About the respondents
The UK Business Barometer surveys the people running small and medium size businesses. In the November survey 132 respondents were drawn with the following population characteristics:
| Sector |
| Production & Manufacturing |
Distribution |
Services |
Total |
| 26.5% |
9.8% |
63.6% |
100.0% |
| Turnover (£) |
| < 1 M |
1M-3M |
>3M |
Total |
| 78.9% |
18.9% |
12.1% |
100.0% |
| Number of Full-time Employees |
| 1-10 |
11-20 |
21-50 |
51-100 |
100+ |
Grand Total |
| 60.6% |
25.0% |
7.6% |
3.8% |
3.0% |
100.0% |
Survey Findings
In HM Treasury's December 05 pre-budget report it was stated that in the long run continued economic growth depends on enhanced productivity, and - as the pace of economic transformation quickens - on the flexibility of the UK economy to respond to changing global markets and trade. The opening questions in the December UKBB Survey focused on business exports and supply imports. In particular, Regional Development Agencies place significant emphasis upon increasing export activity. 53% of respondents to the UKBB either already export their goods and services or plan to do so:
We asked panellists what they considered to be the three main constraints discouraging smaller businesses from exporting, and we also asked the same question in the sister Business Advisers Barometer (UKBAB). The three issues which emerged as the most commonly held main constraints from the UKBB respondents were Lack of experience, the nature of the product and its market, and lack of awareness of export opportunities and potential. The UKBAB respondents agreed with lack of experience and lack of awareness of export opportunities and potential, but payment concerns emerged third.
We then asked about sourcing supplies and found that 10% of UKBB respondents source more than 75% of supplies from overseas, and 19% source between 25% and 75% from abroad.
Next October (2006), subject to Parliamentary approval of the draft legislation, will see the implementation of an extension to Employment Equality Regulations which will bring age discrimination into line with laws on sex and race discrimination in employment and training. The new regulations will not only bar unfounded age discrimination in employment and vocational training but will also require employers who set their retirement age below the default age of 65 to justify or change it, will introduce a new duty on employers to consider an employee's request to continue working beyond retirement and will close a number of other age-related loopholes.
Panellists were asked how aware they are of these regulations and how they might impact on their businesses, and panellists of the UKBAB were asked how aware they think their clients are of both the new regulations and the impact on their (the clients) businesses. There were marked differences between the two sets of responses, with 46% of UKBB respondents saying they were either totally aware or reasonably aware, while 37% were either totally unaware or nearly unaware, after adjusting for those responding 'not applicable'. The UKBAB survey results showed that only 15% of respondents to that survey thought that clients were either totally aware or reasonably aware, while 63% believe that clients were either totally unaware or nearly unaware.
Management styles obviously vary, and different styles may be more suited in different situations. Among the respondents to the UKBB and the UKBAB, both of which surveys posed the identical question, there was agreement that the style thought to be most effective by the greatest numbers was 'Consensual', with UKBB respondents voting 'Target Driven' second while for UKBAB respondents 'Pragmatic' came in second place.
Stock levels are still fairly stable compared to a year ago - 52% of respondents are holding the same level (in December 2004 it was 71%), with 29% holding higher or much higher levels and 19% holding lower or much lower levels, after adjusting for those responding 'not applicable'.
The December survey investigated what respondents feel to be the main source of concern or worry for their businesses. Respondents were only allowed a single choice for their response, and although 24% cited competition as the main source, 29% felt that there was another source not included in the list of options. Government regulations came in third, with 22% rating this as main source of concern. UKBAB participants were asked what most concerns their clients and 37% of respondents selected Government regulations, while 22% opted for late payments.
Constraints on business due to skill shortages stayed at the September level and those due to lack of finance decreased on average during the last quarter.
Businesses with turnovers of £1M - £3M experienced increases in constraints due to skill shortages, as did businesses in the service sectors, other sectors experienced decreases. Constraints due to lack of finance increased among firms with turnover of £1M - £3M but fell for those with <£1M and also across all activity sectors.
Constraints due to low market demand increased across the middle (£1M - £3M) and upper (>£3M) ranges of turnover. They also increased in the Production and Manufacturing and Distribution sectors, but decreased in the Services sector. The overall average constraint index edged upwards by just over 1%.
Average growth in the last quarter picked up a little compared to the previous quarter across the lowest and highest ranges of turnover, but only in the services sector. The overall average increased a little in the three month period, in line with the seasonal pattern.
Overall, respondents expect positive growth in the next quarter but at a slower pace than they expected three months ago.
Listed below are extracts from feedback received in Survey
BB91 December 2005.
Comments are listed under sector headings.
Views expressed are those of individual panellists and may not represent those
of the University.
Business Services
Small businesses doing well have no incentive to get involved in export markets. Investigating export markets entails substantial investment and risk is hard to assess. In most cases small businesses will seek to expand their domestic market share before even considering export markets. In our case the customer approached us and underwrote most of the risk.
Biggest business issue I have is cashflow. Sales aren't such a big problem.
We have answered as a service company with significant export markets - approx 50% of our business. Communication would be foremost in our concerns for work in the Far East, but we work mainly in North America. Payment has never been a problem there, but terms of payment with US companies can be 90 days, which will not accept.
We are a training provider. We are trying to get LSC recognition as we have a niche market that has been identified as a skill shortage. The local LSC does not want to register any new providers and only wants to deal with colleges - who are not efficient on business delivery.
Q5 (Management Style)
This is entirely situational. Each of the styles is effective in particular circumstances. One of the problems we have with managers is that many think that they are only one style and use it all the time, even when it is inappropriate.
Main causes for worry about my business are finance and finding new clients. The increase in numbers of companies joining the CTPS scheme (Telephone Preference Service) has reduced the ability of arranging meetings with MDs by telemarketing companies. It is not the only way of finding new clients but it was successful.
I was forced to answer Q5 (Management Styles) but there is no preferable style. I believe style needs to me matched to situation e.g. autocratic may be right in an immediate emergency whilst not if trying to improve a process.
EC is trying to turn SMEs into state regulated businesses and putting to much red tape on us. Only this year had accounts accepted by the Revenue and Companies House without needing an accountant to do them.
Production & Manufacturing
Volume exports hampered by excessive competition from low cost countries,
overseas competition.
Other
As we provide on-site service we cannot export that service, although we do sometimes sell spares abroad.
