How is the EU helping small businesses?
After the recent EU VAT changes, many SMEs may feel that the European Union does nothing but add to their regulatory burden. But having realised that the EU’s economy is greatly boosted by small businesses, the Brussels-based commissioners are constantly developing programmes designed to help businesses like yours stay competitive and financially solvent.
So what does the EU really do for you?
Think small first
The little-known Small Business for Europe Act outlines a number of strategies and guidelines, behind which lies a key principle – to “Think Small First” when tendering for work, or trying to partner with new suppliers. By adopting this approach, the EU commission hopes to support SMEs by putting more work their way, increasing local tax receipts and strengthening the economy in each member state.
The EU also aims to actively support SME competitiveness and innovation, most clearly seen through the award of grants and funding for certain project types.
Encouraging entrepreneurs
At the heart of every SME is an entrepreneurial spirit – individuals committed to building successful, profitable organisations. Recognising this fact, the EU has created the Entrepreneurship 2020 Action Plan which is intended to encourage and cultivate the skills required to build and launch successful small businesses through the provision of training and support.
Perhaps slightly in contradiction to the VAT changes mentioned earlier, the action plan also calls for a reduction in red tape and other bureaucratic hurdles that otherwise stifle interactive business creativity.
Improving international trade
The European single market was always intended to facilitate simplified trading with other member states, and the EU remains committed to that original tenet. The Union continues to encourage internationalisation of SMEs by inviting them to trade with partners and customers elsewhere throughout the member states.
Statistics suggest that just 25% of European SMEs export anything, a figure that the EU Commission is keen to increase as quickly as possible.
Improving financial flow
Although the EU provides no direct financial funding (beyond grants for certain specific projects or developments), they remain keen to emphasise their role in changing operating conditions to improve cash flow. The landmark Late Payment Directive was designed by the Commission to encourage customers to pay their debts on time – a common bugbear for SMEs.
Whether the new late payment guidelines have made any major difference to SME cash flow remains difficult to measure, but it is good to see government agencies taking the issue of cash flow and invoice debt seriously.
The European Union may often feel like a faceless body of politicians making bureaucratic decisions remotely from Brussels, but behind the scenes they are making some changes to improve conditions for SMEs. This also means that any SME serious about growth may find some extra opportunities they need lie outside the UK, elsewhere in the EU.
For more help and advice about European markets, or the funding available from the EU, give the 3 Wise Bears team a call – our small-business specialist accountants are always happy to help.
