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SMALL BUSINESS SERVICE NATIONAL OMNIBUS SURVEY SCOTLAND: AUTUMN 2002
CHAPTER FOUR: CHARACTERISTICS OF SMES
4.1 AGE OF THE BUSINESS
868 respondents were able to provide a year for when the business was established (n=868 - 95% confidence limit within 3%). 40% of respondents are more than twenty years old, 21% are between eleven and twenty years old, 18% are between six and ten years old and 21% are less than six years old. The chart below shows that there is a clear relationship between size of the business and age:
Figure 1 Age of the business by business size (weighted, n=868)
Medium-sized businesses are more likely to be older than are businesses with fewer than 50 employees. 58% of businesses with zero employees are less than eleven years old.
4.2 ETHNICITY OF THE OWNERS OF THE BUSINESS
2% of businesses responding to the survey in Scotland have at least one owner from an ethnic minority group, compared to 6% for the UK as a whole (for micro, small and medium businesses).
4.3 GENDER OF OWNERS
Respondents were asked if the business had any female owners. Businesses have then been categorised as:
- All female owned
- Majority female owned, i.e. the number of female owners is greater than the number of male owners
- Equally owned, i.e. the number of male owners is equal to the number of female owners
- Majority male owned, i.e. the number of male owners is greater than the number of female owners
- All male owned
14% of businesses in Scotland are all female owned, 2% are majority female owned, 27% are equally owned by male and female owners, 7% are majority male owned and 50% are all male owned. 50% (2001 - 52%) of firms in Scotland have at least one woman owner (for micro, small and medium businesses, n=835 - 95% confidence limit within 3%).
In the UK as a whole 12% of businesses are all female owned, 2% are majority female owned, 24% are equally owned by male and female owners, 9% are majority male owned and 53% are all male owned.
The chart below illustrates gender of ownership by industry sector:
Figure 2 Gender of ownership by industry sector for micro, small and medium businesses (weighted, n=835)
The sectors where businesses are most likely to have at least one female owner are the education and health services sector, retail and wholesale and the hotels and restaurants sectors.
There is no relationship between size of the business and the gender of its owners.
4.4 LEGAL STATUS
38% of businesses responding to the survey in Scotland are limited companies, 40% are sole traders and 22% are partnerships (n=835 - confidence limit within 3%). There is no relationship between age of the business and legal status of the business, as is shown in the chart below:
Figure 3 Legal status by age of the business for micro, small and medium businesses (weighted, n=835)
7% of micro, small and medium businesses had changed their legal status in the past five years. The chart below shows the changes in the legal status of businesses:
Figure 4 Change of legal status for micro, small and medium businesses (weighted, n=47 - 95% confidence limit within ± 15%)
Over half (51%) of the changes were from an unincorporated to an incorporated type of business (while only 5% of changes were from incorporated to unincorporated status). The results for the UK as a whole are similar.
4.5 FAMILY BUSINESS
4.5.1 Ownership of family business
69% of the businesses responding to the survey in Scotland are family owned (including 64% of companies) (n=835 - 95% confidence limit within 3%). This compares to 66% in the UK as a whole. A slightly smaller proportion of medium size businesses are family owned (62%).
27% of family owned businesses in Scotland are partnerships and 45% are limited companies.
The sectors with the highest proportion of family owned businesses are agriculture and hotels and restaurants:
Figure 5 Family owned business by industry sector for micro, small and medium businesses (weighted, n=835)
In the UK as a whole the highest proportion of family owned businesses is also in agriculture, the second highest being in construction (74%) and the third in the hotels and restaurants sector (72%).
54% of the family businesses in Scotland are controlled by the first generation.
4.5.2 Future of family business
53% of the family owned businesses plan to keep the business in the family, and 20% have plans to sell the business. 77% of the owners with plans to sell their business are looking at a trade sale as an option to sell the business.
4.6 EMPLOYMENT 3
On average the businesses in the survey have five employees. The highest average number of employees is in the manufacturing sector (11 employees), and the lowest is in the agricultural sector (2 employees).
4.7 MEMBERSHIP OF TRADE BODIES
54% (2001 - 46%) of Scottish businesses responding to the survey are members of trade bodies - mainly trade associations, although 17% (2001 - 15%) are members of the Federation of Small Businesses. The breakdown is shown below:
Figure 6 Membership of trade bodies for micro, small and medium businesses (weighted, n=835 - 95% confidence limit within ± 3%)
Membership of trade bodies is related to size of the business as only 34% of firms with zero employees are members of a trade or business association compared to 72% of medium-sized firms.
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