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Do small businesses hurt more than they help?

Do small businesses hurt more than they help?
Aug 17, 2017 Shaking Hands 0 comments
This post was first published by The Croydon Citizen on 16/08/2017.

Do small businesses hurt more than they help?

In his continuing multi part series, Sean Creighton explores the state of SMEs in Croydon and whether they help or hurt the community.

A serious weakness in the Small Business Commission’s interim report is the absence of discussion on the ethics and legality of some SMEs, and whether SMEs are meeting residents’ needs. These issues are particularly prevalent within the retail shopping, restaurant and private rented sectors.

The failings of small business

Every so often, the council publicises the action it takes against food shops, cafés and restaurants which infringe on the legal requirements of health and hygiene. Earlier this year a restaurant in Norbury was closed after it was heavily fined for employing illegal workers. The public needs to be sure that SME businesses are operating properly and not risking employees’ health or acting illegally. If the commission’s final report is to be accepted as a balanced assessment of the SME sector then it needs to address these issues. It can do so by asking questions such as the following:

  • How many small businesses are failing to comply with legal requirements such as those on waste refuse contracts, food hygiene, fly-tipping and minimum wage?
  • How many hygiene inspectors were there in 2006, 2010, 2014 and today?
  • How many cafés, restaurants and take-aways were found by inspectors to be a minus, zero and one rating in 2006, 2010, 2014?
  • How many small businesses have been found in breach of minimum wage, illegal labour and working conditions requirements, and what action was taken against them?
  • How many small businesses have been found selling out of date food items?
  • What action is the council taking to shut down cafés which allow illegal smoking, such as shisha, inside their premises?
  • How many people who are associated with small businesses have been found guilty of fraud in each of the last ten years?
  • How many private landlords and lettings agencies have been prosecuted for a breach of legal requirements in each of the last ten years?
  • What action is being taken to identify car dealers who leave cars for sale on side streets without a sales notice on them depriving residents of parking spaces?

Sustainability and economic pressures

Another major issue to consider is whether there are too many small businesses that struggle to survive. Are there too many retail food shops competing with each other, each having a low income base? While the commission recognises the economic pressure on SMEs due to the rise in business rates this year, it does not attempt to assess how many small businesses are likely to close or be forced to raise prices, thereby losing them customers resulting in closure later on. Another pressure is the extent to which commercial landlords are pricing out small businesses, especially the type local people want and need on their high streets.

District centres

The commission recognises the importance of SMEs in district centres. It concentrates on the problems of consumers not knowing what is available and the restrictions on car parking. It wants better promotion, improved wayfinding, parking signage and an online business directory to encourage residents to buy localThe commission suggested that visitors could pay for an additional hour of parking on top of the already available one hour free parking within the relevant district centres.

Such measures can be seen along the West Croydon stretch of London Road and are beginning to be implemented in Thornton Heath. Public perception of the state of business and the local economy is based on the turnover of businesses in the high streets and the length of time shop premises remain empty. These factors make the district centres look run down and prevent new businesses from setting up. The perception is also based on whether businesses offers what residents and local workers want.

Residents’ needs and wishes

We need to ask what type of small businesses residents want in their district, local and town centres.

  • What are people’s views about the range of the retail offerings in the district and town centres?
  • What did residents find attractive about shopping in the town centre before the closure of Allders?
  • Why do so many residents seem to find that Croydon town centre does not offer them what they want?

The commission does not explore these matters or the public’s concerns about the growing number of take-aways and betting shops. The purchase of public houses, their closure and re-development are also not explored.

Hopefully the commission will review such issues in its final report.