Confidence knock? How the election is hitting businesses
HOW CONFIDENT do high-growth companies feel about the coming year? For The Leap 100, the future looks bright. A whopping 98 per cent were either optimistic or very optimistic about their business’s prospects over the next 12 months, and 83 per cent expect the state of the economy to improve or greatly improve. Significantly, however, only two thirds expect the state of the economy to have an impact on their business. Considerably more were preoccupied with politics: the uncertainty around the impending General Election, the possibility of an EU referendum, and how the next government will approach the economy.
With nearly 20 per cent of respondents commenting on the election, Paymentsense founder George Karibian summed up the general sentiment of The Leap 100: “The outcome of the election and the policies that follow could affect our customers (SMEs), us (entrepreneurs) and consequently our employees. Hopefully, regardless of the outcome of the election, fast-growth entrepreneurial companies will be left alone to get on with their business as usual.” Stuart Conroy, founder of Activ8, highlights how centralised politics has become in the UK, saying he would trust a Tory coalition over a Labour one when it comes to supporting business growth. Peter Bowles, founder of Original BTC Group, went further: “anything other than a Conservative majority will be a disaster for the economy”.
Lloyd Price, co-founder of Zesty, echoes a few others in saying that SMEs are following a “holding pattern” until the election is over. They’re “waiting to see who wins and then who will be big business friendly and who will be small business friendly.” Several respondents said that, given tax schemes like the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme, there’s never been a better time to set up a business – though Ruzbeh Bacha of CityFalcon pointed out that the lack of clarity over EIS and Entrepreneurs’ Relief is leading to “uncertainty over future investment prospects.”
Further afield, in addition to concern over the prospect of an EU referendum, a weak euro was highlighted by one in 10 respondents as problematic. “As an exporter, the euro weakness could impact our pricing in local markets. To date, we have managed to offset currency, but any further weakening will make it difficult even where we deal in sterling. Ultimately, the euro situation hits somewhere in every value chain,” says Giles Brook, founding partner of Bear Nibbles. On the other hand, for foreign exchange specialist World First, currency movements can be good for business: “recent volatility increases the number of clients who want to protect themselves against exchange rate movements, so these events can be good for us”.
The most confident Leap 100 firms were those in the fintech sector. All were upbeat about the government’s and regulators’ positive approach to market entrants. And P2P lenders RateSetter and Funding Circle lauded the inclusion of P2P loans in the Isa wrapper, and the possibility of a Lending Isa.
TOP RESPONSES
Falling fuel prices have helped us to invest in expanding our fleet, and keep prices low for collection and delivery to businesses across London. Steve Folwell managing director LoveSpace
The continued spread of internet censorship, as well as reports into privacy breaches, has continued to drive demand for our products. Danvers Baillieu chief operating officer Privax
LEAP COMPANY SPOTLIGHT
Money Dashboard
At a time of accelerated change for UK financial services, hi-tech businesses are emerging – with consumer rather than product-centric models. Money Dashboard is one of those firms, and it has a simple mission: to help consumers to be good with money. With around 100,000 users and growing fast, its platform – which is free for consumers – is evolving a new system of independent, personalised financial coaching. The service, available on desktop, tablet and as a mobile app, links automatically to the user’s online bank account and credit card portals, and sorts the information into easily understood categories, showing you easily where your money goes, how to budget, and suggestions on where to make savings. Speaking on what the evolving industry can offer the consumer, founder and chief executive of Money Dashboard Gavin Littlejohn says, “In the absence of regulated financial advice for everyone other than the wealthy, people are going to have to take control of their financial decisions by using technology to help them.”