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.”
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: firstname.lastname@example.org or visit www.open.ac.uk/quarterly-survey