AS George Osborne prepares to deliver his Budget on March 21, an entrepreneurial human resources specialist calls for the Chancellor to cut the VAT rate from 20% to provide the kind of boost that is needed by the small businesses that he is relying on to create jobs.

Name: Margery McBain

Age: 49

What is your business called? Gravitate HR

Where is it based? Edinburgh.

What services does it offer? Outsourced human resources support and HR consultancy.

This means that we effectively become the HR department of a range of businesses and organisations.

We also offer advice and support on all the issues that arise as a result of an employment relationship and undertake specific HR-related projects and consultancy assignments.

To whom does it sell?

Small and medium-sized organisations in the private, not for profit and public sector. Our client list includes Osprey Holidays, Rettie & Co and SeeByte within the commercial private sector; and Centre for the Moving Image (Edinburgh International Film Festival and Filmhouse) and Royal Highland and Agricultural Society of Scotland in the charitable sector.

What is its turnover?

£300,000

How many employees?

Seven

When was it formed?

2006

Why did you take the plunge?

I was looking for a new challenge and I had a desire not to be an employee again, as I had worked for large organisations and I decided that it was time that I did it for myself. I was brought up in a family business and understood what it meant to be self-employed.

My father ran a shoe retailing business near Glasgow. He established the business on the principles of excellent customer care, good quality, product choice, and building a good team.

I felt it was time to put all that experience to good use and see if I could make the business model of outsourced HR work in the SME market.

What were you doing before you took the plunge?

Over the years I have worked for John Lewis Partnership, Dixons, Eglinton Management Centre and University of Edinburgh. My last paid job was as head of HR for Jenners (the venerable Edinburgh department store).

Working at Jenners was like working in a very large extended family – it was then owned by a family, with many family relationships in the business and a very wide spread of interests.

I was fortunate to have a considerable degree of independence in developing and managing the HR function and took full opportunity to implement and develop a number of HR initiatives working directly with the MD and board of directors; this gave me terrific HR management experience.

No two days were ever the same and like all family businesses I got involved in general management issues from being duty manager, to serving customers at clearance, counting buttons at stocktaking and advising and implementing strategy.

How did you raise the start-up-funding?

It was all self-financed as my father had made an investment for me many years previously. It seemed like a good use of that money and I thought that it could potentially be a better return on the investment.

What was your biggest break?

Our first contract. I got a telephone call from a potential client, Simon Rettie of Rettie & Co (property specialists), who also had office space to rent. It really helped get the business off the ground and he has been our client ever since.

More recently we have been awarded our first public sector contract to provide a HR helpdesk and support to Scottish governing bodies of sport through sportscotland.

This has given us 50-plus clients in one contract and the opportunity to contribute (albeit indirectly) to the development of sport in Scotland.

What was your worst moment?

Signing off my first year's accounts, which were awful despite putting in a huge amount of effort and hard work. It was disheartening but I had to dust myself down and look to the sales pipeline to ensure that year two was more positive – which thankfully it was.

What do you most enjoy about running the business?

The variety and diversity of running a small business that has to be very hands on.

From writing PR articles, managing the team, business development, building client relationships and paying HMRC!

The most rewarding part of the job is building the team, sharing the experiences and developing a culture within the business.

What do you least enjoy?

The red tape and administration that can strangle a small business.

I recognise that having good processes in place is important to ensure the business is compliant and that you have access to appropriate management information – but it can take up a lot of precious time and it is not very exciting.

However, as a business owner, the bottom line is that I am responsible for administration and compliance.

What's your biggest bugbear?

20% VAT: it is adversely affecting spending and business growth.

In addition to this, small businesses are administrators on behalf of HMRC which is far too time-consuming and diverts attention away from doing what we do best – servicing our clients.

What's your ambition for the business?

Having the right size of team is crucial, as working in a close-knit environment is very important to what we do and the relationship we have with our clients.

I have a view that rather than growing the size of the team too large, we should increase the number of teams with a geographical spread including Glasgow, Perth and Aberdeen.

I would also like to develop more technological solutions to support HR management, which will give access to real time information, guidance and support and integrate into our GRACE portal. Finally, I would like to continue to build our reputation for specialist HR consultancy by becoming experts in dispute resolution and dispute prevention.

What are your top priorities?

Client care, delivering quality services, keeping our practice leading edge and running a tight ship.

We have to keep our proposition fresh and innovative in order to retain our existing clients, to attract new clients from different business sectors and to differentiate ourselves in the marketplace.

This year we have introduced an online portal called GRACE through which clients can access their own site, which contains their most up to date employment related documentation.

The Gravitate HR team are pivotal to the business. They represent the business and we are judged by what we deliver.

What could the Westminster or Scottish governments do that would most help?

They could introduce tax breaks to allow businesses to retain more profits to be used to fund growth and expansion – especially for small businesses which have to manage all aspects of business development, manage internal growth and underwrite risk of new ventures.

What was the most valuable lesson you've learned?

You are only as good as your team.

In the past I have made the wrong decisions about team members and have learned to deal with that very quickly and decisively.

The chemistry of the team is really important and if there is a relationship that is not right it can really spoil the atmosphere.

How do you relax?

I walk. I love to put on my walking boots, choose a circular route and step out for 10 miles or so, irrespective of the weather. I just love being outdoors and having some space.

I also enjoy spending time with my three children, talking, cooking a tasty meal, and listening to their yarns (most of which are quite imaginative).