Wake up and smell the coffee...

Bibby Financial Services today urged the small business sector to wake up, smell the coffee and get ready to take advantage of the huge opportunities that the recent expansion of the European Union (EU) will provide.

On 1 May, following years of planning and negotiations, 10 new members from Central and Eastern Europe and the Mediterranean were welcomed with open arms into the EU. The economic implications are enormous - the latest EU expansion has created a single market that is bigger than the USA and Japan combined, comprising of some 74 million new customers.

However, there is evidence that not all small and medium sized businesses share the British Governmentís enthusiasm for the newly expanded European Union. A recent survey, conducted by accountancy firm Grant Thornton, found that four in five businesses are sceptical of the business benefits of EU enlargement. Furthermore, nearly four in ten businesses feel that the expansion could lead to higher taxes, whilst just under half predict that more red tape will be the result.

Commenting on the developments, David Robertson, Chief Executive of Bibby Financial Services said, Itís fair to say that in general, there are very mixed feelings about Europe within the UK business community. This in some respects is due to the fact that trading with our European counterparts has historically presented a big risk for small and medium sized businesses that have been faced with a myriad of local legal and customs standards, not to mention the currency and language hurdles to be climbed.

However, with the harmonisation of trade rules, tariffs and administrative procedures, the UK small business sector needs to gear up in order to capitalise on the significant overseas trading opportunities on offer and stay ahead of the competition.

One area that small business owners and managers and business support organisations do agree upon is the fact that the recent EU expansion should alleviate the chronic lack of skilled staff in the UK.

According to the Institute of Directors (IOD) around 60 per cent of IOD members feel that workers from the 10 countries that have just joined the EU, will help plug the gaps in the British labour market.

Lack of skills is still very high on the list of concerns for UK businesses; a survey carried out by Bibby Financial Services last year, found that 76 per cent of small business owners and managers believe that the skills gap in their industry sector is getting worse. This is backed by recent figures from the Learning and Skills Council, which found that there are 135,000 unfilled vacancies in the UK because employers cannot find appropriately skilled people.

David Robertson said, It is encouraging that small business owners and managers agree that EU expansion will help the ever widening skills gap. However, it is disturbing that so many firms are sceptical about the huge opportunities that the EU enlargement will bring. Whilst UK business is distracting itself with the ever increasing red tape and higher taxes and British bosses worry about the potential perceived pitfalls, other countryís small firms are just getting on with it. At a time when Europe is opening up and the barriers to trade are coming down, it is more important than ever that UK businesses gear up for the challenges of enlargement ahead and keep pace with their European competitors - their survival and the success of the UK economy depends on it.