Business Finance – Skilled labour scarce.

– Start-up failures are down to lack of planning, says Barclays. Less than two thirds of small businesses write formal business plans prior to start up, according to a survey by NOP.

Barclays says the high proportion of small businesses closing within three years of trading (50%) may be due to this lack of formal planning.

Plans, including marketing information and funding requirements, should be concise, logical, honest and realistic. ‘If properly constructed, the plan will establish business objectives, and through regular reviews, allow you to assess the current state of the business and provide an early warning of potential problems,’ said Barclays, small business and start-up director Mike Rogers.

– NatWest finds small businesses short on skilled labour.

Some 50% of small businesses are suffering from a skills shortage, according to the latest NatWest small business survey.

Over a third of small businesses believe that ‘poor supply of skilled/trained people’ is at the root of the problem, with another 13% arguing that ‘inappropriate skills developed at school and college’ is the underlying cause.

NatWest has also become the first of the main banks to remove the ‘repayable on demand’ clause from business overdrafts.

– Third quarter figures show borrowing by small businesses rose by an underlying #1.6bn (up 4%) according to new figures from KPMG Corporate Finance. This is in line with the previous quarter’s rise and takes total lending to #42.5bn at the end of September. Most of the quarter’s rise reflects an increase in variable rate fixed-term loans.

As borrowing has increased, so have deposits, which stand at #38.1bn.

With a larger deposit base, businesses’ dependence on overdraft facilities has lessened.

BBA director general Tim Sweeney said: ‘The welcome shift away from overdraft borrowing, together with increasing deposits is producing a more balanced small business sector.’

– Lloyds TSB has launched an online marketplace to enable businesses to buy and sell goods over the internet.

The idea is that businesses of all sizes, whether customers of the bank or not, will be able to source office supplies and other products in a secure environment.

The site is neutral – no vetting of suppliers takes place – and will be followed in the Spring by a financial solutions service whereby e-procurement sites can access the bank’s credit, finance and payment services.

Related reading