currently - they will always gain edge in recessionary periods - but the important thing for small retailers who are tempted to emulate these larger players is that it is the basis for their business plan and they do manage their supply chain. SME retailers can't just offer large discounts without first considering how this is to be financed and what it is trying to achieve.

The advice from Welbeck is clear - if the margins can be retained, then discount away, if not, then ensure that the period of discounting is limited and the reason for discounting is catered for in the discounting structure.

WEEE regulations

For the past couple of weeks I have been reading various reports that a significant majority of SME businesses are unable to describe what the WEEE regulations are without prompting.

Hmmm! I have to ask myself why that might be; and whereas the reports that I have read seem to suggest that this means that these smaller businesses are missing out (which of course they will be!) they also seem to imply that it may be a fault of those smaller businesses for not being fully briefed.

Given that the government itself has come to acknowledge the burden of regulation on smaller businesses - in terms of assimilation, understanding as well as execution of the requirements - it seems to me that if only 1 in 8 SMEs are aware of the WEEE rgulations, then that is the fault of those who have produced the regulations and not the SMEs. I am minded of the old adage "the teacher has not taught until the pupil has learned".

Perhaps it would help if the nation were better served by national trade bodies for concise sectors - such as I mentioned in "The Alternative View" in this very blog on 27 January. Whatever the solution, it must not be placed upon the already burdened shoulders of small business.

Camden Market

It was with real regret and sadness that I saw the news on television over this last weekend about the fire at Camden market.

What really astonished me was that, other than a comment from Boris Johnson MP (a hopeful in the upcoming Mayoral campaign in London), it was difficult to find any real comment on the disaster that must have occurred to a large number of small businesses. There was plenty of coverage of the damage to the neighbouring public house - but even with that coverage it didn't really focus on the damage to the business but merely introduced the idea that minor celebrities chose to drink there on occasions.

Camden market is iconic - it is not at all glamorous, but has stuck to its own particular marketing strategy with huge success over a large number of years. It is in an area that is not especially prosperous and brings in large numbers of people from across Greater London and way beyond to sample their special brand of market trading. What self-respecting twenty-first century hippy would not shop at Camden? This is a real example of where SME retailers make a visible difference to a locale.

Let us hope that the London Borough of Camden and the Greater London Authority, ensure that the many small businesses that are affected are supported during this period of disaster and that the market is able to begin trading again in the short term.