Running a start-up business can be a challenge. Whether you operate as a solo-entrepreneur or a with a handful of staff, you try to use proactive approaches and innovative ways to keep your business afloat. While you can plan ahead use experience when it comes to quiet sales periods, or analyse and reduce expenditure to boost cash flow, what should you do when facing uncertainty?
As the owner of a start-up, this may be the first general election your business venture has faced. While small business owners are already concerned about the impact of Brexit, Elections can bring about a lot of change for businesses of any size and can be particularly overwhelming for smaller enterprises.
With 90% of business owners expected to vote, here are the ways the election results could affect your start-up.
If, as polls are predicting, Theresa May wins the election, small businesses can expect the following, as detailed in the Conservative’s 2017 manifesto:
- Corporation tax to be cut to 17% by 2020
- 33% of the central government’s spending will go to SMEs
- The possibility of NI, income tax and VAT rises
- A review of the rules surrounding takeovers and mergers
- A hard Brexit approach with a possibility of no deal
Meanwhile, if Jeremy Corbyn wins the ballot, the Labour manifesto has laid out the following:
- Creation of a National Investment Bank, with regional banks to reduce the funding divide between the north and south
- Reduce the tax rate for smaller businesses
- Help technology start-ups to expand through the introduction of a digital ambassador
- The scrapping of quarterly tax returns for all small businesses with an annual turnover of less than £85,000
- A ‘fairer’ Brexit deal
While both parties offer different perks for start-ups and small businesses, any general election brings about a level of uncertainty. As such, during the short-term, business owners may experience the following:
The availability of cash flow is often an issue for start-ups. If you are considering growing your enterprise, there are a number of ways to improve cash for expansion purposes, such as investing in the forex market, crowd funding, and peer-to-peer lending. But until you know how the markets and the pound react, it may be hard to put growth plans into action.
Customer confidence has already seen something of a drop with the uncertainty surrounding Brexit, and an election can add to this. This may take a few weeks to resurface post-election, but it will come back.
Changes to Tax
Both Conservatives and Labour have different plans when it comes to business tax. As such, many small business owners are concerned about what impact a change in the rate could have on their enterprise. This can make it difficult to plan ahead for the future.
Finally, around election time, social media sites are dominated by politics. As such, it can be harder to market your small business and form relationships with potential customers. Thankfully, this should subside after a couple of weeks, so you can get back to your normal business activities.