About the respondents
The UK Business Barometer surveys the people running small and medium size businesses. In the May survey 159 respondents were drawn with the following population characteristics:
|Production & Manufacturing
|< 1 M
|Number of Full-time Employees
UKBB panellists have hands-on, experience-based views about the conditions in which they would prefer to operate their businesses. Panellists were not offered 'a stable economy' as an option as this was rather taken as read! From the options that were offered, over a third of respondents viewed good financial/taxation incentives for investment as the most important condition for stimulating business, while 28% thought that low interest rates are the most essential. The third most accepted choice was a low administration burden. R&D; tax credits and tax incentives for training were the conditions least chosen as most important, both with a share of 5% or less.
A similar question was asked of panellists in the parallel UK Business Advisers Barometer May Survey (UKBAB, 177 respondents), and in that Survey respondents placed a low administration burden as most chosen option (29%), followed by good financial/taxation incentives for investment (25%) and then low interest rates (20%).
There have been recent reports that online purchasing by consumers is growing much faster than store purchasing, and B2B sales websites are proliferating. It has been suggested that consumer web sales have grown far more rapidly than those to businesses. The responses to our questions, identical in both Surveys, by respondents to the UKBB and to the UKBAB tend to bear out this suggestion, since a higher percentage of respondents to each Survey make purchases for personal use than for business use to a high or moderately high extent.
36% of UKBB and 39% of UKBAB respondents make purchases for their businesses online to a high or relatively high extent, while 47% of UKBB and 50% of UKBAB respondents make personal purchases online to a high or relatively high extent.
18% of UKBB respondents have, to a high or relatively high extent, considered reducing staff hours, cutting jobs or reducing job recruitment. Of this group, 86% came from the two smallest categories of employers: 55% are respondents employing 10 or less full-time staff, and 31% employ 11 - 20 full-timers. 47% of all respondents have not considered this at all and 21% of respondents found this question was not applicable to them.
The business advisers were asked to what extent the advent of the National Minimum Wage and its gradual increase prompted their clients to similar considerations. The UKBAB Survey finding was that 17% said that clients have, to a high or relatively high extent, considered reducing staff hours, cutting jobs or reducing job recruitment, while 27% said that clients have not considered doing so.
Another likely impact on staffing and costs is the expected ending to the optional opt-out from the working time directive. 38% of UKBB respondents would have their businesses highly or relatively highly affected by this, and 21% of UKBAB respondents would also have their businesses highly or relatively highly affected. However, 37% of UKBB respondents and 49% of UKBAB would not be affected at all.
Many respondents to the UKBB work well above average hours themselves, with only 23% working less than 40 hours per week, 38% working more than 50 hours. Most respondents to the UKBAB come out at slightly lower hours, with 27% working less than 40 hours per week and 36% working more than 50 hours.
In spite of the long hours regularly worked by many, the majority of respondents to the two Surveys are careful to achieve balance with family commitments /events. 61% of UKBB respondents assert that they rarely or relatively rarely cancel or miss out on family commitments/events, and 64% of UKBAB respondents say the same. However, 20% of UKBB respondents confess to cancelling or missing these frequently or relatively frequently, as do 17% of UKBAB respondents.
Bank holidays are often a time when families arrange to have meetings and events, and 69% of respondents to the UKBB give these as leave over and above the minimum statutory entitlement, but 6% do not.
Economists at ABN Amro warn that the UK economy may be heading into recession and estimate that 500,000 Britons will lose their jobs in the retail, manufacturing and construction sectors by 2008.
19% of respondents to the UKBB have developed contingency plans to high or relatively high extent against this possibility, while 42% of UKBAB respondents advise their clients about this kind of contingency planning, to a high or relatively high extent.
A new term, Alterpreneur, has recently been defined. Recent research found that alterpreneurs, not entrepreneurs, are the bedrock of Britain's small business community. Alterpreneurs are seen to be motivated primarily by a comfortable work/life balance as opposed to the entrepreneurs' focus on growth and commercial success. The UKBB Survey asked respondents where they would place themselves on a scale of 1 to 5 from alterpreneur to entrepreneur. 49% came out nearer the alterpreneur end of the scale, at position 1 or 2, while only 27% see themselves as more wholly entrepreneur, at positions 4 or 5.
The parallel Business Adviser's Survey asked what proportion of Adviser's client base is motivated to be more alterpreneurial than entrepreneurial. While 27% of respondents said that over 50% of their clients are primarily motivated by lifestyle considerations, 24% said that less than 20% were so motivated.
27% of UKBB respondents find that cheque processing delays are a problem to a high or relatively high extent, while 20% of UKBAB respondents find the same thing. We also asked UKBB respondents if the situation was getting better or worse and 73% think there is no change, while 25% think it is getting worse.
Although we asked about delays in processing of cheques in the May Surveys, comments submitted by respondents indicated that there are also other areas of major, irritating and potentially costly delays in money transfer for smaller companies, such as online bank transfers, and card settlements.
Listed below are extracts from feedback received in Survey
BB84 May 2005.
Comments are listed under sector headings.
Views expressed are those of individual panellists and may not represent those
of the University.
Cheque payment is becoming a thing of the past. Plastic for retail and BACS for business.
Q 11 (Cheque payment) - The biggest problem is getting clients to pay on time or anywhere near time.
Production & Manufacturing
Economic importance. Stable economy is first priority but not offered as a choice.
Work/Life balance & hours worked. I never miss any family event in favour of work or anything else (my wife & 5 children are my key priority). I do 30 contracted hours but work for 4 companies (chairman), on a government body (SSP Chair), a charity , a local church (leadership role) and am setting up a youth cafe scheme in the town centre. The total hours for this substantially exceed 40hrs.
The principal problem in processing cheques stems from cheques received in euros from Irish customers. The delay in getting cleared funds is too long and the negotiation fee too high.
Internet payments are becoming more popular yet they can take 2 or 3 days to clear. In Sweden it takes 2 hours.
Red tape will kill UK business
It is the general employment legislation (e.g. maternity and paternity leave) that has stopped me recruiting, rather than the National Minimum Wage.
Thank goodness sole traders who get paid by bank transfer can still work 100 hours a week when we want to!
'Buying on line' is meaningful for consumer purchases. For business purchases it covers too wide a range of procurement activities. It would improve the survey if the different uses of on line technology in the procurement process were explored in more detail.
Spam is my biggest company problem. People posing as one thing to get money by fraud. The government needs to devote time and effort to eradicate it with some stiff jail sentences.
I'd like to ask if others are troubled, as I am, by some banks taking up to four working days to process a simple online bank transfer. In these times of instant electronic data transfer (such as mobiles, SMSs, emails etc.) it smells of banks dragging their feet so that they can earn another day or two's interest using my funds. It's highly inconvenient when I need to have funds available in a hurry by a certain date.