Technology grants and export vouchers among ideas to boost small businesses sent to business secretary

Enterprise Nation founder Emma Jones is among the signatories of a letter (see below for the full text) sent to business secretary Kemi Badenoch with recommendations for supporting small businesses.

Part of Mastercard’s Get Britain Growing policy programme, the ideas are:

• grants for entrepreneurs to invest in technology to help them scale their business.

• £1,000 voucher or equivalent tax deduction to assist small firms with exporting.

• improving data on ethnic minority business owners to support the growth of ethnic minority-led businesses

• increasing the childcare allowance to help business owners manage their parental responsibilities alongside their business.

• female-focused start-up funding to help plug the gender gap when it comes to entrepreneurs' access to finance.

• government should champion digital payment technology as a way of dealing with the challenges of late payment.

Released to coincide with the letter is a new paper which looks at how to use digital payments technologies and innovations to grow the economy.

Writing in the foreward, Kelly Devine president, Mastercard, UK and Ireland, said:

"Nowhere are the challenges of getting the economy growing more evident than in the barriers faced by micro and small businesses. These businesses alongside grappling with new and unexpected challenges, continue to face traditional problems including liquidity, late payments, access to finance and, in many cases, a lack of the right knowledge or skills to make the most of the burgeoning digital economy.

"Digital payments technologies offer many benefits. If you’re a small business that opens an online shop, you have access to more markets and customers around the world. Technology, like digital invoicing, helps improve cashflow and cut slow, paper-based processes.

"Mastercard research found that almost half (45%) of business owners in the U.K. believe that technology is helping keep their business afloat and nearly three quarters of businesses who started during the pandemic told us they wouldn’t exist today without technology.

"The UK's small and micro businesses will miss out on an estimated £827 billion growth opportunity over the next three years if they are not supported to digitise."

Also writing in the paper is Charlotte Thomason, Enterprise Nation's head of policy. In a piece focused on female entrepreneurs she said:

"With the myriad of technical solutions available, it can be difficult for entrepreneurs to know which to invest in and how they can be best utilised. Similarly, when searching for funding, female-led businesses are presented with several options, business loans, grants, competitions — the list goes on.

"What technology and funding have in common is that not enough is targeted at getting the right support to women at the right stage of their business journey.

"To achieve this, we need increased private public partnership, with government openly backing the work of the private sector to address barriers faced by female entrepreneurship.

"Our collaboration with Mastercard on the Make a Plan tool is a way for entrepreneurs to access free, tailored support recommendations which are surfaced through an individual and personalised dashboard. It can support women getting the right advice on funding, by utilising technology and data at its heart.

"Digital tools like Make a Plan are continuously increasing their reach, particularly with women and ethnic minority founders, to provide them with relevant, tailored support, and we’re just getting started."

The full letter sent to Kemi Badenoch

Dear secretary of state,

Back small businesses to get Britain growing

Entrepreneurs and small businesses are crucial to the country’s ambitions for growth and job creation, employing two-thirds of the working population and generating £2.1 trillion in turnover in 2022.

But small businesses are facing an incredibly tough economic backdrop, and it’s clear that the biggest challenge facing the country right now is how we boost growth and productivity, and create long-term, sustainable prosperity.

To be clear: this is not a job for government to solve alone. Partnerships with industry, communities, business organisations and policymakers are essential to ensuring small and micro business owners can reach their potential, and the economy can reap the benefits.

That’s why, as part of Mastercard’s Get Britain Growing policy programme, we’ve joined forces to make recommendations that will help small businesses thrive and boost growth. These policies will particularly help long-underserved groups, like female and ethnic minority founders.

Policymakers must be bold when it comes to small businesses, which are the backbone of our economy.

We urge you to consider our recommendations, which include:

1. Grants for businesses to invest in technology

Nearly a quarter (23%) of small business owners told us that grants or subsidies would help them to grow their business. It’s important to link financial incentives to personalised support programmes, so that businesses can build their digital skills at the same time as improving productivity and investing in their future growth.

2. £1,000 exploration voucher or equivalent tax deduction to help small businesses export

British businesses are creating a wealth of products and services that we should export internationally. However, just 10% of SMEs export goods outside the UK. This would help small businesses start exporting, with support from the Department for Business and Trade.

3. Government-backed female-focused start-up loans

The Rose Review found that £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as men. This type of support would help more female founders to grow their business, while helping plug the finance gap faced by women when looking to start a business.

4. Improving childcare provisions

Around two-thirds (64%) of SME owners have children. While recent announcements of childcare support are welcome, many still face barriers to work due to the exorbitant cost. Increasing the allowance to £3,000 would help significantly in overcoming these barriers.

5. Improving data on ethnic minority business owners

You can’t improve what you don’t measure, so the government should introduce a national system of ethnicity data collection about entrepreneurs. For example, Companies House could add an ethnicity field to the annual registration process and include additional questions as part of the Management and Expectations Survey.

6. Help tackle late payments

The government can lead by example in tackling late payments to small businesses by championing digital payments, like e-invoicing and procurement cards. This will speed up payment times, freeing up cashflow for small suppliers.

Please find enclosed a copy of our latest Get Britain Growing paper.

We would be happy to share more information on these recommendations, meet to discuss them or introduce you to small businesses in our collective networks to share their experiences.

• Kelly Devine, president, UK&I, Mastercard

• Emma Jones CBE, founder, Enterprise Nation

• Karen Licurse, managing director, Digital Boost

• Anthony Impey MBE, CEO, Be the Business

• Carlo Gualandri, founder and CEO, Soldo '

• Andrew Goodacre, CEO, British Independent Retailers Association

• Oliver Prill, CEO, Tide