With the Autumn Statement set to take place on Wednesday, former winner of The Apprentice Harpreet Kaur has called on the government to get behind small businesses, as she insists the prospect of tax cuts will not only help business owners but offer a much-needed relief to the everyday consumer too.
Harpreet owns her own desserts business Oh So Yum!, which boasts two stores in the UK and houses products in both Selfridges and the Hilton London Metropole.
She recently made the decision to part ways with Lord Sugar, after landing his sought-after £250,000 investment on The Apprentice.
Gaining creative control back of her company and running the business alongside her sister, Harpreet shares an insight into the challenges she faces as a small business owner and admits she’s had to ‘reassess her business model’ as a result of the current economic climate.
In an exclusive interview with investment platform Saxo, Harpreet shares how financial strains and tax increases have forced her to ‘pivot and go into different areas of businesses she’d never explored before’ as the margins she used to achieve are so much more difficult to reach now.
Revealing her electricity costs have ‘tripled’ over the last few years, Harpreet is now urging the government to help boost the morale and motivation of consumers and local business owners by introducing more access to training and skills development, a reduction on the freeze on business rates and easier access to finance to manage cash flow.
She argues tax breaks and cuts would offer the financial relief needed, thanks to an increase in disposable income, which is imperative to ensure local businesses not only survive but are able to progress.
There may be some changes to ISAs and Saxo are now offering 3.89% interest on uninvested cash – as a business expert and influential businesswoman, how important is it to encourage saving and investing?
It’s important that the interest rates offered and returns on ISAs are worth putting your savings into, so it is essential to do your research and seek professional advice. In terms of saving and investing, I’m a huge advocate of this. It can be really difficult to do and put that money aside, but whatever people can afford to save, it really helps. Getting finance is so expensive, having savings means you have that little pocket of money to fall back on.
There are risks associated with investing of course and putting your money into something where you are unsure of the return can be scary right now, but that’s why it is important to take advice and then pick the platform and investment products that suit your goals.
Despite some people not having as much spare money, I do think, however, investing in the right businesses that are on the right trends and that are solving a problem or are advancing in terms of what technology has to offer now, e.g. one of Saxo’s equity theme baskets like NextGen medicine can be rewarding in the long term.
These businesses are also creating employment opportunities which are just as important.
What should the government do to support small businesses like yours and why?
“Right now in the current economic climate there are so many challenges and pressures on small businesses, so many have already been forced to close, so many are on the brink and just managing to keep ticking over. I’m really concerned that there’ll be something in the budget that comes in that only increases those challenges.
“I think the government needs to put a number of things in place to ensure the survival of small businesses in the future. Something like reducing or freezing business rates would really help – I know that they did this in the past with Covid – more relief there would help, not increasing any tax rates or National Insurance contributions again, doing that impacts how much disposable income customers have.
“Less disposable income means less money spent in small businesses. Also a real problem that we’re facing with small businesses is recruitment, getting the right skilled staff onboard and completing that process, converting the unemployment rate – whether that’s help in terms of promoting skills and training in the workforce or a scheme to encourage people to get back to work, I know that a lot of businesses in various industries right now are really struggling to recruit.”
How important are small businesses like yours to the UK economy and why?
“Small businesses are the backbone of the UK economy, we all know that. There’s so many small businesses that provide so many benefits to their local communities – providing employment, growing the economy… small businesses account for a really significant proportion of employment in the UK.
“I think with consumer awareness now people really like to buy local and support their local business owners.
“They want to support people who are trying to create opportunities for themselves, especially in the current climate. People really respect that and support that. It’s important for small businesses to survive and thrive and it’s crucial to ensuring diversity across the economy.”
How do factors like energy costs, raw materials costs and tax increases impact small businesses like yours?
“The rising costs across so many elements of running a business such as energy, ingredients, packaging, the raw product itself – in my business, our electricity bill has almost tripled over the last few years and it completely cuts the bottom line profit that you’re making which can make it really difficult to just stay afloat.
“The margins that we used to achieve in the past are so much more difficult to achieve now and you can’t often pass that cost on to your customers because they’re having their own struggles.
“The construction industry is seeing a shortage of materials there and it’s really impacted them, they can’t always pass that cost on to the customer. The business, really, always has to absorb it.
“It definitely puts a strain on the finances of small businesses and I know that my own margins and finances have changed over the past few years and we’ve really had to assess our business model, we’ve had to pivot and go into different areas of business that we’d never explored before and often out of creativity, but sometimes out of simply being forced to because you need to make that extra income. Any tax increases just add on to it all.”
You sell an affordable luxury, do you benefit from ‘trading down’ or the ‘lipstick effect’?
“I’m going to be honest and say that our business has definitely benefited from trading down in the past, especially during Covid when finances were limited.
“People would often make themselves feel better by treating themselves to something delicious – now, however, I’m not seeing as much of that, I think times are really hard and people can’t afford to do it, they’re having to watch every penny they’re spending.
“The government needs to put things in place, not just for small businesses, but that actually help the average household and everyday consumer.”
Interest rates have risen rapidly, how do they affect small businesses like yours?
“Rising interest rates is something more to battle with, businesses like ours that have existing finance in place, to service that existing debt, the rate has been increased on that so that’s an increasing overhead – obviously, marginally, but it all adds up.
“It can be a real blocker to borrowing more money, it can often be too expensive for small businesses, so they don’t want to consider it. If they do take it, the interest rate is so high increasing the monthly repayments and again it doesn’t feed into making a profit, businesses are just ticking over.
“The government needs to look into making finance more affordable and more accessible for small businesses because they really need it, especially from a cash flow perspective.”
Would small businesses like yours be set to benefit from tax cuts which would in theory create more disposable income for the public?
“100% – customers come in and they don’t just want to buy a dessert, they want to have a friendly chat. People are worried about the tax rates going up – any cuts there are seen immediately, people not only have the extra income, but there’s that perception of them being able to enjoy that extra income more – they’re more likely to spend on local or small businesses.
“That extra money from those tax cuts in terms of the business can help that money to either flow better, it can bring them back from the brink of closure, and it allows businesses to invest. There’s lots of new technologies coming out all the time, it’d be nice for businesses to be able to put towards that rather than having to pay it back in tax all the time.”
You had to demonstrate your credentials in business on The Apprentice, should politics be the same in terms of those in power proving they can walk the walk as well as talk a good game?
“I think one of the reasons that I got so far on The Apprentice and was successful was because of the experience I already had.
“It’s a very intense process and you’re under a lot of pressure – I think if I didn’t have the experience that I have such as dealing with different people, dealing with complaints, being under pressure, experience with facing challenges you haven’t come across before, I don’t think I would have got as far as I did.
“It was my experience and my wisdom that I already had, I was able to apply myself appropriately. I do think politics should be the same, I do think you should have some experience of working in the community or a position of power elsewhere. It’s important that politicians have some real world experience, it gives them the skills and the overall insight to be able to face challenges/opportunities so that they can view situations from a number of different angles.”
Would you ever consider a move into politics yourself?
“If I’ve taken on Lord Sugar, surely I can take on anything. I’m very much focused on business and that’s my priority, but if the current government doesn’t sort its act out and start helping people out, then who knows? Never say never.”
What would you do to stimulate the UK economy?
“For me, if I had to stimulate the economy, I would definitely work on raising the morale of local people and local businesses in this country.
“People need a break, they need a way of getting employment opportunities that they actually enjoy and that increase their income – maybe giving more access to training and skills development that benefits both the employee and employer. We need a reduction or freeze on business rates, we need easy access to finance to manage small business cash flow, we need more support – whether it’s mentoring or support groups so that people can share the challenges that they’re facing.
“Those tax breaks and those cuts not only allow businesses to keep afloat, but you’re boosting everyone’s motivation and morale to progress forward. People can innovate, they can do research and development, which is only going to push the country forward as opposed to staying at a standstill.”
What do you hear from customers about the state of the economy and what is important to them in this year’s statement?
“People talk all the time, people are constantly worried about the cost-of-living, whether it’s their electricity bill or their supermarket bill, fuel, mortgages, interest rates – it makes it really difficult for consumers to spend and go out. Not only are businesses affected, but people are really struggling.
“The state of the economy is having a direct impact on people’s livelihoods. I’m hoping that the Autumn statement has some exciting things in there that everyone can look forward to.”