09 Apr 2010

71% of small businesses in Britain are not planning for post-recession recovery

Quarterly Survey of Small Business in Britain

Quarterly Survey of Small Business in Britain

Research from The Open University Business School has revealed that only one in nine small firms (11%) are implementing post-recession recovery plans. These firms are also the most optimistic about their immediate prospects.

There are contrasting reasons why firms are not planning for the recovery. Some 30% of firms say it is because the effects of the recession have not been very significant for their business, while 18% report that they are not planning because recessionary effects on their actual and potential customers are still too uncertain. The smallest firms are more likely than their larger counterparts to be in a planning quandary, with 24% of those with a turnover below £250,000 feeling unable to plan because of doubts about the future, compared with only 14% of those with a turnover greater than £250,000.

Some 15% of small firms are currently developing their post-recession recovery plans, but 23% do not see the need to bother as their existing plans are already working.

The Quarterly Survey of Small Businesses in Britain, conducted in association with Barclays Bank and the Association of Chartered Certified Accountants (ACCA), found that the challenges now faced by SMEs include a lack of time or capacity (14%) and a lack of skilled employees (11%). These are often problems associated with growth and frequently affect those whose turnover was up over the past year.

Professor Colin Gray, Professor of Enterprise Development, The Open University Business School said “Although there are increasing signs that the economy overall may be turning the corner, recovery remains elusive for the 95% of all firms in Britain that employ fewer than 10 people. This is particularly so for those small firms in the construction and business services sector. As these are two important sectors that strongly reflect the tempo of business life, we may need to be cautious about believing that the recession is over.”

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Open University Business School
The enterprise research team at the Open University Business School publishes the Quarterly Survey of Small Business, which was founded in 1984 as the first national, regular survey of small firms in the UK.

This report is the 101st in the series. Single printed issues of the report cost £50 and £180 for an annual subscription. A PDF version is available by email for £25 per issue or £70 annual subscription. Contact Julie Sullivan:

About the research
The findings have been published in The Quarterly Survey of Small Business in Britain, conducted by the Open University Business School and supported by ACCA (the Association of Chartered Certified Accountants) and Barclays Bank. Now in its 26th year.

The 830 firms that responded to the survey are drawn from two sources – some 232 members of the OUBS small enterprise database of past quarterly survey respondents who responded online; plus some 598 small businesses with a turnover of £50,000 - £1 million drawn from a structured database that reflects the distribution of industries in Britain (this sub-sample was recruited and interviewed by telephone by Continental Research) . The online interviews were completed during January and February 2010 and the first wave of telephone responses were gathered in January and the second wave in February. Sectors covered include: Health & education, transport & travel, retail, hotels & restaurants, agriculture & forestry & fisheries, business services, wholesalers, construction and manufacturing.

The firm-size definition used in the survey is: sole-proprietor = 0 (only the owner); 1-9 = microfirms; 10 – 19 = small; 20+ = medium

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