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Internet Security Threat Report 2014

In the age of internet commerce and long-distance transactions, a growing number of small businesses feel less a part of their local communities, according to a new survey.

Research from NatWest shows that a fifth of UK small firms say they concentrate their business beyond their local community.

Nearly three-quarters of small and one-person firms look outside their community for business compared with 46 per cent of those firms with 20 or more employees.

Most cited the internet as the main conduit for facilitating business further afield and feeling less involved in local affairs.

Wholesalers and transport and travel firms were more likely to focus their efforts afar, whereas hotels and restaurants dealt almost exclusively with local customers.

"It seems that the stereotypical small business operating in the local community for the local community, is no more," said Pete Ferns, director of NatWest Business Banking.

"Nowadays, entrepreneurs look further afield for business and the internet has opened up a world of opportunity for them to operate across the globe."

Some, however, have wondered if these figures mark another symptom in the decline of small businesses that has carved away at the image of the traditional British high street.

While it certainly depends on a firm's type of business and if its goods or services are relevant to the local population, Ben Pennington, spokesman for the Forum of Private Business (FPB), said the aggressive encroachment of larger corporations into smaller communities could be driving SMEs onto the internet and away from home.

Supermarkets, in particular, he said, have a way of 'hoovering up' their smaller competition with unfair marketing advantages and tax breaks, such as, for instance, selling hot takeaway food without charging VAT.

"We want to see local businesses operating in the local area, and we want to see the high streets reenergized by giving more small business rates relief," Pennington said. "If you risk losing small businesses, you risk losing your heart."

The study also found that over a quarter of small firms surveyed believed social responsibility, while an important issue for large corporations, is not relevant to their business.

Only 16 per cent felt that small businesses need to be more socially responsible, and paying local charges, such as council tax, is the main reason firms feel involved in their community.

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