General
12 Feb 2013

SME study identifies a hardy ‘one in ten’ who claim to have no business problems

A new study from The Open University suggests that, despite continuing economic concerns, a hardy group of SMEs may be bucking the trend. One in ten of firms report that they were not experiencing any of the most common business problems. However, the economic climate and its negative impact on demand remains by far the 'top' business problem, identified by more than a third (38%) of respondents.

The Quarterly Survey of Small Business in Britain*, produced by The Open University (www.open.ac.uk/quarterly-survey) supported the ACCA (The Association of Chartered Certified Accountants) and Barclays Business Banking also found that overall performance is largely unchanged from the previous quarter, with a slight decline in the proportion of firms that have seen their sales improve over the same quarter in 2011.

Manufacturing SMEs saw an overall decline in their sales and employment performance, while SMEs in the transport and retail sectors reported the weakest results. The East Midlands was the strongest region in terms of sales and employment but elsewhere there were fewer positive signs, as compared to the previous survey.

On balance, SMEs in the UK continue to anticipate an overall improvement in sales performance over the third quarter. Firms in the £1m to £5m turnover band are most optimistic about their sales, while the smallest firms are most pessimistic. SMEs in the wholesaling sector are the most optimistic on sales, by a large margin, while manufacturing is once again the sector that anticipates continued growth in average employment. SMEs in the East Midlands do not expect their recent growth trend to continue. By contrast, many firms in London expect to see strong growth in both sales and average employment.

Commenting on the study, Professor Rebecca Taylor, Dean of The Open University Business School, said: “The latest findings show us that some firms are proving more resilient than others in the face of very tough trading conditions.” She added: “We already know that firm size, sector and region are important influences on firm performance. This study highlights just how critical it is for us to take a much closer look at the skills and capabilities that SME owners and managers need if they are to keep their businesses on track in these challenging times.”

Sue Hayes, Managing Director of Business Banking said: “It is challenging environment out there right now for SMEs but despite this there are still many opportunities to be seized upon. The ability to make those important decisions at the right time is vital to the growth of all businesses and the overall UK economy. It is critical that SMEs seek as much help as they can from their bank, accountant, trade organisation and even other business.”

ENDS

Notes to editors

(*) The full survey is available as a free PDF download at: www.open.ac.uk/quarterly-survey.

Single printed issues of the report can be purchased for £55, or £200 for an annual subscription. A PDF version of the report is available to download free from The Open University website. For more information, please contact the survey administrator, Julie Sullivan at: oubs-enterprise@open.ac.uk or visit www.open.ac.uk/quarterly-survey

For media enquiries, please contact Rachel James, Media Relations Officer on rachel.james@open.ac.uk or 01908 653343. For out of hours enquiries please call 07901 515 891


About the Quarterly Survey of Small Business in Britain
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. The report is now in its 28th year. The 1,043 firms that responded to the survey are drawn from two sources: 158 firms from the Open University Business School small enterprise database of Quarterly Survey respondents who respond to an online questionnaire plus 885 firms recruited and interviewed by telephone by BDRC Continental. The telephone sample comprises small and medium-sized businesses with up to 250 employees, drawn from a structured database that reflects the sectoral and regional distribution of industries in Britain. Further details are provided in the report. The online questionnaires were completed during October and November 2012. Telephone interviews were carried out in two waves (1st and 15th October and 5th and 12th November). Industry sectors covered include: health & education, transport & travel, retail, hotels & restaurants, agriculture & forestry & fisheries, business services, wholesale, construction and manufacturing. The firm-size definition used in the survey is employee-based: owner-only = 0 (just the owner); 1-9 = microfirms; 10-49 = small; 50-249 = medium. Following the well established practice of the CBI in its Industrial Trends Survey, a summary statistic, the balance, is used to monitor the responses to key questions. The balance is the percentage of respondents replying ‘up’ minus the percentage replying ‘down’ (we ignore, for this purpose, the percentage replying ‘same’).


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