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Small Business Survey 2012
Focus on New Businesses
May 2013
Survey details
• Small Business Survey 2012– 5,723 CATI interviews with SME business owner/managers, June to
September 2012– Sampled and weighted to 2012 BPE– Main report is based on SME employers only
• Themed analyses– No employees (report/presentation)– Wales, Northern Ireland (reports)– Exporting (report)– Social enterprises (report)– Credit risk analysis (report)– Family businesses (report/presentation)– Business support (presentation)– Access to finance (presentation)– Growth (report/presentation)– New businesses (presentation)– Mentors (presentation)– Manufacturing (report) 2
Presentation outline
• Profile of new businesses
• Business performance
• Growth
• Business capability
• Access to finance
• Obstacles to business success
• Business support
• Working for the public sector 3
4
Profile of new businesses
5
Definition of a new business
Based on one question:• A6) How many years has this firm been trading?
This includes under all ownerships and all legal statuses
– If trading up to three years, they were classified as a new business
11% of SME employers were new businesses; 7% in SBS 2010
3% were aged up to one year;
as in SBS 2010
6
How did new businesses differ from established businesses in terms of profile?
• They were smaller businesses:– Micros (1-9): 94%; 82% established businesses– Small (10-49): 6%; 16%– Medium (50-249): 6%; 3%
• They were more likely to be single site organisations (90%; 87% of established businesses)
• They were more likely to be private limited companies (58%; 51%), to be sole proprietorships (31%; 26%) and less likely to be a partnership (4%; 13%)
• They were less likely to be family businesses (52%; 63%)
• They were less likely to have registered for VAT (69%; 79%)
• They were less likely to have made a profit or surplus in the last financial year (61%; 73%)
7
Sectors with the highest concentration of business start ups
Base = all SME employers
8
Leadership
• New businesses were more likely to have just one partner/director (57%; 44% of established businesses)
• Although less likely to have any female partners/directors; they were more likely to be women-led (27%; 18%)
• They were more likely to be MEG-led (11%; 7%)
Starting a business: reasons/motivations
9Unweighted base (where involved with decision to start up business) = 236
• Main motives re: business opportunity:• Greater independence/own boss (29%)• Increase personal income/more money (29%)• Passion/challenge (27%)
• Main reasons re: no better choices:• Found no job suiting skills (27%)• Took redundancy (15%)• Poor working conditions in previous job (15%)
10
What would have made it easier to start the business?
Unweighted base (where involved with decision to start up business) = 236
11
Business performance
Numbers employed compared to 12 months ago
• By size, new businesses were more likely to have increased their workforce than established businesses in each size band; – Micro (33%; 15%
established)– Small (50%; 26%)– Medium (48%; 37%)
12Base = all SME employers trading for at least one year (bases shown in brackets). B1/B2
Numbers expect to employ in 12 months time
• Micro new businesses were significantly more likely to expect to increase their workforce than micro established businesses; – Micro (39%; 16%
established)
• Small and medium-sized new businesses were also more likely to expect workforce growth– Small (36%; 28%)– Medium (61%; 33%)
13Base = all SME employers (bases shown in brackets). B5/B6
Turnover now compared to 12 months ago
• Micro new businesses were more likely to have increased their turnover than micro established businesses; – Micro (48%; 24%
established)
• Also differences (but not statistically significant) amongst small and medium-sized businesses– Small (57%; 37%)– Medium (81%; 50%)
14Base = all SME employers trading for at least one year (bases shown in brackets). P2
Expectations of turnover in 12 months’ time
• Again, micro new businesses were particularly more likely to expect to increase their turnover than micro established businesses; – Micro (68%; 30%
established)
• Also more positive amongst new businesses that were small and medium (but, again, not statistically significant);– Small (65%; 43%)– Medium (81%; 54%)
15Base = all SME employers (bases shown in brackets). P7
16
Growth
Whether aim to grow business over the next 3 years
• Sectors in which business start ups were particularly aiming for growth include:– Information/
communications (100%)
– Manufacturing (98%)
– Other services (97%)
17Base = all SME employers (bases shown in brackets). F1
18
Planned activities that may lead to growth
Base = all SME employers. F3
19
Business capability
20
Business strengths
Base = all SME employers. F4
21
Innovation: Proportion that have introduced new or significantly improved products/services in the last 12 months
Base = all SME employers [half sample only] (bases shown in brackets). J1/J2
Higher than average in the information/ communications
sector (72%)
22
Innovation: Proportion that have introduced new or significantly improved processes in the last 12 months
Base = all SME employers [half sample only] (bases shown in brackets). J1/J2
Again, higher than average in the information/
communications sector (59%)
23
Exporting
• Lower levels of exporting amongst new businesses:– 15% sold goods or services or licensed products
outside of the UK; 19% of established businesses
• Although:– Greater than average in information/communications
(48%) and manufacturing (40%)
• 5% planned to export (3% of established businesses)– Main reason for not exporting was not having a
product/service suitable (66% of non-exporters)
24
Training
• Similar levels of training amongst new businesses:– 58% trained at all in the last 12 months; 60% of
established businesses– Greater than average in administration services
(78%) and other services (84%)
• 29% trained managers (32% of established businesses)– Main reason for not training managers was not
considering it a priority (54% of those not training managers; 58% of established businesses)
25
Technology
• New businesses as likely as established businesses to have access to broadband– 90% had access; 91% of established businesses
• New businesses were more likely than established businesses to seek general business advice (66%; 58%) and advice on regulation (68%; 63%) online
• 74% of new businesses had their own website (70% of established businesses)
26
Environment
• New businesses were less likely to have taken steps to reduce their environmental impact– 55% had taken steps; 68% of established
businesses– Increased to 82% of small new businesses (77%
of small established businesses)– Higher than average in the construction sector
(75%)
27
Access to finance
28
Whether sought finance in the last 12 months
Base = all SME employers (bases shown in brackets). H4
Higher than average in the information/ communications
sector (48%)
29
Finance sought
• New businesses and established businesses sought finance for similar reasons (mainly working capital, cash flow, 59%; 55%)
• New businesses were more likely to have sought a bank loan (58%; 46% of established businesses), but otherwise were similar to established businesses in this respect
• They were more likely to experience difficulties (58%; 45%) because of poor (18%; 7% of established businesses) or no credit history (19%; 2%)
30
Eventual outcome of application for finance
31
Relationship with the bank
Base = all SME employers (bases shown in brackets). H1
51% of businesses aged up to 3 years had
a good relationship with their bank; 62% of businesses aged over
3 years
32
Obstacles to business success
Obstacles to business success
• 79% of new businesses mentioned the economy as an obstacle (78% of established businesses)
• More of an issue for new businesses were:– Taxation, VAT, PAYE, NI,
business rates (63%; 56%)
– Cash flow (59%; 49%)
– Obtaining finance (55%; 36%)
33Base = all SME employers (bases shown in brackets). G2
Main obstacles cited :
34
Business support
35
Awareness of public sector organisations offering business support
Base = all SME employers (bases shown in brackets). K1
36
Whether sought information or advice in the last 12 months
Base = all SME employers (bases shown in brackets). K2
Higher than average in Transport, retail
and distribution sector (53%)
37
Information and advice sought
Advice• Both new businesses and established businesses are
most likely to seek advice on business growth (37%; 28%)
• Followed by financial advice for general running of the business (25%; 23%)
Information• Financial information for general running of the
business predominates (30%; 27%)• Followed by tax/national insurance law and payments
for new businesses (17%) and employment law/redundancies for established businesses (15%)
England and Wales only
38
Sources of information and advice
Advice• Accountants predominate for both new
businesses and established businesses (46%; 38%)
• Followed by consultants/business advisers for both new and established businesses (both 15%)
Information• Accountants also predominate (29%; 35%)• Followed by friends/family for new businesses
(16%) and banks for established businesses (10%)
England and Wales only
39
Use of business mentors
Base = all SME employers (bases shown in brackets). K15
38% of new businesses that had not used a mentor would be interested in doing so; 24% of established businesses
40
Types of business mentor used
Unweighted base = where used a business mentor (bases shown in brackets). K17
41
Working for the public sector
Whether expressed an interest in, or bid for, public sector contracts
• 13% of new businesses have expressed and interest in, or bid for, any contract advertised by the public sector (15% of established businesses)
• 21% have actually done some business for the public sector (27% of established businesses), increasing to 32% of new businesses in the business services sector
42Base = all SME employers (bases shown in brackets). L2
Have actually done any business for the public sector in the last 12 months:
Nature of work for the public sector
• 48% of new businesses that have worked for the public sector did so as prime contractor (55% of established businesses)
• They are most likely to have worked for local authorities (48%; 53% of established businesses), followed by the Health Service (17% for both new and established businesses)
• Awareness and use of websites advertising public sector tender opportunities:– Scotland: 43% aware of Public Contracts Scotland website;
64% of these have used it– Northern Ireland: 13% aware of the e-sourcing NI website;
16% of these have used it– Wales: 45% aware of Sell2Wales website; 45% of these have
used it 43
Thank youFor further information contact:
June Wiseman, Steve Lomax, Emma ParryBMG Research LtdTel: 0121 333 6006
www.bmgresearch.co.uk