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Small Talk: Fearful firms need more help to grow

David Prosser looks at the challenges and opportunities for small businesses today

Will he put his money where his mouth is? David Cameron's first set-piece speech of the year was to a group of small business owners in Maidenhead, an outing that was meant to underline the Prime Minister's determination – shared by his Chancellor – to ensure that small and medium-sized enterprises are the engine that drives economic recovery. Yet all the evidence suggests that fear continues to hold back many businesses that might otherwise be looking to expand in 2012.

Take credit, that controversial issue where Britain's banks are routinely accused of choking off supply. The Bank of England's latest report on credit conditions suggests that despite their protestations, the banks are indeed failing to lend more to SMEs, with credit availability in the final quarter of last year unchanged from the previous three-month period. Lenders are still being demanding, with approval rates falling slightly at the end of last year and covenants tightening. The Bank's most striking finding, however, is that there has been a sharp downturn in demand among SMEs for credit, with a widespread expectation among lenders that this trend will continue during the first quarter of this year.

Alternatively, take employment, where the Prime Minister hopes SMEs will help in the challenge to find new jobs for those leaving the public sector. Both the Confederation of British Industry and the Federation of Small Businesses have already warned that there is little sign of higher levels of recruitment at smaller companies.

The biggest problem is their nervousness about the state of the economy. A report from RSA, Risky Business, suggests that SMEs have good reason to be fearful: it reckons a third of the country's smaller companies are still being "significantly impacted" by economic slowdown, while one in two believe their ability to grow is being constrained. More than a quarter fear for their long-term viability.

Mr Cameron must confront a chicken-and-egg dilemma. He wants SMEs to deliver the recovery, but too many of these businesses are too worried that there will be no recovery to contribute to the effort.

How then to bridge the gap? Well, one way to get more SMEs onside would be to finally begin delivering the deregulation that the Prime Minister has been promising since taking office nearly two years ago. Just three weeks into the year, complaints about failure to deliver are mounting up. And it has emerged that a job creation scheme, offering SMEs lower NI bills in return for hiring workers, has cost more to administer than it has saved the companies that have taken it up.

Legoland deal clicks into placefor queuing device provider Lo-Q

Alternative Investment Market-listed Lo-Q has won another contract with Merlin Entertainments, which will see its queuing technology installed in the theme park operator's Legoland Deutschland.

Lo-Q is the company behind the Q-bot, a device with which harassed parents at many British theme parks may already be familiar: it enables them to reserve times on busy rides rather than having to spend hours queuing.

The deal is another milestone for Lo-Q, which has had an eventful year. It posted a significant rise in first-half revenues, with full-year results to the end of October, due in a few weeks' time, promising increased profits (its first half tends to be loss-making, with many theme parks shut during the winter months). The house broker, Cannacord, expects an operating profit for the year of £2.5m, up from £2.4m in 2010, and is maintaining its buy rating on the stock.

It has also persuaded JohnWeston, the former chief executive of BAE Systems – and a serial smaller company non-executive – to take over as chairman.

Plus Markets client poached by upstart rival

Competition for smaller companies' listings is hotting up. Three months after it set up shop in the UK, GXG Markets has poached its first member from Plus Markets, a rival exchange for smaller companies.

GXG, a Swedish-based exchange group that hopes to launch a pan-European marketplace for smaller companies, is boasting that Hello Telecom, its latest recruit, will be the first of several Plus companies to switch allegiances early this year.

So far, GXG has picked up 13 companies, but clearly sees Plus, which endured a torrid 2011, as a potentially lucrative source of new business. Plus itself had just over 150 constituents at the end of last year, down from more than 200 a year previously, but has suffered losses.

Olympic hero: Inspiration and hard work will help us to win

Adrian Moorhouse, a former goldmedal-winning Olympic swimmer, is managing director of Lane4, which advises companies on change management, leadership development and employee engagement.

The year has started slowly but we expect a gradual increase in confidence. It feels like an iconic and inspiring year: with the Queen's Diamond Jubilee and the London Olympics, if any year is going to work, this is going to be it.

That said, inspiration is only going to get us so far – we also have to have something practical in place that our market will appreciate. We've been working hard towards preparing for the opportunities presented by the Olympics for more than three years, but I'm focused on goal-setting – where do we want to be in March, where do we want to be when the Olympics begins, and what will we do during the second half of the year?

There is caution out there, but while you might be worried about the day-to-day, you have to plan for the future too, and as a small business you can be agile.