Foreword from the National Chairman


Small businesses are at the heart of communities right across the UK. They not only create jobs, prosperity and vital services, but FSB’s research this year demonstrated that they give so much more.

Four out of five small businesses have contributed to their local community or charity in the past three years; many help develop the next generation’s skills through offering work experience or apprenticeships; and they are much more likely than big corporations to employ those furthest from the labour market.

During my visits across the UK this year, I met countless owners of thriving and innovative small businesses which enrich the communities in which they’re based. The UK’s 5.8 million small businesses and self-employed are integral to the UK’s future economic and social development.

The breadth of talent and ingenuity among SMEs was showcased in the FSB Celebrating Small Business Awards 2019. Choosing winners across the various categories was extremely difficult, but I was pleased to announce as this year’s overall winner the family-run Cruise Loch Ness. The Ethical-Green Business of the Year category was a particularly interesting one, demonstrating how sustainability is fast becoming not just a priority for small businesses, but in some cases absolutely core to their business model.

Another issue which I have been pleased to see growing in recognition and importance is mental health in the workplace and among the selfemployed. FSB launched a campaign called It’s OK to Talk about Mental Health, and I believe it is integral to promoting good mental health that people are able to talk about it. That is why this year I chose Heads Together as FSB’s Chairman’s Charity. Heads Together, spearheaded by The Royal Foundation of The Duke and Duchess of Cambridge, does tremendous work in promoting mental wellbeing, and FSB is proud to support it.

FSB’s members are at the heart of our organisation, and none more so than those who volunteer – giving their time and expertise to further the greater good of the UK’s small business community. Our member conference in March brought together volunteers from across the country, all doing tremendous work locally, regionally and nationally. It was a reminder, if one were needed, that we are stronger when we stand together, and I look forward to us doing so for a very long time to come.

Chairman, Policy and Advocacy’s Report

FSB is member-led, and was set up to give small businesses a voice to be heard by those in power. This last year shows how many ‘wins’ we have achieved, right across public policy. I am grateful for all the brilliant activity undertaken by volunteer members at UK level, in the nations and regions, and for the incredible support and delivery by FSB staff. 

Martin McTague
Chairman, Policy and Advocacy, FSB

The 2018-19 year began with the Chancellor’s Budget on 29 October 2018, with a series of measures announced that were proposed by us, and credited to FSB in the Chancellor’s speech. Highlights included freezing the VAT threshold; securing the Employment Allowance; a high streets package including business rates help; and secured future funding for StartUp Loans, and for the New Enterprise Allowance which helps those on benefits become self-employed.

Through the next six months, FSB built up its policy, public affairs, public relations, campaigns and international work to persuade the Government to create a package to tackle late payments in its Spring Statement. It was a strategic choice to make late payments our number one issue for lobbying; using fresh evidence to persuade Ministers and MPs from all parties to take action.

In March 2019, we ran the Fair Pay, Fair Play campaign online with member videos saying why they wanted to be paid on time, and included a push within the EU to create a global alliance to stop late payments. In his Spring Statement, the Chancellor confirmed our package would be adopted. The Chancellor went on to host an FSB late payments Downing Street roundtable in July to cement the package before the new Government took over. FSB’s work on the issue was recognised with an award for its Fair Pay, Fair Play campaign at the PRCA’s UK Public Affairs Awards 2019. At the Spring Statement we also secured a commitment that HMRC would adopt a ‘safe harbour’ approach and not levy fines for those struggling with Making Tax Digital.

FSB has published high-impact policy reports through the year, including Small Business, Big Heart, a flagship report on small business in our communities. Other publications focused on military service leavers setting up in business; on defence procurement; on apprenticeships; on the impact of regulation; on the future of business support; on the economic case to support women’s enterprise; and on improving access to finance – all alongside our regular quarterly Small Business Index confidence monitor. FSB Scotland published reports on migrant entrepreneurship and transforming towns; FSB Wales on the future of towns; and FSB Northern Ireland on its plans for an enhanced economic zone.

Reputation audits showed that MPs in the UK Parliament, and elected representatives in the Parliaments and Assemblies in Scotland, Wales and Northern Ireland, rank FSB as the number one business organisation. Despite turbulent politics, FSB is securing changes that make the UK, our nations and our regions better places to start-up, run and grow a small business. We remain the authentic voice for the UK’s small businesses and the self-employed.

Finance Directors report

2018-19 saw FSB deliver another strong financial result, whilst maintaining a strong balance sheet which is critical to enable the group to invest in developments for the benefit of its members and aimed at securing its long term financial stability.

David Miles
Finance Director, FSB

The results for the group for the year ended 30 September 2019 showed a surplus for the financial year of £1.3m. This represents the second successive year in which a surplus has been generated.

Income from subscriptions and joining fees amounted to over £26.4m, consistent with the previous financial year, and remained the most significant source of revenue for FSB, providing over 95 per cent of the group’s income. During the year, FSB continued to focus on the quality of its offering and service to members, enabling it to deliver strong retention rates in a challenging economic environment.

Other operating income reduced from £1.3m in 2017/18 to £1.1m in the year ended 30 September 2019. This resulted principally from a restructure of the range of paid-for services available to members, including the replacement of some historical services with exciting new services which have been well received and offer growth potential.

Administrative expenses, which had reduced by £1.9m in 2016/17 and £2.2m in 2017/18, increased by over £0.5m in the year ended 30 September 2019. This increase in expenditure has enabled FSB to invest further in its grassroots and policy activity, and to increase its capacity to deliver continuous improvement of its commercial offerings. Costs have continued to be well controlled, thanks to an ongoing focus on cost efficiency throughout the organisation which ensures that spend remains closely aligned with corporate objectives.

As a result of the surplus generated in 2018/19, I am pleased to report an increase in FSB’s net assets for the second year in a row. Net assets increased by £1.3m to more than £15.8m during the year ended 30 September 2019.

Capital expenditure on tangible and intangible fixed assets amounted to £209,389 in 2018/19, representing an increase of over 40 per cent compared with 2017/18. 2018/19 is the second year in a row in which expenditure on these assets has increased.

FSB holds funds in cash deposits and managed investments, and balances these in order to deliver an acceptable return whilst maintaining liquidity and managing risk.

During 2018/19, cash inflows from operating activities amounted to over £1.1m, and this translated into an increase in cash balances of over £1.1m. The group actively manages its cash deposits, and the interest on these deposits increased by circa 45 per cent to £140,991 in 2018/19 compared with £97,321 in 2017/18, despite continuing low interest rates in the deposit market.

FSB holds investments in two discretionary managed portfolio funds. These funds are held in portfolios which diversify risk via a range of asset types, sectors and geographies and which are actively managed to a risk profile consistent with FSB’s appetite for risk.

The market value of these funds increased by £144,710 (almost 4%) in 2018/19 to £3,866,436. This follows increases in 2016/17 and 2018/19. The original investment value was £3m, of which £1m was invested in 2014 and £2m in 2015.

FSB has approved a business plan for 2019/20 which continues the focus of the past two years on delivering the best possible support and services to small business owners. This plan includes continued investment in products, services and sales channels and will maximise FSB’s ability to attract and retain members, which is fundamental to its success

Chief Executive’s Report

None of this would be possible without the continued hard work of our staff and volunteers who together do so much to ensure small businesses are supported and have their voice heard at all levels.

Julie Lilley
Chief Executive, FSB

This year marked FSB’s 45th anniversary. In keeping with many UK membership organisations and associations, FSB was set up at a time when demands were very different. Back in the 70s and 80s, professional and trade bodies focussed on providing mostly intangible status-driven offerings. The tangible member benefits were more likely to be physical such as books or magazines, rather than virtual. Membership was also seen as exclusive – being part of a club.

Times have now changed though, and so too has FSB. We consider our membership to be a community of business people forming a vital part of the wider community. Our members need more support than ever and we are committed to delivering to those needs. Our aim is to help businesses to not just survive, but thrive. This is what drives us to continue to negotiate with governments at all levels to provide a fair environment for smaller businesses to grow; and in so doing, provide vital support that benefits and enriches our communities.

This year we published the report Small Business, Big Heart which looked at the impact smaller businesses have in their local communities. Our evidence suggests that small firms create strong civic engagement networks which may help to foster greater trust within communities and, as a result, encourage more people to work together to help the community as a whole.

Another community which brings a unique perspective is made up of those who have served in the British Armed Forces. FSB research (2019) found that six per cent of people who run small businesses are veterans. We raised awareness of their journeys and contributions in our campaign and report A Force for Business, whilst calling for more Government support to encourage even more service leavers to consider small business as a career. The report was endorsed by X-Forces Enterprise, an organisation which we have had a public relations partnership with over the past year.

I believe, against the background of political turmoil, the support FSB provides is more valuable now than ever. FSB has worked tirelessly to focus on domestic issues such as business rates and late payments - crucial issues to those running their own business.

Despite the challenging conditions, there are more people choosing to run their own business than ever before. The latest figures show there are 5.8 million small businesses in the UK and an incredible 4.9 million of those are self-employed. Being self-employed can be extremely rewarding, but it also poses unique challenges.

For those who work for themselves, it is essential that they can access a network of support, and that’s why FSB is so important – not only do we offer benefits including legal advice and insurance, we also offer the means of having a powerful voice which will be heard by those who have the power to make change.

Members tell us that one of the key things they value is access to training. In 2018-19, we rolled out a successful programme of masterclasses right across the UK covering how to prepare for Making Tax Digital, and also ran a series of digital skills training in partnerships with Facebook and Google.


Small Businesses: At the heart of our communities

FSB’s success in supporting small businesses and the self-employed not only drives the economy but also strengthens our communities. Smaller businesses help to make our towns, cities and rural spaces more vibrant, rich and diverse places in which to live, work, study and visit. They are often the heartbeat of our communities through numerous undertakings, such as volunteering activities and support of local schools and colleges.

As agents of social change, small businesses often provide jobs, skills and training to those furthest from the labour market, such as those with disabilities; people with a low level of educational attainment; people returning to work after a career break; the long-term unemployed; unpaid carers; ex-prisoners and those who have previously served in the Armed Forces.

Delivering for our members

2018-19 saw FSB publish 44 policy reports, briefings and consultations in addition to national campaigns on behalf of its members. Targeted at a range of audiences, these outputs highlighted and drove change on key business issues that affect our members the most, to a range of key audiences.

Lobbying Wins

Supporting our members

FSB provides its members with a range of benefits to help them run and grow their businesses. These include 24/7 legal advice; tax investigation protection; access to finance; a medical and health service and the award-winning First Voice magazine.

In the last financial year, FSB helped hundreds of its members with legal protection insurance, including employment tribunal cover and covering loss of earnings for jury service.

Highlights of the last financial year in numbers