There will soon be 5 million sole traders in the UK economy – which makes up 14% of the workforce and our numbers are growing – 30,000 more in the last 3 months. The attractions of self employment are well known – the flexibility, control of hours, the reduction in bureaucracy, the ability to juggle other interests and responsibilities. So are the disadvantages well documented – the increased risks, unreliable income, no employee rights, the isolation from the office environment. There are also fears for businesses using freelancers about whether they should be moved to the payroll – the Autumn statement may comment on this.
What does not seem to get so much attention at national or regional level is the economic contribution of these businesses and how their needs are met. If we assume most full time sole traders have an average income of less than the VAT threshold and after tax may make £40,000 – that income creates, on a basic calculator, £182 Billion a year which is a great deal of gross value added to local and national economies!
Much emphasis is placed by strategists on start up business and then looking at those start up businesses to grow and employ some and then more people. This is of course a vital element of success and productivity which needs to be developed in the UK economy. We do also know that many self employed people do not wish to employ people but they are interested in growing their income. The growing income then is spent in the local, regional and national economy so adds value.
The value of self employed people is not just around their economic benefits to UK PLC. It is also about the contribution to local society and community activities. From among my immediate contacts, a plethora of community arts, disability and environmental projects are supported by people who balance their work contracts with community energy and commitment.
The debate on business support does not usually focus on the support needs of micro and sole traders but perhaps this should change given the significance and wider social benefits. Much general information about business development and legal responsibilities are accessible to all but that coaching and support is harder to access especially as the sole trader, by definition, is just an individual with little free resource to spare for networking or workshops. The benefits of local sessions for and attractive to sole traders should be explored. I have had the benefit of group coaching sessions – through Bird Table – targeted at female business owners and all involved have been more informed and inspired to grow their income and enterprise as a result. Lunchtime sessions with wide ranging professionals sharing their current issues can also be a fertile approach for sole traders.
There is much to ponder and little resource to support initiatives but local solutions and social media support both feel like appropriate and useful parts of the package to support this growing element of the economy.