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In praise of the Federation of Small Businesses

In praise of the Federation of Small Businesses

August 17, 2012 by Mike Southon

In praise of the Federation of Small Businesses/FSB'S logoWhen historians reflect on twentieth century British entrepreneurship, certain names will be writ large, including Branson, Dyson and Dunstone. Let us hope that there is also room for at least a modest footnote on Norman Small.

A dapper former military man very reminiscent of Captain Mainwaring, Small later earned his living as a sales representative calling on the retail trade. In five years he met with over 10,000 people, who back in 1974 found themselves facing the introduction of Class 4 National Insurance, which was to be levied specifically on the self-employed.

Incensed, Small fired off a strong letter to The Manchester Guardian newspaper, putting forward an idea that "could do much to improve industrial relations by example, and give a voice and a platform to the huge moderate silent majority".

His suggestion was "the formation of a non-political, self-supporting union of the hundreds and thousands of self employed people in the United Kingdom". The Federation of Small Businesses (FSB) was formed soon afterwards.

FSB hotline

Today, the FSB is the biggest business organisation in the UK with over 213,000 members, from sole traders to fifty-person companies. One of the FSB's key roles is to lobby government, and, back in 2010, I was lucky enough to meet their then Head of Public Affairs, Stephen Alambritis, at their London offices, strategically situated in Westminster within the sound of The Division Bell. Alambritis has since gone on to become the Leader of Merton Council.

He explained some typical examples of where the FSB was able to help their members.

A publican returned at 3am from holiday to find a letter saying his lease had been terminated. He called the FSB hotline there and then, and the organisation's lawyers were up all night looking at the various options. Eventually, The FSB was able to prove to his landlord's satisfaction that the appropriate lease conditions had been met, and the matter was resolved in favour of the publican.

Another member had a run-in with the tax authorities, and sensibly called the FSB immediately on receipt of the demand. Alambritis was very proud to note that when the tax authorities realise that the FSB is involved, they automatically escalate the issue to a senior inspector. In this case, the tax authorities finally accepted a payment of £400, a considerable improvement on the £200,000 originally demanded.

Success in growing a small business is predicated on hiring the right people; when this process goes wrong it can destroy many years of hard work. Most owner-managers are very wary of employment tribunals, assuming that the court will always look favourably on the litigant, however unreasonable their behaviour, whilst working for the company. Alambritis quotes an example where the outcome for an FSB member was a £10,000 decision against their former employee who was shown to be acting maliciously.

The value of membership

These are, of course, “highlight” cases — some businesses sail through life largely untroubled by legal threats. Even so, I have spoken at several FSB events and met hundreds of members, all of whom invariably see the value in their membership. As well as an effective source of advice, protection and representation, the FSB is, at its heart, a grass roots organisation and therefore closest to the true sentiment of new, small and growing ventures. It offers community (with plenty of live events), knowledge and occasionally solace.

FSB membership is what Small might have called “a total snip”, coming in at as little as £170 per year. It's a small price to pay for considerable peace of mind; but I know that in these troubled economic times, every penny counts. I therefore always encourage new businesses to take advantage of FSB membership when they have got a little bit of cash rather than on day one; but it remains a quick win even for one-man-bands.

Entrepreneurship can be a very lonely business, and it is always good to have friends in high places. One of the first calls made by Chancellor George Osborne upon taking office was to the FSB. It was they who advised him to implement the rise in VAT on the fourth of January, not the first, which is traditionally a very busy day for our “nation of shopkeepers”, as Napoleon famously called us.

It is always a time of small celebration for small businesses when our VAT returns are done and dispatched successfully on-line to HMRC. Each quarter, I will definitely be raising a glass and toasting Norman Small.

The Federation of Small Businesses can be found at www.fsb.org.uk

Copyright ©Mike Southon 2012. All Rights Reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker. 

 

 

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