UK Business Barometer

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BAB-38 October 2005 Analysis

The October survey themes were: key influences on a firm's growth rate, the National Minimum Wage, marketing costs, business advice and expertise, time allowed for strategic matters and the medium to long term economic future compared to a year ago.

In total 194 Advisers responded to this Survey.

Survey Findings

The first set of questions in the October survey asked respondents about key influences on a firm's growth. Respondents were asked to rate five different potential key influences, each on a scale of one to five. The same set of questions was asked of respondents in the parallel UK Business Barometer (UKBB).

The attitude of the owner proved to have the highest response, taken over the two top ratings, out of all five questions in the set. 89% of respondents were in the top two categories for this, and respondents to the UKBB were also emphatic, with 80%. In second place in the UKBAB survey came 'available skills', rated more highly by only 4% more respondents than 'market demand'. The UKBB survey results showed 'market demand' ahead of 'available skills' as a key influence.

More detailed comparative results for each question in the set are available here

The second set of questions were centred on business advice, consultancy and training. Panellists were asked about the sources of business advice that their clients find useful. More than one choice was permitted, and an average of 5.1 choices per respondent was made. Accountant received the highest number of responses, 16% of total, and was chosen by 82% of respondents. Business adviser was the second most popular choice, with 14% of total responses and chosen by 71% of respondents.

In the UKBB, panellists were asked about their sources of business advice, choosing from the same list. Accountants topped the responses again, with 19% of total UKBB responses, from 69% of respondents. There was an average of 3.7 responses per respondent to the UKBB version of the question. Other business owners came second with 16%, followed by Customers.

While UKBAB panellists where asked which of the issues should be addressed for their clients by a consultant for a day, UKBB panellists were asked for their direct preference of issue on which they would like a day's worth of consultancy.

Marketing was the strongest response from both sets of respondents, with 50% from BAB results and 47% from BB results. 'Management skills' was the second favourite choice and the following question looked at which aspects of management skills training should focused upon.

BAB panellists were asked which aspect their clients should focus upon for free Management training from a specialist expert, while UKBB panellists were asked which one aspect of management training they would ask a free specialist expert to focus upon. The two sets of results were in broad agreement as to order if not quantity. People skills came out top of needs, followed by change management and then finance.

54% of UKBAB respondents would expect their clients to spend less than 10% of their outgoings on marketing activities, with 36% expecting clients to spend between 10% and 20%. The UKBB questionnaire asked panellists what proportion of their costs were allocated to marketing activities over the last year. The results were to some extent comparable with the UKBAB results - 61% said less than 10% and 29% said between 10% and 20%.

The National Minimum Wage rates increased on 1st October 2005. The rate for those over 22 years of age went to £5.05 an hour, from £4.85, an increase of 4.1%. Other NMW rates increased in line. 19% of respondents to the UKBAB have found from their experiences that the National Minimum Wage features highly or relatively highly for their clients' decision making processes while only 10% of respondents to the UKBB survey find that the NMW features highly or relatively highly in practice in their decision making processes.

The panellists of the UKBAB, the Business Adviser Barometer, were asked if they encourage their clients to set aside time for looking at strategic matters. 90% do, and 37% recommend this takes place quarterly.

In the parallel Business Barometer Survey of smaller businesses, respondents were asked if they set aside specific time to evaluate strategic matters during the course of a year. The results show that 75% of respondents take time out to evaluate strategy and related matters each year. In fact, 26% do so every month, while 24% revisit on a quarterly basis.

Entrepreneurs and business advisers are vitally concerned in the working economy and decisions taken and advice given is likely to be strongly related to the economic outlook as seen through their eyes. The same question was asked on the future of the UK economy to respondents to both the UKBB and the UKBAB. Responses were very similar and quite strongly indicative of a negative shift. 46% of both sets of respondents are more pessimistic than they were a year ago, although about 40% say they have not changed their view.