A 'Small Business Manifesto' for PR?
I was with hundreds of other #GS10KSB alumni yesterday for the launch of the Small Business Manifesto.
First, a word about the Goldman Sachs Programme. More than 2,000 business owners have done #10KSBUK since it launched; among them are the founders of at least five Top 150 PR agencies (that I know of). I did it in 2018. It’s an amazing programme and if you own or run a growing business, it’s a no brainer. More here.
Also on PR’s role yesterday, entrepreneurship champions Seven Hills not only PRed the event, but Michael Hayman MBE DL was the warm-up act for a line-up that included George Osborne, Ed Balls, Small Business Secretary Kevin Holinrake and his Labour counterpart Rushanara A. .
The high profile political turnout isn’t just a reflection of the pulling power of the Goldman Sachs brand. If you want to address high-growth, progressive SMEs in one place, 10KSB is where you find them.
There’s been a lot of talk about the Manifesto on LinkedIn, so rather than repeat that, I thought I’d say a few things about the creative sector, what’s in there for us and what I think an 'SME Manifesto for PR Agencies' might look like.
First...the big picture
The main theme is the UK productivity problem. The report identifies “Productivity Heroes” - 36,000 of the UK’s 1.2 million established SMEs who are at least three years old, are creating jobs but growing revenue even more over a sustained 12-month period. Most of these businesses are in the Services sector, located in and around London.
A cursory look at the PR Week Top 150 tells you that a significant number of UK PR agencies must be in this elite cohort of Productivity Heroes.
The PR Week table is 90% SMEs, 95% London-based (I won’t go into the rights/wrongs of this here), most have been around for three years and average revenues grew by more than 10% last year.
So what’s in the Manifesto that will help these creative industry Productivity Heroes grow even more productively? And what more could be done?
What’s in?
The Manifesto calls for “a springboard for growth through expanded financial incentives that encourage SMEs to take advantage of AI”.
Much has been written about the potential applications of AI in PR - read this great paper from Wadds Inc. for more. Given the huge potential of AI for our sector, particularly through management efficiency and issues like misinformation, any incentives would be welcome.
I’d say the report lacks specifics on this, but I do wonder if more can be done through the (now chaotic) R&D tax credit system to assist this.
Business rates are a real bugbear for entrepreneurs and, for good reason, the focus for this debate tends to be on the struggles of high street retailers. It’s easy to forget that service companies also pay business rates. As PR agencies tend to occupy more expensive central locations, we are major contributors.
It’s not that we mind paying business rates, but there is very little visibility around what you get in return. Too often, local authorities don’t have the resources to deliver the basic services that businesses need, like recycling or policing burglary or anti-social behaviour.
The Manifesto calls for possible ‘differential’ rates for businesses according to sector or size. It might be better to do away with them entirely, in favour of hypothecated charges that show businesses what we get for this tax.
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(There is a much bigger issue here around LA funding that I don’t have time to go into!)
What’s missing?
For good reason, the manifesto talks a lot about venture capital and equity financing, particularly extending schemes like SEIS and EIS so they reach more diverse business owners.
What’s missing, particularly for services businesses like PR firms that rely less on equity finance, is an incentive at the other end that gives wealth creators a reason to grow their agencies.
At the conference, George Osborne suggested that Labour should send a signal that it is ‘pro-business’ that is equivalent to the 1997 cut in CGT.
A great way to do that would be to take the cap on Entrepreneur’s Tax Relief (now called Business Asset Disposal Relief) from £1 million to £10 million, where it was before the Conservatives slashed it.
As an industry, we are particularly affected by the total dysfunctional childcare system in the UK and the fact that the weight of childcare responsibility still falls on women.
As Women in PR and others have pointed out, too many senior women are leaving the PR profession.
Make no mistake: the lack of equal paternity rights and decent, affordable childcare provision are a business issue, not just a social one. In PR agencies, there is a direct link between this problem and lost skills and productivity.
Of course, it’s up to agencies to offer flexible working and good parenting rights, but we are fighting a structural issue that must ultimately be litigated at a national level, where statutory maternity and paternity pay should be equalised and childcare provision made more affordable.
Both Parties want to revive urban economies and bring people back into offices for at least part of the week. For sustainability reasons, we also want to get people out of their cars.
This is something PR agency owners are keenly aware of. Post Covid, we want to bring people back together for at least part of the working week so they can be more productive and creative.
Strikes are an absolute blocker to growth and productivity; we need better labour relations to get this sorted out.
And while we’re at it, let’s make it safer and easier for young people to cycle to work by improving the cycle infrastructure beyond Central London. If we want workers in offices, we have to make it safe for them to get there.
Read the Small Business Manifesto and contribute to the debate yourself #10KSBUK | @GS10KSmallBiz | gs.com/10ksb-uk.