The road ahead for the newly formed Conservative and Liberal Democrat coalition government will be one fraught with difficulties. Most urgently it needs to learn to compromise if it is to guide the economy out of the longest and deepest recession in history.
Throughout the downturn, businesses had to make difficult decisions in order to ensure they survived. Often with support from employees they froze wages, cut working hours and, in the worst of situations, laid staff off.
While firms are more confident about their overall business prospects and the likelihood of revenue growth improving in the coming months, a recent Federation of Small Businesses (FSB) survey showed that the clear majority of small businesses are still running below capacity and plan to keep employment on hold. This illustrates that, although we are technically out of recession and unemployment has shown signs of stabilisation, businesses are still cautious about whether the recovery is strong enough, especially when it comes to taking on more staff.
This will be a tough decision for business managers as the recovery strengthens - do they look to employ new people or reward the people who pulled together to ensure the business survived the recession, through job sharing, taking a pay cut or reducing their working hours? Whatever the decision, it must be made as co-operatively as possible between both employers and employees, to ensure that business morale is maintained.
However, I'm getting a little ahead of myself. There are many challenges which small firms still face before they can take on more staff. The new Parliament will give businesses a different outlook and will give the parties in power the opportunity to support the UK's largest private sector employer - the 4.8 million small businesses that are the lifeblood of the local community and the UK economy.
There are still many challenges which businesses face on a day-to-day basis. Access to finance is a key issue which all businesses struggle with and, at the height of the recession when banks would not lend, many had to resort to using personal savings. We know from past recessions that demand for finance increases during the recovery stage and we hope that the new coalition Government will implement the Small Business Credit Adjudicator so that all businesses get a fair deal when applying for credit.
For businesses, there is much that can be done internally to take advantage of the upturn, however tentative at present. In order to get through the darkest days of the recession most businesses spent time tightening their belts and looking to see where they could cut expenditure to ensure they maintained cash flow and the business ran more efficiently.
All business managers are happy when costs are low and the bank account is in the black. The main complaint I hear from small firms is big business paying invoices late, putting a further strain on cash flow. I know small businesses don't have credit control departments and little time to spare to chase up these payments but by putting tight procedures in place and informing clients of your payment terms, you can ensure you're paid on time.
If your property is rented, check when your rent review is and do your homework to see what other businesses in the area are paying. Shop around for utility contracts too - most small businesses use gas and electricity like a domestic customer so make sure you're getting the best deal at work, just as you would at home.
Business rates are the third highest outlay for small businesses after rent and wages and so it is important to check the rateable value of your property to make sure that you aren't paying too much. Changes to the small business rates system were announced in the Budget meaning 345,000 businesses in England were taken out of the system - a huge relief to small firms, especially those on the high street.
Small businesses are beginning to see light at the end of the tunnel. They are keen to expand and a third of respondents in the FSB Voice of Small Business Survey Panel said they expect their prospects to improve over the next three months.
The easiest way for growth to happen is to attract new customers: perhaps a competitor didn't fare as well through the recession or by expanding into new markets - either at home or abroad. There is a wealth of advice available from local FSB networking events where like-minded businesses can meet and the UK Trade and Investment organisation also offers advice and, if you are looking to export, can put you in contact with the country you are looking to do business with.
Support for the small business community is the best route out of recession. Business managers have made difficult decisions and can now look to reap the rewards in the not so distant future. By ensuring the commitment of staff that supported businesses through the recession is rewarded, the business will in turn thrive as the economy picks up.
CV: John Wright CBE
John Wright is the former national chairman of the Federation of Small Businesses, which represents more than 200,000 small businesses in the UK. Wright was previously a director of Tees Valley Business Link and the Northern Business Forum. He was awarded a CBE in the New Year's Honours List for services to the FSB.