« Previous | Contents | Next »
Listen
1 Summary
1.1 The Annual Small Business Survey. This report presents findings in Scotland from the Annual Small Business Survey ( ASBS), 2006. The survey was a large one including a total of 1,014 interviews in Scotland; 916 of them with businesses with employees. The report presents the survey findings relating to the ' SME employers' rather than for all businesses.
1.2 Past growth. One in five SME employers in Scotland (18 per cent) had grown in employment terms in the 12 months prior to the survey. Approximately one in seven SME employers (14 per cent) had reduced the size of their workforce. Two in five SME employers had increased their turnover (42 per cent) while half that proportion (19 per cent) had seen their turnover decrease.
1.3 Growth ambitions. Almost two thirds of SME employers were planning to grow over the next two to three years (64 per cent). The larger the business the more likely it was to aim for growth. A third of SME employers (33 per cent) anticipated closing down their business or transferring ownership in the next five years.
1.4 Sustained growth. The findings show an increase in the percentage of businesses experiencing sustained growth (that is, where they both increased their workforce during the past year and intended to increase staff numbers in the next twelve months). Nine per cent of businesses with employees reported sustained growth in 2006.
1.5 Innovation. Slightly more than half of SME employers (52 per cent) introduced new or significantly improved products or services in the past 12 months. Of these, three-quarters (74 per cent) introduced innovations that were new to their business with 25 per cent believing their innovation to be completely new. A third of SME employers (34 per cent) had introduced significantly improved or new processes to their business. Of these, three-quarters (78 per cent) had introduced processes which were simply new to their business and one fifth (20 per cent) had introduced completely new processes.
1.6 Obstacles to achieving business success. Most SME employers perceived at least some degree of challenge to their success; only three per cent did not report any obstacles.The most frequently reported biggest obstacles were: Tax/ VAT/ PAYE/ NI (13 per cent of SME employers), competition in the market (12 per cent), regulations (11 per cent) and cash flow (nine per cent).
Recruitment problems and skills shortages were cited by seven and four per cent of respondents respectively. One per cent of respondents were most concerned about a lack of managerial skills and expertise.
1.7 Competition from overseas. A fifth (20 per cent) of SME employers felt threatened by overseas competition, with 16 per cent seeing this as a serious threat to their business.
1.8 Regulations as an obstacle to success. Almost a third (30 per cent) of the SME employers that reported regulations to be an obstacle cited Health & Safety regulations as the main area of difficulty. Tax, environmental and employment regulations were cited by 16 per cent, 14 per cent and 12 per cent of employers respectively.
1.9 Managing cash flow. The most common explanation given for cash flow problems was irregular or fluctuating patterns of income (71 per cent). However, close to half of the respondents that reported cash flow to be an obstacle to the success of the business cited late payment as being a key element of these problems.
1.10 Access to finance. A quarter of SME employers (25 per cent) had sought external finance for their business in the year prior to the survey. Most obtained all the finance they sought, but approximately one in four reported problems and approximately half of these were unable to secure any external funding. By far the most common type of finance sought was bank loans (46 per cent of those that had sought finance).
1.11 Seeking business advice. The use of business support across SME employers was not widespread. Only three in ten SME employers (29 per cent) had sought advice from external sources about the general running of their business in the 12 months prior to the survey.
1.12 Contact with and use of government services. The majority of SME employers (60 per cent) had some form of contact with government during the year preceding the survey. Respondents were generally satisfied with the way that government bodies handled this contact. The exceptions to this were contact relating to the planning permission process (where there was net dissatisfaction) and the processes for claiming grants/loans and regulation enforcement (where levels of satisfaction were only slightly more positive than negative).
1.13 Characteristics of SME employers.
- The vast majority of SME employers were run by men; only 18 per cent of them were run by a woman or by a management team mostly comprised of women. Women-led SME employers tended to be smaller than average.
- Six per cent of SME employers were run by a member or mostly by members of a Minority Ethnic Group.
- Six per cent of SME employers included at least one owner or director with a disability.
« Previous | Contents | Next »