Last week saw the latest results from the Sage Business Index released.  Over the last few weeks we have been making some suggestions as to what we thought the new results would highlight. We wanted to take the opportunity to have a look at these predictions, and also take a closer look at the results themselves and get your thoughts on them.

In ‘Lending for SMBs – a well oiled machine’ we discussed the proposed lending scheme in the UK for SMBs and whether this was enough to stimulate the growth of new business and expansion of existing small and medium businesses.

When asked about such assistance schemes as the one we referenced in the UK the results showed that, worldwide only 19% felt that such special assistance schemes were needed. However it is worth noting that, 48% of Singaporean respondents saw assistance being key, raising the questions of what is Singapore doing differently? Is it a different mindset when it comes to come governmental assistance, seeing this as necessary and welcomed or is there something other countries can learn from their schemes and programmes?

When it comes to the current level of assistance governments provide, the results are clear with 76% of respondents worldwide feeling their respective governments are not doing enough to support them – slightly skewed by lower than average responses from Portugal, Poland and Spain currently deeply embroiled in the Eurozone crisis, but still a large proportion of respondents unhappy with the current situation.  Coupled with almost a third of businesses marking access to capital and funding as one of their least favourite aspects of doing business, increasing slightly from 22% from September 2011.

Digging a little deeper, and when asked what governments should be doing to support small and medium businesses, the top answers were centred on reductions, in both bureaucracy (43%) and business tax (36%), whilst also placing a great deal of value on the opportunities for skills development (31%).  This suggests businesses wan their focus to be on doing what they do best, and reduce the governmental paperwork and prescribed procedure they need to follow to a  minimum and may feel this is a barrier to growing quicker, this is something Simone from Mmmm discusses in our video here and we discussed in our post here

What do you think? Do you seem to spend your time away from customers, and filling in form after form?  What would you change if you had the opportunity?

Increasingly businesses are relying on their own ingenuity and adaptability to continue to grow, 70% have made changes to their businesses, 33% have expanded into new markets or products to increase their revenue opportunities whereas 50% have cut operational costs.  Surprisingly only 22% have had to cut staff numbers, and even more positively 25% of businesses actually increased staffing in the same period. Matched with the confidence businesses feel about their ability to grow and how the last six months have gone for them, we begin to see a much more positive picture; 31% of worldwide respondents have seen their revenue increase, along with 32% seeing their revenue hold steady, giving a majority who have seen no reduction  in revenue.

The Sage Business Index aims to give a snapshot of the business landscape for small and medium businesses across 15 countries we work with.  Do you agree with the results or is there something else you think can drive businesses to be successful?  Or is it as the results suggest, just about letting businesses getting on with what they do best and reduce everything outside of this to as minimal as possible?

The British Chamber of Commerce (BCC) this week announced it expects GDP to expand slightly in the first quarter of this year. This new growth is set to be driven by UK factory output according to the findings. Separate figures from a purchasing managers’ index (PMI) compiled by Markit show a rise to a 10 month high for the manufacturing sector in support of the BCC’s findings.
Meanwhile the OECD figures released last week told a slightly different story, claiming the UK economy would contract in the first three months of 2012 and this is likely due to the OECD polling the non-manufacturing sectors namely the services industry.
What is clear is that UK businesses are looking set to out-manoeuvre the more difficult economic conditions to avoid a “true” double-dip recession. Our own Sage Business Index which recently polled over 10,000 SMEs across 10 countries is testament to this outlook.
This study shows that despite continued uncertainty in the macro global and local economic conditions, attitudes are improving slightly and businesses are still positive about their own prospects over the next six months. Stubborn price pressures particularly in the rise of the cost of fuel will ensure that growth will however remain slow. The biggest overall challenge faced by businesses we polled relates to rising inflation, costs of energy, fuel and raw materials – 50 percent selected this as their number one concern. This is followed by uncertainty and instability in the local markets (35%) and then reduced cashflow in the supply chain (28%).
However there is also evidence that businesses have maintained or increased their revenues in the last 6 months and still show cautious business confidence in their business prospects in the next 6 months, despite a general sentiment that global and local economies are now in decline.
Given the difficulties faced by countries in the Eurozone and continued austerity measures across all geographies, these are still an encouraging set of results.

The World Economic Forum Annual Meeting in Davos has wrapped up and it’s clear that money was uppermost on European governments’ minds – be it the lack of or the need to supply the IMF with more funds to avoid a full scale fiscal subsidence across the Eurozone.

On a positive, the unlimited liquidity provided by the European Central Bank’s three-year long term refinancing operation (LTRO) has reduced pressure on European banks and is widely believed to be helping confidence return.

And it needs to. With the World Economic Forum’s Global Confidence Index indicating confidence in global cooperation has dropped it’s more important than ever that government and business communities work together to deliver this much needed growth.

Lee Howell, Managing Director at the World Economic Forum responsible for the Annual Meeting and the Forum’s Global Risks Report 2012 said: “The latest survey suggests that company leaders and public officials will urgently want to focus in Davos and beyond on job generation and spurring growth.” He added: “Low confidence in governance and high concern about disruption are the making of a slow-burning fuse.”

These are two areas highlighted by the 2011 Sage Business Index. In this report, a significant 78 percent of small businesses polled felt that their governments did not provide sufficient advice and support. At the same time the findings indicated that businesses want to focus on the future with investments plans – a third of which saying they intended to invest in sales and marketing. And while none were planning on reducing the workforce, they were not committing to recruiting.

Meanwhile according to a Bloomberg Global Poll, 48 percent of respondents predicted the U.S. will be among the world’s best-performing markets this year compared with 18 percent who are positive about world growth.

It seems teamwork between industry and governments will hold the key to recovery and it has long had the full support of small businesses worldwide.

While the economy is moving forward, it is not doing so nearly as fast as the small business community worldwide would like but that said, small businesses interviewed for our Sage Business Index report (where we polled a total of 6,455 small businesses in France, Germany, UK, Canada, USA plus more than 7000 in Spain) shows confidence levels are up from same time last year with marginal majorities (53% average) across the board saying the economy is recovering slightly or significantly. Read more

Welcome to the Sage Business Index microsite, created to house the Sage Business Index – International Small Business Insights report. Read more