The Scottish Government

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7 Business advice and contact with government

7.1 Seeking advice about business matters and regulations

SME employers were asked a series of questions about the extent to which they sought advice. They were asked whether they had sought general advice about running their business and what organisations they had sought advice about regulations from.

7.2 General advice and information

Only three in ten SME employers in Scotland had sought general advice and information about running their business in the twelve months prior to the survey (29 per cent). Medium sized businesses were more likely to have sought advice (40 per cent) than micro and small size businesses (28 per cent and 29 per cent respectively).

New businesses were more likely than the business population as a whole to have sought general advice and information; 38 per cent had done so in the 12 months prior to being interviewed.

Local or government support agencies were approached for advice by 38 per cent of recently established SME employers. New businesses also sought advice at the time of start up from banks (11 per cent) and accountants (7 per cent). Seven per cent of SME employers who were involved in the business start-up used the Internet as a source of advice on getting the business up and running.

Much of the advice new start-ups sought at the time they were getting their businesses established was informal; 22 per cent of SME employers sought advice on an informal basis from friends or family at start up.

When recently established SME employers had sought advice, they had mostly found it. However, two in ten (18 per cent) experienced problems, most commonly because they did not know where to go to seek advice or the organisations or individuals they approached or the advice given were unhelpful.

7.3 Advice concerning regulations

The survey specifically explored the advice that SME employers sought and received concerning regulations. Approximately two thirds (61 per cent) of SME employers in Scotland had consulted some source of advice about regulations in the 12 months prior to being interviewed.

SME employers most commonly sought advice on regulations from private sector professionals and consultants (see Table 7.1). The most consulted sources of advice were accountants (12 per cent). One in ten consulted a Trade Association (11 per cent) and six per cent consulted published sources, (including resources on the Internet). Six per cent engaged consultants and four per cent solicitors.

Table 7.1 Sources of advice consulted on regulations

Just over a quarter consulted a government source of some kind (28 per cent). These included: DTI and SBS (now the Department for Business Enterprise and Regulatory Reform) and local authorities (three and four per cent respectively) and 'other regulators' (nine per cent).

7.4 Contact with and use of government services

Six in ten SME employers (60 per cent) reported having contact with government departments or agencies in the 12 months prior to the survey. Medium-sized employers were more likely to have had such contact (84 per cent) than small and micro employers (68 and 57 per cent respectively).

Incorporated businesses were more likely to have had contact with government (68 per cent) than either Partnerships (61 per cent) or Sole Proprietorships (48 per cent).

Women-led businesses were less likely to have had contact with government departments or agencies (50 per cent).

There were marked variations in satisfaction with government and its agencies (see Chart 7.1). Companies House was viewed most positively (net satisfaction +114) and planning authorities were viewed most negatively (-15). The latter was the only service which registered a negative aggregate satisfaction score.

Chart 7.1 Satisfaction with government and its agencies

Base: all businesses in Scotland with employees who had contact with government agencies in the past 12 months (weighted data); unweighted N - 613

Employers were also asked to what extent they felt that government takes account of the concerns of small businesses. One in ten respondents (16 per cent) felt that government took their concerns into account "very much" or "quite a lot", with four in ten (37 per cent) believing that government takes "a little" account. Approximately one third (32 per cent) thought that government took no account at all of their concerns, and a further five per cent were not sure.

Medium-sized employers were more likely to believe the government takes account of the concerns of small businesses. The smaller the employer the more likely it was to state that government takes "no account at all" of small businesses' concerns.

7.5 Public procurement

The majority of SME employers (87 per cent) had neither expressed interest in or bid for public contracts. One in eight SME employers (12 per cent) had expressed an interest in or bid for public contracts in the 12 months prior to the survey (ten per cent having bid for public contracts and two per cent having expressed an interest but not bid).

One third of SME employers had done some work for the public sector in the previous 12 months (32 per cent). Half of medium-sized employers (49 per cent) had done so. The larger the SME, the more likely it was to have bid for a public contract. 27 per cent of medium-sized employers and 14 per cent of small employers had done so, but only nine per cent of micro-employers.

Among those who had done work for the public sector, the most frequent customer was local authorities. Two thirds of SME employers which had done some work for the public sector (65 per cent) counted local authorities as their main public sector client. More than one in ten had contracted to the Health Service (13 per cent), and a somewhat smaller proportion had contracted with Higher or Further Education establishments or Departments of State (seven per cent each).

SMEs looking to sell (or sell more) to the public sector reported few problems understanding the procurement process. Only two per cent described a lack of such understanding to be an issue.

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