High rents barrier to expansion, say SMEs

Joanne Drake, director for the promotion of SME competitiveness at the European Commission, said SMEs created 10 million jobs between 2002 and 2008 but one third of these have been lost in the past two years.

"We need to get SMEs back to being job generators. We need to give fresh impetus to the Small Business Act, which sets a framework for rejuvenating the small business sector," she said.

She acknowledged the frustrations of entrepreneurs but noted that the EU has a number of services in place to help citizens answer questions about support schemes that are available. Drake also pointed to a report by former Commissioner Mario Monti, which is intended to reinvigorate the single market.

Despite the broad support for SMEs at European level, Drake noted that there are limits to what Brussels can make national governments do.

Miguel Pina Martins, of Science4you, which makes scientific toys, said he knows little about the Small Business Act but wants measures that have an impact on the ground. He said the costs of exporting should be reduced and that the EU should act to ensure that banks lend money to businesses.

Kath Sutherland, of Start (Ability), advises people on starting their own companies. She said setting up a business can be a "bureaucratic nightmare" due to the level of jargon required by the authorities.

Audrius Kavolis, who makes rabbit hutches from wood in Lithuania, believes big fish dominate the business lobby groups in some member states which means smaller voices are not being heard. He would like the EU to encourage small businesses to come together to ensure they benefit from European support. While Brussels says we should 'think small first', member states are still thinking big, according to Kavolis.

Lorenzo Mule Stagno, director of communications firm Business Marketing Services in Malta, said SMEs are struggling for financial and human resources. He also complained that some people are aware of all the EU-backed organisations and support schemes available, but most people have never heard of them.

Sava Marinković, of Serbia's TeleSkin – a medical imaging and diagnositics firm – said it is important that the EU measures how many new start-ups are created by countries and ties this in with access to support.

He said governments should help entrepreneurs to get over the risky start-up stage when it is most difficult to access finance. Marinković also suggested the incentive to start a new venture is low in countries where unemployment benefits are high.

Tuula Antola, of Kaipaus Finland, a company making nanotechnology-based scent products, said the Enterprise Europe Network in her country had been extremely helpful when her company was launched.

George Fantaros of Advanced Medical Waste Management in Cyprus said "bureaucrats don't have a motive to help SMEs" and they are the wrong people to talk about starting businesses.

"How can someone who chose life as an employee teach entrepreneurship? It's a culture clash," he said.

Fantaros added that business schools are training people for jobs in big companies instead of inspiring them to start their own business. He also said it is unfair that small companies must meet the same standards and norms as large companies, which have much more resources to devote to complying with regulations.

Christova Genoveva, of the Ligna Group, a logistics company, said there are so many sources of information that it is hard for entrepreneurs to know where to start. She said it is encouraging to hear of EU plans for market access teams in emerging economies which will help small firms to internationalise their businesses.

Genoveva said late payments remain a major problem but hoped that the Late Payments Directive will help when it comes into force. Her company has had to deal with a late-paying private-sector client in Germany, but found it difficult to navigate the legal system.

"Public authorities can also take up to two years to pay invoices, forcing companies to refinance. This costs us money in the form of interest payments and by the time we are paid, inflation has further eroded the value of the money," she said.

Oľga Apoleníková, who runs a sheep farm in Slovakia, fears big corporations in Europe's food production sector are pushing small businesses out of the market.

According to Apoleníková, ever-more burdensome food safety and quality standards are becoming so strict that small businesses producing fresh food cannot compete.

Igor Tjurin, of Audes LLC, an electronic devices company, said he fears the financial sector bailout will ultimately lead to hyperinflation. He was running a business when Estonia moved into the post-Soviet era and recalls the pressure inflation put on wages and, in turn, the impact this had on small businesses.

Steven Emanuels of SAM sportswear said positive media coverage is an important part of raising the profile of entrepreneurs and has a major influence on the public perception of businesspeople. However, he noted that some media outlets are not always interested in positive news stories.