'One-man bands' can fill jobs hole, says FSB

The lobby group is calling on the government and local authorities to reorganise services such as Business Gateway to focus on helping companies set up by freelancers and entrepreneurs to take on one or two extra employees.

There are around 200,000 one-man band companies in Scotland. In a recent FSB poll of such firms, almost half of respondents said they would be keen to employ another person but were concerned about legal implications, or were put off by bureaucracy.

Colin Borland, head of the FSB in Scotland, said these firms could go a long way in helping the government overcome the looming jobs crisis north of the Border, as the public sector is expected to lose 20,000 jobs over the next five years. Helping one-person firms with simple advice will be one of the key policies in FSB Scotland's forthcoming Scottish election manifesto, due to be unveiled at Holyrood on 3 February.

With the economy and employment likely to play a key role in election campaigns, Borland said the small business sector, which already accounts for 99 per cent of Scots firms, will be leaned on heavily to make up a large part of the jobs shortfall.

Over the last ten years, big firms, with 250 employees or more, shed 34,000 jobs in Scotland while the small business sector created 67,000, Borland said.

"Big business has been downsizing, the public sector is getting ready to do so, so we are the only ones who are going to be creating any jobs," he said. "There are owner-managers out there working every hour to keep up with the work. Why aren't we making it easier for them to make that jump to become employers?"

Borland said that by failing to exploit this part of the economy, Scotland was losing out on tens of thousands of potential jobs.

"If you could make it as easy as possible to de-risk that process and get the right support then you just need to look at the numbers to understand the scale of the opportunity."

The FSB believes Business Gateway would be the ideal place to deliver such services.

"It wouldn't be expensive," Borland said. "It would just require a shift in priorities."

The lobby group's manifesto is also likely to press politicians to improve funding for small firms amid claims that many have turned their backs on expensive bank finance and are supporting themselves through "unsustainable" means such as credit cards.

Borland called on parliament and the financial services industry to conduct a detailed study into the viability of a regional stock exchange, which would allow small firms easier access to equity finance.