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Omnibus Survey of Small Businesses in Scotland 2002: Rural Analysis
4 Characteristics of SMEs
4.1 Distribution
The table below shows the split of the Businesses in each of the geographic categories (after weighting):
Geographic area | Proportion of Businesses (%) |
Large urban areas | 27.0 |
Other urban areas | 11.7 |
Accessible small towns | 1.0 |
Remote small towns | 2.0 |
Accessible rural areas | 40.0 |
Remote rural areas | 18.3 |
Total | 100.0 |
Table 6: Businesses by geographic area
4.2 Size of the business 3
Size of the business does not differ significantly across the three geographic areas, as is shown in the graph below:
Figure 1: Size of the business by geographic area (weighted, n=1,002)
There are slightly more firms with no employees in the accessible rural area (45%) and the remote rural area (42%) than in the urban/small town area (38%). In the remote rural area there are fewer medium firms.
4.3 Business activity
In all geographic areas the majority of Businesses are from the retail and wholesale sectors. The graph below shows business activity by geographic area:
Figure 2: Business activity by geographic area for micro, small and medium Businesses (weighted, n=835)
There are more Businesses from the financial services sector and fewer from the agricultural sector in the urban/small town area than in the other areas. It is interesting to note that the proportion of manufacturing firms is highest in the accessible rural area. Retail and wholesale are less prominent in both the accessible and remote rural areas.
4.4 Legal status
38% of Businesses in Scotland are limited companies, 40% are sole traders and 22% are partnerships (n=835 - confidence limit within 3%). There is a relationship between geographic area of the business and legal status of the business, as is shown in the chart below:
Figure 3: Legal status by geographic area for micro, small and medium Businesses (weighted, n=835)
Over half of the Businesses in the urban/small town area are companies, whereas in the remote rural area just over a third of the Businesses are companies. The general tendency in the accessible and remote rural areas is towards unincorporated Businesses.
4.5 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 Scottish firms 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 the age of the Businesses in the three geographic areas:
Figure 4: Age of the business by geographic area (weighted, n=868)
Businesses in the remote rural area are slightly more likely to be older than ten years than Businesses in the urban/small town area or the accessible rural area.
Although the data from the survey had been weighted to the overall business population in Scotland, there appears to be a discrepancy between the average age of the business reported here and the average age of the business as represented by Scottish Executive data. This might be due to a random sampling error of newer firms being underrepresented.
4.6 Family business
69% of the Businesses in Scotland are family owned (n=835 - 95% confidence limit within 3%).
The areas with the highest proportion of family owned Businesses are the accessible rural area and the remote rural area (73% in each), compared to 64% of Businesses in the urban/small town area.
Over half of the family Businesses in Scotland (54%) are controlled by the first generation. The proportion of firms owned by the first generation is highest in the remote rural area (58%; urban/small town area - 56%, accessible rural area - 49%). However, the highest proportion of family owned Businesses that plan to keep the business within the family is in the accessible rural area (58%; urban/small town area - 49%, remote rural area - 51%).
4.7 Employment 4
On average the Businesses in the survey employ five people (Businesses established in 2002 have been excluded from these results in order to provide a cut off point and a more accurate picture of employment in Scotland). The highest average number of employees is in the urban/small towns area (7 employees), and the lowest is in the remote rural area (4 employees; accessible rural area - 5).
4.8 Membership of trade bodies
54% of Scottish Businesses are members of trade bodies - mainly trade associations, although 17% are members of the Federation of Small Businesses.
Membership of trade bodies is related to location of the business as 51% of firms in the urban/small town area are members of a trade or business association, compared to 44% of firms in the remote rural area (accessible rural area - 50%).
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