The company formation and small business sector are consistently identified as being the ‘backbone of the UK’s economy’ by both politicians and economists alike. And, as David Cameron’s coalition are expected to announce even more cuts in public spending in their Emergency Budget on 22nd June, there has never been more pressure on the company formation and small business sector to become the main drivers of economic growth.
Therefore, it may come as a surprise to some people to learn that a number of recently formed companies are being over looked when it comes to new business opportunities as they are perceived to be to ‘unstable’ to do business with.
According to a report by the Forum of Small Business, over ten per cent of businesses have a policy of not doing business with companies that were formed under a year ago. While over twenty per cent said that a companies age is a major contributing factor as to weather they will do business with it or not.
Matthew Marsden, spokesperson for the FSB, comments ; “ While we appreciate that it is vital a company researches and assesses any company they are planning to do business with, especially in an economic downturn , we fear that the UK’s fragile economic recovery could be jeopardized if established businesses refrain from doing business with companies which have recently been formed.”