As the Conservative Party seals its golden handshake with the Democratic Unionist Party (DUP), small businesses in Northern Ireland will be watching closely to see how local enterprise might benefit from the £1bn deal.
Prime minister Theresa May has said the money represented “new investment” in Northern Ireland, alongside the £500m development fund already available. So, what can small business owners in Northern Ireland expect from the windfall, and where is it most needed?
With £150m already set aside to deliver super-fast broadband in the region, a further £400m has been marked for infrastructure investment, of which a major roads project in North Belfast is expected to be a priority.
For the remainder of the funds, new research has indicated where the money might best be placed.
According to findings in the Ulster Bank’s Boost Index, “rapid growth” was experienced by only one per cent of small businesses in Northern Ireland in the past year.
The index took a wider look at the performance of small businesses in a range of sectors, with just 38 per cent of owners describing their business as “stable”.
Two growth barriers were commonly cited by respondents – Brexit and the collapse of the Stormont Assembly.
Workforce expansion is also a problem for growing companies. The country’s small population of 1.5m means a limited pool to recruit from.
Northern Ireland is more dependent on farming than the rest Britain, and greater support could be expected for independent growers and suppliers in this parliament. Agriculture was identified by DUP leaders during discussions as a “critical” policy area.
However, the biggest issue uncovered by the survey was the narrow market for companies to operate in. Some 78 per cent claimed high competition was a major obstacle to business growth.
Strong domestic competition placed even further emphasis on the need for small businesses in Northern Ireland to make progression on trading overseas.
According to the index, just seven per cent were exporting to countries outside the UK and Ireland. Overall, under a fifth were selling to England, Scotland and Wales.
With international markets more accessible than ever, boosting exporting power could become a vital revenue stream for entrepreneurs in Northern Ireland.
Commenting on the country’s low exports, Lisa McCaul, a business growth enabler at Ulster Bank, said the trend was cause for concern.
“There is often a perception amongst small businesses [in Northern Ireland] that exporting is not for them, it is for larger businesses. But the reality is that exporting doesn’t have to be complicated and could simply mean increasing sales a few percent by selling some product overseas online,” she said.
As far as Brexit is concerned, some fear a potential “hard” border with Northern Ireland will suppress growth for Northern Ireland businesses.
‘The more the DUP and Conservatives maintain their opposition to the Single Market and the Customs Union the more likely it will be that EU border checks will be introduced between Northern Ireland and the Republic of Ireland – negating much of the promised infrastructure improvements and taking cross border trade back to the bad old days,” said David Jinks, head of consumer research at global delivery experts Fastlane International.
Jinks added: “Northern Ireland’s exporters will face also new tariffs and delays shipping to the EU following a hard Brexit deal, in common with the rest of UK businesses.”
Despite the current barriers faced by small business in Northern Ireland, the country was rated in 2015 as the best part of the UK to start and scale a business. A report from the Enterprise Research Centre (ERC) found startups in the region hit £1m turnover milestone faster than in any other part of the UK.
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