The turn of the year is a pivotal point for members of the Federation of Small Businesses (FSB) in Aberdeen and surrounding areas.
If busy entrepreneurs can afford some time away from work, it’s an opportunity to take stock and reflect on the previous 12 months.
And if they’ve been flat out over the festive season, then it’s a chance to draw breath before plunging into the year ahead.
FSB Moray, Tayside and north-east development manager Mike Duncan said 2023 was an economically challenging year for businesses and families in his area.
Smaller firms facing rising costs, persistently-high energy prices, increased regulation and staff shortages
He added: “The small business community has suffered significant setbacks and, despite the best efforts of government to mitigate the damage done by the pandemic, they are still facing rising costs, persistently-high energy prices, increased regulation and staff shortages.
“Many of these setbacks were created by the two main challenges of 2023 – the cost-of-living crisis and cost of doing business.”
Laura Ripley, of Portlethen-based Northern Frights, hosts horror, fantasy and immersive events throughout the north-east.
Cost-of-living blow to Aberdeenshire business Northern Frights
Before the cost-of-living crisis began to bite, her events were selling out up to six months in advance.
But in the past year she has found herself nervously closing ticket sales just two days prior to opening nights.
When you need this income to cover up-front venue costs, increased catering prices, and spiralling performer fees, then the stresses and strains of running your own business become clear.
Similarly, Leigh Reid, owner of Aberdeen Business Network, believes rising costs and a need to prioritise every purchase has led to business owners cutting back on attending networking events this past year.
It’s easy to classify networking as a social event and when “time is money”, social get-togethers are not an option.
However, Ms Reid argues that when costs are increasing and profit margins are shrinking, allocating time to learn essential networking skills, attending quality networking sessions and following up on any new contacts you’ve made are vital tools to help business owners attract new clients and survive the financial pressures they are under.
Sarah McBain knows all about financial pressures – 2023 was the year she launched her new business, Razorbill Web Design.
Despite an overwhelming desire to chain herself to her computer and bask in the isolation of self-employment, Ms McBain has not only attended every networking event possible but also set up her own “femme-preneurs” business network in Aberdeen.
The challenges for her during the past year have centred on building an online and in-person presence, and just getting her business out there in a bid to find new clients.
Positivity driving firms’ future plans
Mr Duncan said that, despite the different challenges they’ve faced in 2023, these three enterprising women were all positive about the year ahead.
Each of them plans to diversify their businesses and try new things.
Ms Ripley has exciting plans to host more corporate events and take her shows into the Highlands and Tayside.
And Ms Reid is looking forward to working collaboratively with others and embracing the power of social media to enhance her networking connections.
It can be difficult to remain this positive when challenges seem to be around every corner.”
Mike Duncan FSB
Meanwhile, Ms McBain wants to grow her portfolio, increase the hosting services she offers her existing clients and build her “femme-preneurs” network.
Mr Duncan said: “It can be difficult to remain this positive when challenges seem to be around every corner, like they have been for many in 2023.
“Small business owners shouldn’t feel powerless when it comes to asking the government for support, and that’s where the Federation of Small Businesses comes in.
“We listen to the concerns of our members and put those concerns directly to our politicians, and influence policy decisions in a way that can really make a difference.”
He added: “One of our most important areas of influence is on non-domestic rates, or business rates.
“Lobbying by FSB helped to introduce the Small Business Bonus Scheme, which continues to be a lifeline to small and micro businesses every year, enabling those that have business premises to claim a percentage discount on their rates bill.
“However, in 2023, the Scottish Government introduced changes to the sliding scale of rates relief that was on offer, and taken together with a revaluation of rateable properties, thresholds for qualification were raised and levels of relief reduced.
“The result was that many businesses had to pay business rates for the very first time.”
Kelly Forrest, of Forrest Training in Aberdeen, saw her business rates discount drop from 100% to 25%, which resulted in a 2023 rates bill of £5,000 for her premises on Rosemount Viaduct.
Although energy costs also went up, business rates were the most significant financial cost increase to her business.
Richard Simpson, of luxury ice-cream firm Simpsons, will also face a business rates increase but for more positive reasons.
His factory is in Buckie. Having traditionally sold his products wholesale throughout the north-east, he opened his first shop inBuckie just recently.
Energy costs have been his main concern this past year, as he runs large freezers to keep his products at the right temperature.
He’s also been hit by inflationary increases in the cost of raw materials, as well as by rises in fuel costs – resulting in expensive refrigerated transport.
High energy costs throughout 2023 have also affected Craig Donoghue.
He and his wife, Jacquie run a swimming pool in Laurencekirk. To keep their Blue Sky Swim Studio going they have to heat the water and run an adjustable current generator.
This device turns their small pool into a water-based treadmill suitable for different abilities of swimmer.
Having overcome the most recent challenges of increased business rates and high energy costs, it is testament to the resilience of those at the helm of these three small firms their outlook for 2024 remains hopeful.
Ms Forrest is looking to expand her team, diversify into the renewables sector and embrace new technology – such as VR headsets – for training purposes.
Mr Simpson is enthusiastic about a successful first spring/summer season with his new Buckie ice-cream shop and has his fingers crossed that fuel costs will come down, allowing cost-effective delivery to customers further afield.
Laurencekirk businessman’s VAT plea
And Mr Donoghue wants the UK Government to increase the VAT threshold for growing businesses in 2024.
Instead of stifling growth and limiting ambition, a higher threshol could incentivise investment and support future employment, he believes.
Mr Duncan added: “Throughout 2024, FSB will continue to make the case for our smallest businesses.
“It will be asking the Scottish Government, for example, to protect and extend small business rates relief, make a more robust analysis of the impact of proposed new regulations on small companies, give small local firms a fairer deal when bidding for public sector contracts and to use the Scottish National Investment Bank to support more women, disabled and ethnic minority entrepreneurs.
“Even with inflation beginning to fall, it looks like the cost-of-living crisis and cost-of-doing-business issues will persist well into the new year.
“The normality and stability that were on the small business wish-list at the end of 2022 are still at the top of that same list a year later.
“With a UK general-election just around the corner, that normality and stability might still be some way off.”
Conversation