UK Business Barometer

The fourth pilot UK Business Adviser Barometer (UKBAB) survey questionnaire was sent out in mid-December 2002 and received 126 responses. The survey focused on job creation, barriers to starting up, home based businesses, temporary workers rights, late payment, net profit margins and bad debt and some questions which will be repeated every three months to yield trend indicators.

The first question drew on advisers experience of company lifecycles - over 2/3 of respondents think that it would be more effective to encourage expansion in existing businesses than to encourage Start-ups, with a view to sustainable job creation and economic development.

Appropriate finance is seen as by 43% of Advisers as the biggest barrier to starting a business in their region. Other possibilities were more evenly spread between types of barrier, and only 2% of respondents didn't know.

Only 3% of respondents deal with 75% or more of clients with home-based businesses, while 8% of respondents find that none of their clients work from home and a further 45% have less than a quarter of clients working from home.

The EU Agency Workers Directive is certainly not anticipated with pleasure by many respondents. 24% of Advisers feel it will have significant detrimental impact on their small business clients while 48% think it will be slightly detrimental to them.5% anticipate a slight or positive benefit to clients.

There is a difference in the way in which Advisers and UK Business Barometer panellists view the possible effect of the inclusion in invoices of a statement regarding the recovery of interest on late payment. While 38% of Advisers thought it would improve prompt payment only 27% of UKBB respondents agreed. One third of Advisers thought it would make no difference, but one half of UKBB respondents thought this. 28% of Advisers thought it would be detrimental to client relationships, while 23% of UKBB respondents agreed.

57% of the responding Advisers have noticed increased pressure on clients' profit margins over the last 6 months, while 14% have generally observed a lessening in such pressure. Over the same period 45% of Advisers thought that their clients had experienced a slight increase in bad debt, while 50% thought the level of bad debt unchanged. 5% felt that it had fallen slightly.

The number of clients seeking business advice over the past 3 months is showing a small increase over the previous quarter, not at the significant increase level, but at the slight increase level, with 38% of advisers in December and 29% in September. With less reporting no change, there was also a small reduction in those reporting decreases, either slight or significant, from 23% in September to 22% in December.

From those respondents that advise start-ups (i.e. excluding those answering 'not applicable'), 6% have seen a significant increase in the number wanting to start businesses, while a further 37% have seen a slight increase. 23% have witnessed a decrease in numbers..

The appropriate finance was thought to be the biggest barrier to business start-ups (Q2) but accessibility of finance was thought to have improved over the last 3 months by 12% of respondents, excluding those who replied 'not applicable'. This compared to 13% in September. 69% of respondents thought access was unchanged for the December quarter, but in September it had been 55%. 19% of respondent thought that clients ability to gain access to finance worsened in the past three months, compared to 32% in the September survey results.

56% of Advisers say that less than 25% of their clients are finding that there is a shortage of appropriately skilled labour, while only 1% of respondents believe that over 75% of clients are short of skilled employees.

FAdvisers are in a good position to judge the likely longer-term success of their client businesses. No advisers believe that more than 50% of their clients will cease trading in the next 12 months, and 14% believe that none of their clients will do so. 64% of respondents think it likely that up to 10% of clients may cease trading.