Wednesday, November 16th, 2004

October's survey asked for panellists' views on the 'single most important problem' confronting their business, then on aspects of red tape: new dismissal rules, the increase in the National Minimum Wage, premises and Disability Discrimination legislation and the use of government e-services, also annual sales and potential oligopsonies, businesses' reactions to unsolicited phone calls, crime against businesses and discussing business matters with other small business owners/managers.

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  • About the respondents

    162 respondents were drawn with the following population characteristics:

    Production & Manufacturing Distribution Services Total
    25.3% 8.0% 66.7% 100.0%

    Turnover ()
    < 1 M 1M-3M >3M Total
    72.2% 17.9% 9.9% 100.0%

    Number of Full-time Employees
    1-10 11-20 21-50 51-100 100+ Grand Total
    59.3% 27.8% 6.2% 3.7% 3.1% 100.0%

  • Survey Findings

  • This month we took a look at views of "the single most important problem" for smaller businesses. We asked panellists to choose their own perceived most important problem from our list. Red tape came out third with 15%, below market conditions, 30% and time pressure, 24%. In our parallel survey of Business Advisers, the UKBAB, we asked Advisers what the most important problem facing business is - in the UKBAB survey red tape came out top with 25%.

    One aspect of red tape which has been increased this month is the requirement to comply with new dismissal rules. This was introduced in an attempt to reduce the number of cases claiming unfair dismissal being brought to the industrial tribunals. The government has introduced a new 13-step procedure requiring employers wishing to terminate an employee's contract to hold several meetings with the individual concerned before taking action. However 50% of UKBB respondents and 56% of UKBAB respondents believe that the new process is unlikely to encourage parties to resolve their disputes more efficiently, while only 18% of UKBB and 22% of UKBAB respondents are highly or moderately highly convinced it will provide that encouragement. At the same time, 37% of UKBB and 30% of UKBAB respondents think it will actually lead to more claims, while those believing that less claims will result are only 20% of UKBB but 31% of UKBAB respondents.

    The National Minimum Wage was set to increase from 1st October 2004 but this will deter relatively few survey respondents from recruiting younger staff: 14% said it would make recruitment of younger staff significantly or relatively significantly less attractive, while 27% said it would not make recruiting younger staff at all less attractive. This question was not applicable to 30% of respondents. On wage differentials, 51% found the question not applicable, but of those who were eligible to respond, less than a third will increase higher paid staff's wages to maintain differentials.

  • The final rights of access provisions of the Disability Discrimination act also came into force on 1st October but so far only 9% of respondents have made changes to premises, although 46% say they do not need to make any changes.

  • Electronic tax returns and other e-services offered by government have been developed and improved over recent years, and take-up is now at 30% to a high or moderately high extent by respondents to the UKBB, although 48% either do not use it at all, or only to a small extent. Respondents to the UKBAB think that their clients use it less, with only 9% thinking that clients fall in the top two categories of using it highly or moderately highly, while 55% think that clients do not use it at all, or only to a small extent.

    The May survey asked for views on the plan to extend the Telephone Preference Service to corporate registrants. This month the surveys explored views on making and receiving unsolicited phone calls, by both Businesses and Advisers. With respect to making unsolicited phone calls, the Survey revealed that 32% of respondents consider cold calling as a successful method of finding new customers, while 20% perceive it as a last resort. 49% don't need to recruit customers this way for their businesses. Advisers are more evenly divided: 28% in favour of cold calling, 27% would only use it if other methods have failed, and 46% say it is unnecessary for their business. As regards receiving unsolicited calls, while 37% of UKBB respondents either welcome or tolerate them compared to 49% UKBAB respondents, 33% of UKBB respondents detest them compared to 20% of UKBAB respondents.

    Dependence on a single or few customers can be a market characteristic (oligopsony), or a deliberate strategy but can also increase business risk. None of the UKBB respondents are dependent on a single customer but 15% sell over 50% of output to their main customer and 19% sell between 25% and 50% to a single customer. 20% have less than 5% go to a single customer. The UKBAB survey showed that 71% of responding Advisers believe that over reliance on a single or few customers is a highly or relatively highly significant problem confronting their customers.

    Business crime has featured recently in several reports and prompted a question about perception amongst our panellists. 46% of Business Barometer respondents believe that business related crime has increased either significantly or slightly over the past five years, compared with 50% of Business Adviser Barometer respondents. Close to half of the respondents to both Surveys think it has stayed broadly the same, and few believed there has been any decrease.

    Business networking has been shown in several surveys and studies to be a supportive means of providing contacts who will offer each other help and information. Two thirds of UKBB respondents discuss business matters with other small business owners or managers either monthly or even more frequently, but 11% never do. This contrasts with Advisers responding to the UKBAB - 88% of them talk to other business advisers monthly or more often.

    Listed below are extracts from feedback received in Survey BB77 October 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

    I have had no information on the new 13 step procedure for dismissals. If it is a Government issued procedure why has it not been advised to every employer?

    We are undergoing research into the possible replacement of our old (but hard working) integrated accounts/stock control system. This is proving very complex. I would like to know how other SMEs tackle this issue. Perhaps a survey on computer accounts and how a company's selection process works.

    Business Services

    In completing your survey I wanted to comment on telephone cold calling. If the call is highly focussed on the likely needs of my particular business then I am happy to receive it. However, I receive repeat calls from organisations in which I have no interest. This makes me angry ! Competence, focus and brevity make cold calling acceptable.

    The only reason that I discuss business matters with other small businesses so frequently is that I serve on the local LSC. I rarely derive benefit for my own business from these discussions.

    This set of questions had a meaning to my company .A lot of the other question did not affect my company.


    Question 1 - should have had another reason - other to which I would have added maternity leave as 30% of my staff are currently on 12 months maternity leave!!


    I think a good question would be since the rise in the minimum wage how is this going to effect the number of staff employed?


    Q7 - On-line system is very poor, labourious and does not perform simple tasks. A total waste of time, money and effort (mostly ours!)

    Spam is by far my biggest concern. I regularly receive 20 e-mails a week that are either viruses or someone trying to defraud me by getting bank or other details. A custodial international penalty is required and examples made of at least 20 people/organisations.