Five ways SMEs can prepare for the upcoming general election

After months of speculation, a date for the general election has finally been announced. 

The UK public will go to the polls on July 4, 2024 and vote for the party they want to see form the next government. 

With a relatively short period between the announcement on May 22 and polling day, party manifestos have emerged thick and fast this week.

For small businesses, a general election can be an unsettling time. There’s the potential for a new party to take power, or for an incumbent to retain power on a new set of pledges. What does it mean for existing regulation? What might the future look like? 

And while there is still some uncertainty around key global issues, there is also some cause for optimism for small businesses. Inflation has been coming down and there are rumours in the air that the Bank of England may reduce the base rate in the coming weeks.

So what are the main parties planning for small businesses if elected?

Manifestos

Most parties have now unveiled their manifestos - a series of pledges that set out a party’s action plan for the coming parliament. 

Conservative Party

Starting with the current party in power, the Conservative’s have set out a £4.3bn support package and ten-point plan to support SMEs. 

They have said they won’t raise corporation tax and will abolish the main rate of National Insurance for some 4 million self-employed individuals. In addition, they intend to ease the burden of business rates for high street, leisure and hospitality businesses and keep the VAT threshold under review, following its recent threshold increase to £90,000. It’s also on the agenda to leverage Brexit freedoms and consider lifting the employee threshold - allowing more companies to be considered medium-sized.

They will also retain various funding initiatives including the Enterprise and Seed Enterprise Investment Schemes (EIS and SEIS) and consider ways to ensure small businesses have greater access to government contracts.

Labour Party

Labour, meanwhile, are making wealth creation their number one priority. By focusing on a manifesto of change across a whole range of areas, they pledge to support small businesses - “the lifeblood of small communities and high streets across the country”.

Like the Conservative’s, income tax and corporation tax will not rise and they will reform procurement rules to give greater access to government contracts. They will also reform the British Business Bank, giving them a stronger mandate to support growth and make it easier for SMEs to access capital while improving guidance and removing barriers to exporting goods and services.

Another key area Labour intend to take action on is around late payments - ensuring SMEs and the self-employed are paid on time. It's also Labour's intention to replace business rates with a new system to level the playing field between high street and online retailers - the details of which are yet to be announced. 

Liberal Democrats, Green Party & Reform UK

The Liberal Democrats want to create a more stable business environment - with smarter regulation and more investment in skills, infrastructure and innovation. They also want to improve relations with our closest trading partners and work with banks to fund the creation of a local banking sector dedicated to meeting the needs of local businesses. 

Finally, the Green Party are pleading to set up regional mutual banks and pay out £2bn per year in grant funding to local authorities to help businesses decarbonise. Reform UK meanwhile are pledging to lift the corporation tax threshold to £100,000, abolish IR35 rules, lift the VAT threshold to £120,000 and reform the tax system. 

So, lots to take in and lots of tantalising pledges - many of which appeal directly to small business owners in a bid to attract their vote. But what practical steps can you take now to help your business prepare for the upcoming general election? 

1. Don’t bury your head in the sand

It can be tempting to just cut out all of the noise surrounding a general election and keep your head down - business carries on, the work doesn’t stop. But taking this approach might mean you’re caught off guard, especially if a new party is voted in and starts implementing their policies at speed. 

Where possible, try and keep up to date with election news and potential policy changes. This will help you to anticipate any changes that may be coming and plan accordingly. 

2. Speak up

If you haven’t already, consider joining business associations such as the Federation of Small Businesses (FSB) and the Small Business Commissioner. These organisations are advocates for small businesses and continuously offer their insights while also providing ways to voice concerns. They are your voice - use them.

It's also a good time to consider participating in any local public consultations and hearings - you might find other small businesses sharing similar concerns. If there is a general concern emerging, then you can collaborate on joint letters or campaigns to share those common worries.

3. Plan

If you have the time and resources, think about developing a contingency plan for different election outcomes. Think about what pledges are likely to have the greatest impact on your business and work out a potential way to deal with them. It’s always worth bearing in mind that not all pledges will be realised on day one.

4. Organise your finances

It’s always good practice to ensure your financial affairs are in order. Reviewing cash flow, credit and debts should be a regular activity anyway. But with potential change on the horizon, it’s perhaps even more important to check that things are okay, and if not, then now might be a good time for some financial tidying. 

Where possible you should review and adjust budgets. If you can, pay down any high-interest debt. Consider strengthening cash reserves, perhaps with a business savings account.

5. Check in with your customers

General elections aren’t just uncertain times for small businesses - your customers, investors and clients will likely be going through similar feelings. Checking in with your customers, perhaps through social media channels, can help gauge the mood. You might then be able to tweak your services, plans or messaging to suit the general public sentiment. It's important to remain neutral where appropriate, however, so you don't alienate any portion of your customer base.