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Training: A recent survey by the Federation for Small Businesses

Sales, marketing and PR are the most needed skills for small business, according to a recent survey by the Federation for Small Businesses (FSB).

The survey was biased towards the very smallest ‘micro’ businesses, but even so I was amazed that 47% of them had not invested in any training at all in the last year (up from 29% the previous year).

There is a clear link between the size of the business and training. For self-employed businesses, 61% did no training; of those with 21 or more employees, 13% did no training.

Another disappointment is that training on lowering carbon emissions is way down the list at no. 11. I went to a Lloyds Bank presentation on July 8th, at which our bank manager (Graham Muse) gave a great presentation that explained why environmentally conscious businesses are likely to do better financially than their competition.  With the web these days there is no excuse for this neglect. You can find some great free training and advice on how to cut carbon and costs on the Carbon Trust website.

All this is despite the fact that training and sustainability are two of the few areas where grants and tax incentives are still available. See my blog posts here and here for details of grants. Did you know that your limited company can get tax relief for just about ALL training for employees and directors, even if it’s not work-related?

Here is the full list of training needs from the FSB, with most in demand first:

  1. Sales, marketing and PR
  2. IT
  3. Financial
  4. Planning
  5. Legal and regulatory
  6. Other (sector expertise)
  7. Leadership and management
  8. Communication
  9. Project management
  10. Customer service
  11. Low carbon
  12. HR
  13. Languages
  14. Literacy and numeracy

For the full article see here.

What skills are most needed in your business, and what are you doing about it?

4 Responses to “Training: A recent survey by the Federation for Small Businesses”

  1. Tony Armstrong says:

    The statistics relating to micro businesses held no surprises for me as these businesses tend to share two characteristics; firstly, they are simply too busy ‘doing it’ to be able to spend time away from their businesses (or to allow members of their staff to do so). The second factor is that most micro business owners have, in fact, created for themselves a job and haven’t yet realised the need for further training.
    The biggest surprise is that 87% of the 21+ employee businesses did undergo training! This figure is so large that I would speculate that it is probably distorted by large numbers of firms spending very little.
    The FSB list of training needs also contains few surprises as the top 5 are the areas where I have found owners will admit to needs that are usually urgent. With regards to the lack of interest in ‘low carbon’, I, again, am not surprised as it is a more controversial subject than any other. Action that will produce significant savings will also involve real investment (over and above any grants)and with banks still taking a very parsimonious attitude to lending, this is an area where decisions can often be delayed until ‘tomorrow’.
    However, business owners should take note of this list and realise that by looking at their own needs with an open mind, targeting training where it will give the greatest returns, sharing the learned techniques among the whole team (where relevant and monitoring results, a very worthwhile return can be made. Having a discussion with a trusted adviser will often be a great place to start.
    Oh, and they can also get an instant return by turning off lights and turning down the heating in the cooler months!

  2. Andrew Scott says:

    Does the tax rules discourage micro businesses investing in training? The tax rules are different for limited compnaies and sole traders. A sole trader will not obtain a tax deduction or training that gives him a new skill. This is because the revenue will treat this as a capital expense. A sole trader can obtain a tax deduction for training updates. Contrast this to a one mane limited company all training costs can be deducted from the taxable profits.

    This can be a good reason among others for trading as a company but I do think the tax treatment of training costs for sole traders is unfair.

  3. So my long term goal to learn to scuba dive in Thailand can be a legitmate company expense?!

    This definately fit’s in the if it sounds too good to be true…

  4. Andrew Scott says:

    The Revenue booklet 480 gives a really good understanding of the rules for claiming training costs at Appendix 9. The training does need to be work related. It is defined as any activity which is designed to impart, instil, improve or reinforce any knowledge skills or personal qualities which

    -are, or are likely to prove, useful to the employee when performing his or her duties or

    – will qualify or better qualify the employee to undertake the employment or to participate in charitable or voluntary actvities arising through the employment.

    The term includes a wide range of practical and theoretical skills, so long as those skills are relevant to the employee. Where leadership team skills are appropriate to the employee participation in Outward Bound, Raleigh International or Prince’s Trust would qualify.

    To answer your specific question Rob if you enrolled on a leadership course that included scuba diving as part of its skills set and the course helped you to manage your tem better then it would qualify. Including the accomodation costs.

    If the company just paid for you to learn to scuba dive with no benefit to how you do your job it could claim the cost but it would be personally taxable on you as a benefit in kind.

    In other words the company would obtain tax relief at say 20% but you may pay tax on the benefit at 40% or 50%

    Unless you were training to scuba dive to embark on a marathon scuba dive for charitable purposes!

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