Retailer wants backing for small business

When Simon McCarroll finished his degree at Birmingham Polytechnic 15 years ago, he decided to stay and set up business in a city on the cusp of regeneration, rather than return to his native Bolton.

His shop, a small printing services retailer called Streetprint, flourished, helped by its location in the Custard Factory, a cluster of small retailers which has attracted some of the city’s best young creative and business talents.

But 18 months ago, that changed. His sales dropped by half “almost overnight”. The recession was tough for his company, which relies on the custom of small local businesses, for whom printing advertising was suddenly a luxury.

Mr McCarroll was faced with a choice: carry on as before and risk going under, or invest in new equipment that would allow customers to print their own material and bring down prices.

He chose to buy the new machines, but they required more space, so he doubled his bet by agreeing a lease on a new, larger shop in the same complex. It was a massive risk. But with custom picking up and the future looking secure, it appears to have paid off.

Now Mr McCarroll’s main worry is a VAT increase. “For our retail customers, making T-shirts or banners, that would make it too expensive. Either there would be a price hike or we would have to swallow it.”

He is happier about the government’s promise to stop Labour’s planned rise in national insurance. “That would have put me off employing anyone else straight away.”

He hopes the coalition will announce further measures to make banks lend to small businesses. The funding for his new store came from imaging company Konica Minolta, an example of the trend for large companies helping out their smaller trade partners when banks are not lending. “I’m not sure the government has the power to tell private banks what to do,” he says. “But it would be good if the nationalised banks took the lead on this.”

Mr McCarroll is sanguine about public spending cuts, which he says are unlikely to affect him personally. But he realises that cuts, in a city like Birmingham, which relies heavily on public sector employment, are likely to filter through. “There will be less money around, full stop, and that will affect our customers. It could be a snowball effect.”

Verdict “The VAT increase is pretty bad for us. It could mean, just after Christmas, all our prices going up by 2.5 per cent, which would hit us quite hard. We may have to absorb it, but obviously that eats into our profit margins.

“I’m quite pleased by the moves they have made for small businesses. Corporation tax at 20 per cent could benefit us, in the medium term anyway. The £1,000 increase in the personal tax allowance will benefit our staff quite a lot, so it is not all bad news.”