Wednesday, December 15th, 2004

November's survey investigated panellists' views on Internet Banking, running a business, the New Company Law Bill, continuing membership of the EU, data back up, changes to the retirement age, Profit Margins and whether Business Skills should be a compulsory subject in schools.

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  • About the respondents

    The UK Business Barometer surveys the people running small and medium size businesses. In the November survey, 149 respondents were drawn with the following population characteristics::

    Sector
    Production & Manufacturing Distribution Services Total
    24.8% 9.4% 65.8% 100.0%


    Turnover ()
    < 1 M 1M-3M >3M Total
    72.5% 18.1% 9.4% 100.0%


    Number of Full-time Employees
    1-10 11-20 21-50 51-100 100+ Grand Total
    55.0% 33.6% 5.4% 2.7% 3.4% 100.0%


  • Survey Findings

  • Doubts have been expressed recently that a concern about lack of security may be holding back the growth of online commerce, especially after a number of glitches in internet banks' systems. Despite this 73% of panellists for both this survey and for the UK Business Advisers Survey (UKBAB) use internet banking. Only a small difference in confidence in security between the two sets of panellists was revealed - 32% of UKBB panellists think that internet banking is becoming more or much more secure, compared to 29% from the UKBAB. 23% of UKBB panellists think internet banking security is decreasing compared to 32% from the UKBAB.



    Data security has the two aspects -firstly protecting it from unwelcome breaches by third parties, keeping it confidential, and secondly ensuring that it is preserved and insured against risk. The latter can be a very time consuming and expensive task but the costs of failure are high. Consequently 71% of UKBB and 64% of UKBAB respondents back up either daily or weekly, and only 1% of UKBB and 3% of UKBAB respondents do not back up at all.



    There are many motivations that drive people to start up or run their own businesses, but having done so, have they made the right choice? We asked if running a business is a fulfilling and satisfying way of life, and 72% of panellists said it was highly or reasonably highly satisfying. 83% of Business Advisers responding to the UKBAB survey said the same. However 10% of UKBB respondents said it was not at all satisfying or only slightly satisfying, compared to 3% of UKBAB respondents.



  • 60% of UKBB respondents reckon that running a business is either more stressful or much more stressful than five years ago and 64% of UKBAB respondents agree with them. Only 2% from each survey thought that stress had decreased.



  • The Enron scandal was a focus of attention in 2001 and added impetus to the Government move to review the Companies Act. A new companies bill is now being introduced to give auditors increased powers to compel companies to divulge information and give better access. While 34% of UKBB panellists support this bill, 44% are against it. Amongst Business Adviser respondents, 42% support the bill but 43% are against it.



    In June 1975 the Wilson government held a referendum, having renegotiated the original terms of the UK's entry into the then EEC in 1973. 67% of participants voted 'yes' to staying in. After 29 years following that referendum, 61% of respondents to the UKBB see membership of the EU as affecting UK business positively or at least with some advantages, while 23% think it has some disadvantages or that it actually has a negative effect. Respondents to the UK Business Advisers Barometer are slightly more enthusiastic, with 66% seeing it as a positive opportunity or with some advantages although 22% think it has some disadvantages or has a negative effect.



    With their own direct experiences in business, our panellists would be likely to have developed views on how ready and able school-leavers are to join their businesses and what should be taught to best equip them to do so. 73% of BB respondents and 71% of UKBAB respondents strongly or relatively strongly agree that business skills should be a compulsory subject at school.



    Concerns of the state over the costs of providing adequately for the needs of an increasingly long-lived and aging population continues to fuel debate over the need to change the age of retirement. 66% of UKBB respondents are against raising the statutory retirement age by five years, compared with 62% of UKBAB respondents. UKBB respondents were more closely split on whether a higher retirement age would lead to a greater reluctance to employ mature applicants, with 47% thinking it would, 53% thinking not. Amongst UKBAB respondents, 39% would expect more reluctance to employ mature applicants, 62% would not.



    Profit margins have been under a little less but still substantial pressure over the last six months with 54% of respondents reporting that pressure has increased substantially or a little, a small decrease from last November's 58% in these two categories. 31% this year say that pressure was unchanged, compared to 29% last year, and 14% found that pressure was reduced either a little or substantially, compared with 13% last year.



    Looking forward, a number of respondents are more optimistic. Although the percentage expecting a substantial increase in pressure on profits is about the same as this time last year, the proportion expecting a little increase in pressure has dropped from 47% to 32%. More expect no change in pressure: 46% compared with 24% last year. Fewer expect reductions in pressure on profits, either a little or substantial, 11% this year compared to 20% last year.



    Listed below are extracts from feedback received in Survey BB78 November 2004.

    Comments are listed under sector headings.

    Views expressed are those of individual panellists and may not represent those of the University.

    Production and Manufacturing

    Rising steel and oil prices are the main factors, accompanied with a slow down in domestic demand.

    We are being squeezed between House builders with falling demand seeking lower raw material prices from us and our suppliers seeking big price hikes due to oil costs , steel price hikes and adverse currency movements.

    To relieve EU and Government Regulatory and Financial pressures, we are now Importing INSTEAD of Manufacturing. This has led to major redundancies. We expect this trend will grow in the UK.

    I think the pressure of the minimum wage on small businesses and also the general hidden taxes and charges on energy bills are the main reason for placing pressure on bottom lines.

    Very interesting questions. Thank you

    Retail

    Your backup question is unhelpful because it relates daily backup to high confidence. This is often a misplaced confidence. What is crucial is confidence in what is being backed up and very few businesses have that.

    I also disagree with the wording of your education question. What schools need to do is teach Reading, Writing and Arithmetic, not worry about whether they teach 'business studies' or not. You should be asking us about the basic, in my opinion!