Pernille Bruun-Jensen is responsible for overseeing Intuit’s strategic direction in the UK, in addition to leading the small business team. She works with Intuit’s small business customers to understand the challenges they face and how Intuit products can best address those issues. Pernille is also responsible for identifying and developing initiatives across the small business team, particularly focusing on the online environment. We spoke to Pernille to get a better understanding of financial issues facing small businesses based in the UK.
Tell us about your job role within Intuit.
My role involves working closely with UK small businesses to understand what their biggest concerns and challenges are, and what steps need to be taken in order to help them to achieve their full potential. For example, we recently launched a new version of our QuickBooks software that we designed based on UK small businesses feedback and requirements. I am also responsible for developing initiatives to better support small business owners through advice and resources, including our Small Business Britain campaign and our partnership with Smarta. Key to our success is working with a motivated team in an engaging environment, which this year led to Intuit being awarded the #3 Best Small UK Workplace Award. I am a strong believer that you can’t deliver great customer service without a great team and this award is testament to that.
What are the current challenges and issues most prevalent to small businesses?
Cashflow is the number one challenge that small business owners always refer to. Even the most passionate or innovative startups and small companies can fail, simply due to a lack of readily available cash. It is the oxygen for any business and so the saying ‘cash is king’ rings especially true for small business owners. Most people don’t start a business dreaming of bookkeeping and accounts, yet one of the best practices a business owner can implement to help further their ambitions is maintaining a healthy cash flow. There are no guarantees for success but cash flow management can help unlock capital, transform bottom lines and safeguard a business’ future.
Has the recent Budget had an impact on small businesses?
The budget has had a significant impact on small businesses. George Osborne has publicly pledged support for the private sector and the emergency budget saw taxes being reduced and red tape lifted to further encourage economic growth. One of the most important announcements from a small business perspective was the VAT increase to 20% from 4th January 2011. We know from the two recent VAT changes that these adjustments can present a significant administration headache for small businesses, forcing them to take focus off running their business while they tend to government taxes and administrative tasks.
Another very important change was the reduction of Corporation Tax by 1% to 27% next year, and by a further 1% annually for the next three years, taking it down to 24%. That was certainly an encouraging sign that the new coalition Government is committed to supporting small businesses in Britain. Our research into UK small businesses showed that almost one third named Corporation Tax as a key concern, so it was fantastic to see the Government listening to the millions of men and women in the UK who run the nation’s small businesses and are responsible for about half of the Britain’s national turnover.
How is the change in VAT in January 2011 going to affect small businesses?
At a time when small businesses have had to endure months of uncertainty and pressures caused by the recession, the new rate of VAT will add a further challenge, especially in terms of the administrative burden associated with the change. However, if small business owners take a proactive approach and start planning ahead, they could turn the change into an opportunity to increase sales before the end of the year. You can also refer to our ‘Small Business Matters’ blog for practical advice on how to manage the VAT change.
Do you have any financial tips for surviving in a recession?
Absolutely, there are some common pitfalls that small businesses often encounter but they can be avoided by following some key financial top tips. Firstly, it’s crucial to know exactly where your money is going. Small business owners need to keep track of how much they are spending and for what, along with tracking VAT and making accurate returns. It is important to keep on top of bookkeeping right from the start otherwise there is a risk of forgetting crucial costs or, even worse, failing to invoice a customer who should be paying you!
Secondly, don’t be afraid to negotiate to get the best payment terms. Banks, suppliers and customers should be checked regularly to be fully aware of all payment dates and their terms. Investigate if there is anything that could be modified to help maintain a healthy cash flow, such as moving key dates and adjusting payment terms.
Lastly, it sounds so simple, but it’s surprising how many people don’t make sure they get paid. Ensuring customers pay on time or asking them to do it sooner, can dramatically improve everyday cash flow. Printing the payment terms on easy-to-understand invoices that go out on time can also help prompt debtors to pay as will the clear setting out of penalties if a payment is late. Discounts for prompt payment can also be an incentive.
Are banks on our side, or are they trying their best to destroy all small businesses?
There is a general feeling among small businesses that the UK banking industry could be a lot more helpful and supportive. According to our research, the key policies that UK small businesses would like banks to change are firstly to offer better rates for small businesses, to give a commitment to pass on Bank of England interest rate cuts, to put a cap on overdraft and loan fees, and lastly to implement more limited use of personal guarantees.
In addition, small businesses told us that they would like more dedicated customer support from the UK banking industry. Whether in-branch or through a contact centre, the banks need to understand that small businesses cannot be treated in the same way as ordinary retail customers. Not only should the customer service have to be more personal, but the small business customer needs to be able to understand what support their bank is prepared to give.
Could the Government be doing more to help small businesses?
The UK Government must recognise that as the employer of 13.7 million people in the UK, the 4.7 million small businesses that constitute Small Business Britain are a key part of the UK economy and small incentives and benefits could lead to massive improvements in the wealth and prosperity of the nation. Listening to the challenges that small business owners are facing, and working to develop the right programmes and policies that will allow them to grow and succeed will be mutually beneficial for both individual businesses and the UK economy as a whole.
How is Intuit supporting small businesses? Tell us more about your Smallbusinessbritain initiative.
Intuit supports small businesses directly through our products but also by providing support and advice to small businesses around the UK. Our blog Small Business Matters, includes advice and resources for small business owners, as well as expert comment on current issues. We have also partnered with www.Smarta.com, which aims to provide a platform for business owners to connect and learn from each other.
In February 2010, we launched Small Business Britain. Inspired by the challenges and obstacles that small businesses were facing in the run up to the general election, we wanted to give these businesses a voice and a channel through which to share experiences and build success together. The website includes profiles of small business owners, an online community and discussion forums where entrepreneurs can talk about current issues or challenges, and free online tools to help businesses start up and grow.
Recently, we’ve added our Charity Challenge competition to the site, where UK charities can nominate themselves to win £500 and a QuickBooks Pro package worth almost £500. We’re constantly working on developing and improving the site throughout the year, so if you’ve got any suggestions, please feel free to add them to the site!
Intuit has just released a new version of QuickBooks (read our review here), but what’s next in store for the company?
We’re planning to continue supporting UK small businesses’ needs by providing resources and advice that help them to fulfil their potential, not only through our own initiatives but also through our exciting partners. We are committed to developing the simplest, most effective business software available, and we’ve got some exciting developments in the pipeline for the UK, so watch this space for updates!