Economic uncertainty and scepticism persist in the small business sector, according to latest findings reported by the first UK Business Barometer and UK Business Advisers Barometer surveys of 2011.
Among the issues polled in the January Barometer, participants cast serious doubt on the coalition government’s view that business will have sufficient capacity to create new jobs lost by public sector workers. April’s preliminary findings suggest government attempts to support SMEs during its first year in power have failed to impress most business owners and managers, and business advisers.
Government advice to SMEs was not well regarded by respondents compared to advice received from private fee-charging organisations in that survey; and latest results indicate the Prime Minister’s promises to reduce “the overall burden of regulation” on business are being met with scepticism.
“These two long-standing quarterly parallel surveys aim to record what entrepreneurs and business owners really think,” says Dr Simon Mosey, Head of the University of Nottingham Institute for Enterprise and Innovation (UNIEI).
“They seek to shed light on how smaller businesses are coping with the current state of the economy, measuring general trading conditions compared with the previous quarter. In the January and April surveys most of those running businesses and the professionals advising them reported no growth and no increase in access to finance, and market demand has seen little or no improvement.
“The surveys also ask ‘trending’ questions which relate to issues of the moment. For example, those business owners and advisers who responded to the first two polls, which opened in January, continue to criticise banks, following the global credit crunch, for offering smaller businesses poor support.”
The full analysis of the first quarter findings for the UK Business Barometer and UK Business Advisers Barometer surveys, whose online polls ran from January to March, asked questions about business advice, fuel and energy prices, support from banks, internet sales, and job creation.
When asked their views on trade with China, more small business people saw China as a threat (53 per cent) than an opportunity (40 per cent), but these views were qualified by open comments in answer to that question. This makes interesting reading. The new UKTI strategy, launched yesterday, pushes for increased export by SMEs, and more trade-focused UK diplomats are to be sent to China.
Advisers were asked for the main issues about which businesses sought most advice. They identified funding, cost reduction, marketing and business development as of major concern. The vast majority of business respondents — 81 per cent — stated advice from private fee-charging organizations was good, whereas only 42 per cent said advice from government organizations was good.
By January, increasing fuel prices were hitting business hard, with 64 per cent stating these were having a negative impact on their business. “Travel expenses are starting to become an issue with fuel prices, and not every client is prepared to move to more ‘virtual’ ways of working”, one said.
Support from banks for small businesses was rated neutral or negative by 75 per cent of business people who responded to the survey. Among advisers, 79 per cent rated it neutral or negative. Almost half of businesses (48.5 per cent) reported that they trade using the internet, but a third (31 per cent) had yet to explore its potential.
When asked about job creation, one business respondent said: “We have/had some key public sector clients; government cuts means these businesses will either no longer exist in 2011, or they won’t have funds to spend on the services we provide... we won’t be one of the private sector businesses taking up the slack vacated by the public sector.
“In my view, the government has not fully considered the impact that these cuts will have on private sector businesses.” And the business advisers were equally scathing. “I cannot understand how the government can make assumptions that the private sector will create thousands of new jobs,” said one.
“I have been a business advisor now for thirty years and […] this is the first time that the Government has not provided financial support for the SME sector. Companies are struggling to survive in this current climate not expand and employ more staff.”
For more detail, visit the Business Barometer websites at www.ukbb.ac and www.ukbab.ac.
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