December's survey asked panellists for their views on encouraging exporting, upcoming Employment Equality Regulations, effective management styles, keeping clients up to date, the main source of concern for clients' businesses plus the quarterly trends questions.The trends charts from the responses to the regular quarterly questions can be found via the Trends link on the Home page of the ukbab website.
In total 177 Advisers responded to this Survey.
Survey Findings
In HM Treasury's December 05 pre-budget report it was stated that in the long run continued economic growth depends on enhanced productivity, and - as the pace of economic transformation quickens - on the flexibility of the UK economy to respond to changing global markets and trade. The opening questions in the December UKBB Survey focused on business exports and supply imports. In particular, Regional Development Agencies place significant emphasis upon increasing export activity.
We asked panellists what they considered to be the three main constraints discouraging smaller businesses from exporting, and we also asked the same question in the sister Business Barometer (UKBB). The three issues which emerged as the most commonly held main constraints from the UKBAB respondents were Lack of experience, lack of awareness of export opportunities and potential and payment concerns. The UKBB respondents agreed with lack of experience and lack of awareness of export opportunities and potential, but the nature of the product and its market emerged second.
72% of respondents to the UKBAB consider that their remit includes actively encouraging clients to consider exporting, but 69% have less than 10% of clients who actually export or plan to export goods or services.
Next October (2006), subject to Parliamentary approval of the draft legislation, an extension to the Employment Equality Regulations will be implemented which will bring age discrimination into line with laws on sex and race discrimination in employment and training. The new regulations will not only bar unfounded age discrimination in employment and vocational training but will also require employers who set their retirement age below the default age of 65 to justify or change it, will introduce a new duty on employers to consider an employee's request to continue working beyond retirement and will close a number of other age-related loopholes.
Panellists were asked how aware they think their clients are of both the new regulations and the impact on their (the clients) businesses and panellists of the UKBB were asked how aware they are of these regulations and how they might impact on their own businesses,. There were marked differences between the two sets of responses, with only 15% of UKBAB respondents saying their clients were either totally aware or reasonably aware, while 63% thought that clients were either totally unaware or nearly unaware. The UKBB survey results showed that 46% of respondents to that survey were either totally aware or reasonably aware, while 37% were either totally unaware or nearly unaware, after adjusting for those responding 'not applicable'.
Respondents were divided about whether it is their duty to ensure clients are up to date with changes in government regulations. While 68% feel this strongly or relatively strongly, 10% see no or little obligation on them.
Management styles obviously vary, and different styles may be more suited in different situations. Among the respondents to the UKBAB and the UKBB, both of which surveys posed the identical question, there was agreement that the style thought to be most effective by the greatest numbers was 'Consensual', with UKBAB respondents voting 'Pragmatic' second while for UKBB respondents 'Target Driven' came in second place.
The December survey investigated what respondents feel to be the main source of concern or worry for their clients' businesses. Respondents were only allowed a single choice for their response, and 37% selected Government regulations, while 22% opted for late payments and 19% chose competition. UKBB participants were asked what the main source of concern for their businesses was and although 24% cited competition as the main source, 29% felt that there was another source not included in the list of options. Government regulations came in third, with 22% rating this as main source of concern.
Trends Questions
The average number of clients seeking business advice continued to increase in the December quarter.
Respondents to the December survey witnessed an overall increase in the number wanting to start a business in the last quarter of 2004.
The ability to gain access to finance dropped slightly compared to the September quarter.
The number of Advisers' clients finding that there is a shortage of skilled labour reduced on average during the December quarter.
In the December quarter, Advisers were on average slightly more optimistic about the continuance of their clients trading over the next year. Although 14% of Advisers consider that none of their clients will close over the next year, compared with 15% in September, 74% thought that up to 10% of their clients might cease trading compared with 68% in the September 04 quarter. There was a decrease in expectations of higher numbers of business cessations: 13% in December, compared with 17% in September thought that over 10% might cease trading.
Views expressed are those of individual panellists and may not represent those of the University.
I believe it is an advisers responsibility to ensure that their client understands the market in which they are trading whether that is export or home, hence my repsonse to that particular question.
It is difficult to put all the points to clients because we basically make them aware of changes but beyond that it is difficult to go further because they will not thank you for a bill if they have not instructed you. This creates a chicken and an egg situation. We circularised all our clients re the pension changes . We heard from 1% and of others no more than 2% have spoken to their IFA's re this and yet this is fundamental to many of them. Hence the difficulty to get messages across
It seems that the funding for business support through Business Link has continued to decline in Greater London now it comes under LDA. Popular belief is that Ken Livingstone is too interested in the Olympics.
Most businesses have no clear direction, plan or focus, and thus exporting is a good idea but is just that "a good ide
It would be interesting to ask about the importance of innovation & design support offered by the Business Links nationwide and if they feel it needs to be addressed.
There is a feeling that growing government bureaucracy relating to staff, discourages the possibility of further staff recruitment. The alternative is to dispose of staff within the first 12 months of recruitment.
Question 6 - Management style: Having identified "Democratic" as my answer, I would qualify that by saying that in my experience, inviting input from everyone on how objectives are to be met is extremely effective but the overall decision has to be made by a single individual.
It might be interesting to distinguish responses concerning clients in the self-employed sector and those that are truly business owners. IF statisics can be relied upon, 70% of all SME's are one-person operations. These clients exhibit fiercely independent characteristics that inevitably shape responses. E.g. biggest areas of concern are cashflow and lack of time, but this is largely due to their own perception (not letting go, ergo, no infrastructure). A true business owner values freedom, therefore systems in place tend to mitigate some of the issues in the other group (retail sector excepted maybe: not pretty at present). Debate material, perhaps? Keep up the good work and Merry Christmas! All the best for a prosperous New Year.
It is clear more businesses are struggling to be profitable and lack of reliable competent staff is a factor in this
The fundamental issue with small businesses is not the desire to export but the desire to grow. Many of the programmes run by RDA's are focused on small business growing, employing more and paying more taxes. The reality is that many of the small businesses are content to carry on with their current turnover. They are making good money without stressing themselves and see no point in venturing into new areas such as export where they will have to learn new skills and take new risks.
Although there are exceptions, exporting is most likely to succeed where the company is operating strongly in its home market and is seeking expansion by selling abroad. Exporting needs a strong organisational and financial base to operate from to ensure eventual success.
Re q11 - shortages of skilled labour - this needs to be related to the price employers are prepared to pay. In most cases employees are available at a price.
Re: Q5: To what extent do you feel that there is a duty upon advisers to ensure that clients are up to date with changes in government regulations? Government should ensure all businesses are aware. Even business advisers are not informed so they can cascade it down, their information comes largely from the efforts of bodies such as the IBA and FSB or from their own researches in response to client enquiries. The government charge for wired.gov, which could be free at least to professional advisers and used as an awareness channel with a section on new regulation.
Different national regulations on markets
The single biggest problem facing businesses at present is a lack of demand. This is giving rise to short term discounting which will have a significant impact on results in the forthcoming year.
Lack of understanding of export documentation requirements
Re: Question 7 In your opinion, which of the following is currently the main source of concern or worry for your clients? (1. Competition 2. Customer relations 3. Government regulations 4. Late payment 5. Personnel issues 6. None of these) --- Just about all of these apply to most clients. Today, it may be personnel issues, tomorrow regulation etc. The perception is that businesses spend a lot of time reacting to the issues of immediate concern, leaving themselves short of time & energy to plan ahead.
Change in UKTI regulations about who is eligible for subsidised assistance (new exporters, new markets) has had a negative impact on my clients
Easing of availability of finance is largely explained by the ready availability of personal loans and increased equity in homes.
Late payment is not the issue it was in previous years. Client numbers and quality remain the same but we are unusually busy compared with the same months last year and in earlier years.
Regarding the question on clients' main concerns, mostly it boils down to lack of management and financial management expertise.
