SME business barometer: August 2011
August 2011 report on a series of surveys among small and medium-sized (SME) employer enterprises across the UK. The survey assesses how well or badly small businesses are performing, their needs, concerns and barriers to growth. Highlights changes in the findings between the waves of the Business Barometer, and the larger small business surveys, that are statistically significant.
Growth:In levels similar to February 2011 and December 2010, 26 per cent of SME employers in August 2011 were employing fewer staff than 12 months previously. Sixty per cent had the same number of staff as 12 months previously (compared with 58 per cent stating this in February 2011); and 14 per cent had more staff than 12 months previously (compared with 15 per cent stating this in February 2011). The trend over the previous year indicates a greater degree of stability in employment levels.
Expectations of staffing levels over the next 12 months have remained relatively static since September 2009. In August 2011, 25 per cent of SME employers believed that in a year's time they would be employing more staff than currently. This compares with 61 per cent who believed employment levels would remain stable, and 14 per cent who believed there would be a decrease in employment levels.
In August 2011 30 per cent of SME employers saw an increase in turnover in the previous 12 months, compared to 34 per cent stating their turnover had decreased. For 36 per cent turnover was about the same as it was 12 months previously. This last figure represents the greatest proportion of employers stating their turnover levels are the same as 12 months ago since ASBS 07/08., and overall the trends suggest stabilisation of turnover levels.
Looking ahead, SME employers that participated in the August 2011 Barometer were more likely than in the February 2011 Barometer to have felt that their turnover in 12 month's time would be the same (46 per cent, compared to 37 per cent in February 2011). Thirty-one per cent felt their turnover would be higher in 12 months time than currently and 21 per cent felt it would be lower.
Obtaining finance was the second most frequently mentioned main obstacle (in a five percentage point raise since February 2011, it was mentioned by 12 per cent of SME employers). The next most frequently mentioned obstacles were taxation, cashflow, competition and regulations.The state of the economy was felt to be main obstacle to success by 45 per cent of SME employers in August 2011. Although this is not a significant increase on February 2011 and February 2010 (both 39 per cent), it is a higher proportion than that seen in any other Barometer.
Focusing more closely on cashflow issues, 42 per cent of employers mentioned this as being an obstacle to the success of their business (and eight per cent said it was their main obstacle). Among those who saw cashflow as an issue, 80 per cent mentioned a fluctuating income combined with steady outgoings as being a cause of this difficulty. The next most common causes of cashflow issues were late payment from other businesses (58 per cent) or from other customers (58 per cent).
Access to Finance:
Access to Finance:Sixteen per cent of SME employers had sought external finance in the 6 months prior to the August 2011 Business Barometer - a significant decrease on February 2011 (when this figure was 21 per cent).
Among those who had sought finance in the six months prior to August 2011, the most common type of finance sought was a bank loan (sought by 35 per cent of those seeking finance) followed by a bank overdraft (23 per cent), leasing/hire purchase (17 per cent) and a grant (11 per cent).
The most commonly mentioned reasons for seeking finance were acquiring equipment or vehicles (mentioned by 38 per cent of those seeking finance), to gain working capital or cashflow (38 per cent) and to buy land or buildings (10 per cent).
Eighty-one per cent of those who had sought finance in the six months prior to August 2011 took some kind of action to try and ensure they would be likely to succeed in their application. Among these employers 66 per cent had ensured their business plan was up to date (which was significantly higher than February 2011 when 22 per cent had said this). Forty-eight per cent had received advice from their bank, and 30 per cent had sought advice from other businesses.
Forty-eight per cent of those seeking finance experienced any problems obtaining it from the first source approached: 37 per cent were unsuccessful in accessing any of it, five per cent obtained some but not all of it, and six per cent obtained the finance but with some problems. Forty-nine per cent had not experienced any problems obtaining finance. In terms of next steps taken after being unsuccessful in accessing finance from the first source approached, 35 per cent of these employers obtained finance from another source.
Among employers who had sought finance in the 6 months prior to August 2011, 21 per cent were unable to access it from any source approached (equating to four per cent of all SME employers).
Among those who had not sought finance in the 6 months prior to August 2011 74 per cent said they had not done so because they did not require finance. Thirty-one per cent did not want to take on additional risk, 14 per cent thought it would be too expensive, and 10 per cent were deterred because they thought they would be rejected.
Business Support:In the August 2011 Barometer 42 per cent of SME employers had sought external advice or information on matters affecting their business. In the SBS 2010 (when this question was last asked) a significantly higher proportion of employers (49 per cent) said they had sought this type of advice.
Among those who had sought advice in the last year, 51 per cent had sought financial advice, 18 per cent had sought advice on business plans or strategy, 13 per cent each had sought legal advice or marketing advice, and 12 per cent had sought advice on tax or national insurance. Sixteen per cent of SME employers had used a business mentor in the last year.
In terms of awareness of Government business support, 90 per cent of employers were aware (prompted) of at least one kind of government business support. The Business Link website was the support service SME employers were most likely to be aware of (73 per cent). Sixty-seven per cent were aware of Local Enterprise Partnerships (LEPs), and 27 per cent each were aware of government guaranteed loans or Solutions for Business. However, with the exception of the Business Link website and LEPs, few had made any use of Government business support services.
Source: SME business barometer: August 2011