More support urged for micro business in Scotland

The small business lobby group wants more tailored support for micro businesses to boost job creation

Scotland's smallest businesses could make a "serious dent" in the national jobless figures if given tailored support, a new report has suggested.

Micro businesses, which have fewer than 10 employees, make up nearly 94% of all businesses in Scotland.

But the Federation of Small Businesses (FSB) said there was strong evidence they were not recruiting as many people as they could.

It called for better support, including practical help with taking a worker on.

The small business lobby group argued many of the current national job creation schemes did "not work well" for micro businesses.

Its Micros Untapped report suggested bosses could be put off recruiting by the perceived risks of hiring a new employee, as well as practical obstacles associated with it.

The report urged the Scottish government to create a support fund which could "provide a sustained source of HR support for micro-businesses who are planning to recruit".

'Unleash potential'

According to the FSB, Scotland has 321,000 micro businesses which together provide 27% of all private sector jobs.

FSB Scottish policy convener Andy Willox said: "The potential and sheer number of micro businesses in Scotland means that better support to help them unleash their potential could make a serious dent in the unemployment figures.

"When a very small business expands its workforce by one or two, the character of the business changes in a way that a large organisation doesn't and government support should reflect this.

"The sort of practical help we're suggesting includes putting together an appropriate job description, advertising, advising people of the legal and regulatory issues associated with employment.

"However, this help should dovetail with support to help with growing the entire business."

The FSB report argued any support service "must ensure that it is listening to and fully understanding micro business requirements and responding to these rather than being driven by the need to place unemployed clients into work".

The report was conducted during the summer and autumn of 2012 in conjunction with economic consultancy Rocket Science.

It examined the experience of more than 650 of Scotland's smallest employers and included input from Scottish focus groups.

'Bedrock of economy'

The Scottish government said it was using all its "resources and powers" to support business and economic growth by measures such as boosting capital investment, improving access to finance and encouraging new private-sector investment.

A spokeswoman commented: "Scotland is home to a wealth of ambitious companies, and small and medium enterprises are the bedrock of our economy - accounting for around 99% of enterprises and 54% of private sector jobs - and establishing a diverse base is vital to making our economy more resilient.

"We are working to maintain Scotland's position as the most supportive business environment in the UK through actions such as the Small Business Bonus Scheme and other reliefs, which provides zero or reduced business rates for 63% of retail premises in Scotland.

"The new contracts for Business Gateways awarded earlier this month will ensure that there is a tailored service for small companies in every local authority area in Scotland."