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100th Survey of Small Business finds 7 out of 10 firms seeking face to face advice
Small firms are turning to trusted sources for advice as the economic climate, cashflow and bad debt become their dominant problems according to the 100th Quarterly Survey of Small Business in Britain released today by The Open University Business School.
Most (71%) want face-to-face contact for new advice and information and are turning to their accountants (55%) and business trading partners (51%) such as customers, stockists, and suppliers. Previous years saw an increase in the use of electronic media such as email (64%) and websites (62%). Use of hard copy publications like pamphlets, directories and guides has declined (down to 27%, from 54% in 2002 and 45% in 2007).
Professor Colin Gray, Professor of Enterprise Development, The Open University Business School said: "We have been monitoring the effects of the recession on small firms since before the ‘credit crunch’ started to raise its ugly head in the middle of 2007. In the second quarter of 2008, as the downturn was sliding into a full recession, we asked our survey respondents what counter-recession steps they were taking.
More than half were taking cuts in their own personal earnings and other cost cutting measures, including two in five of small firms laying-off staff. This was particularly severe among small hotels, restaurants, retailers, wholesalers and construction firms. Against that, more than 40% - especially providers of business and personal services and small manufacturers – took a more entrepreneurial approach and were actively seeking to move into new markets and lines of business. To do this effectively they need speedy access to reliable advice and information. Our current survey indicates a rapid growth in the use of fast electronic sources of information with an increased need for the reassurance of face-to-face contact."
Professor Robin Jarvis, head of ACCA's Small Business Policy Unit, says: "In this digital age, it’s interesting to see that face to face contact is more important to SMEs than ever. Trust has been a massive issue during the economic crisis, so it is pleasing to see that small businesses are using a variety of sources to help them through the ups and downs of the economic cycle."
Larger and more entrepreneurial small firms are making more use of a wider range of sources of advice and information, including government- funded services and business and trade associations.
Small builders, transport firms and wholesalers have slipped deeper into recession during 2009. The agriculture and fisheries sectors, small hotels, restaurants and small providers of education and health services reported net positive sales balances for the past year though small hotels and restaurants anticipate that sales will fall once again in the current quarter.
While small firms in the education, health and leisure sectors anticipate a net increase in staff the prospects for employment remain bleak. Most businesses are adopting a 'wait and see' approach with two-thirds (65%) reporting no change in their staffing levels and three-quarters (75%) anticipating no change in the immediate future. There were some signs in East Midlands, North West and London of firms cutting prices in order to boost sales.
The Quarterly Survey of Small Businesses is conducted in association with Barclays Bank and the Association of Chartered Certified Accountants (ACCA).
As part of the 100th survey The Open University Business School is launching a free one day workshop Entrepreneurial Leading out of the Recession. The aim is to help business owners with the challenges identified in the survey. Taking place on the 28th January the workshop will explore what leadership means in a recessionary context, what actions and knowledge need to be fostered in small firms and what are the most effective ways of developing the right skills to manage successfully.
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Open University Business School
The enterprise research team at the Open University Business School publishes the Quarterly Survey of Small Business, which was founded in 1984 as the first national, regular survey of small firms in the UK.
This report is the 100th in the series. Single printed issues of the report cost £50 and £180 for an annual subscription. A PDF version is available by email for £25 per issue or £70 annual subscription. Contact Julie Sullivan: j.sullivan@open.ac.uk
About the research
The findings have been published in The Quarterly Survey of Small Business in Britain, conducted by the Open University Business School and supported by ACCA (the Association of Chartered Certified Accountants) and Barclays Bank. Now in its 25th year.
The 834 firms that responded to the survey are drawn from two sources – some 242 members of the OUBS small enterprise database of past quarterly survey respondents who responded online; plus some 592 small businesses with a turnover of £50,000 - £1 million drawn from a structured database that reflects the distribution of industries in Britain (this sub-sample was recruited and interviewed by telephone by Continental Research) . The online interviews were completed during October and November and the first wave of telephone responses were gathered in October and the second wave in November. Sectors covered include: Health & education, transport & travel, retail, hotels & restaurants, agriculture & forestry & fisheries, business services, wholesalers, construction and manufacturing.
The firm-size definition used in the survey is: sole-proprietor = 0 (only the owner); 1-9 = microfirms; 10 – 19 = small; 20+ = medium
About The Open University
The Open University (OU) is the UK’s largest university and the world leader in distance education. More than two million people, including thousands of small business owners and employees, have studied with the OU since it began in 1969. The OU has more than 200,000 students in over 40 countries studying for a variety of degrees and vocational qualifications ranging from short courses to PhDs. Independent authorities have consistently ranked the OU in the top five UK universities for teaching quality and virtually all of the University’s research areas have received ratings of national or international excellence.
For course enquiries call: +44 (0)845 300 60 90 or visit www.open.ac.uk
About ACCA:
ACCA is the global body for professional accountants. ACCA aims to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 362,000 students and 131,500 members in 170 countries worldwide. ACCA believes that globalisation of business means that one set of reporting standards is essential. We favour the principles-based IFRS. ACCA understands the real issues facing small businesses as 63,000 of our members work in SMEs or small partnerships worldwide.
About the Leadership Academy workshop:
The Leadership Academy is led by the University of Surrey in partnership with The Open University Business School, Royal Holloway, the University of Greenwich, and the Tavistock Institute of Human Relations, The initial focus was on leadership for innovation but is now firmly on pathways out of recession. Entrepreneurial Leading Out of Recession is The Open University Business School’s one-day workshop supported by small business online advisor and owners forums. It aims to inspire fresh thinking by bringing together small firm owners, leading experts on small business leadership and development and national business support professionals. The programme includes keynote presentations, demonstrations of counter-recession initiatives and opportunities for discussion and informal networking.
For more information, registration and to participate now in the online forums, visit http://www.open.ac.uk/ldc08/
About Barclays Local Business:
Barclays Local Business is the small business banking arm of Barclays. It has over 672,000 customers that are a mixture of start ups, sole traders, partnerships and small limited companies. These turnover up to £1 million each.
For further information please contact:
OU Media Contact - Rachel James 01908 653343 07747 898 468 r.m.james@open.ac.uk ACCA Media Contact - Helen Thompson +44 (0)20 7059 5759 +44 (0)7725 498654 helen.thompson@accaglobal.com