Much of Europe remains in recession and 59 per cent small and medium sized companies across the globe are either watching revenues remain static or decrease. In that context you would expect unemployment to be a serious issue.

While it is still a challenge, despite a few exceptions such as Spain where youth unemployment has hit 55 per cent, it seems jobs are being created or maintained. For example, the results from the latest Sage Business Index found in the UK the number of people out of work fell by 37,000 to 2.49 million in the three months to November 2012.

This is in no small part a result of the thousands of SMBs in Europe – which make up 99 per cent of the economy – keeping the job market buoyant. In fact, 82 per cent of businesses have maintained or grown their employee base. Over half (57 per cent) have seen staff levels stay the same and a quarter (25 per cent) have increased their number of employees. Just 15 per cent had laid people off over the six months to October 2012.

The top three countries that have reported most growth in employment are Malasia (40 per cent), Austria (39 per cent) and Brazil (38 per cent). Meanwhile, Spain (26 per cent), Portugal (21 per cent) and Ireland (19 per cent) have laid off most people off.

Globally, a third (33 per cent) of small and medium sized companies say that having a skilled workforce to recruit from is one of the most favourable aspects about their country as a place to do business. Interestingly, this rises in those countries that have experienced most economic woe including Ireland (63 per cent), Spain (42 per cent) and Portugal (39 per cent).

What is even more encouraging is that when asked what they plan to do in the next year, a fifth (20 per cent) of SMBs globally said they would recruit new employees. This rises to 40 per cent in Brazil, 33 per cent in Austria and 27 per cent in Germany. Just five per cent of Spanish, seven per cent of Portuguese and 14 per cent of French small and medium sized companies said they would recruit new employees in the coming year.

As 2013 gets fully underway, it looks like SMBs across the globe are boosting employment levels and keeping people in work. This is vitally important – from an economic and social point of view – and ensures skills can be retained in companies for the recovery.

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?

While every business is unique, there are common threads running through all companies.  One such thread is the drive to be well organised so essentials are dealt with, leaving business owners the time to focus on moving their business forward. 

The challenge is that there is inevitably something that steers business owners away from their priorities – and often this ‘something’ is identified as red tape.

In the 2011 Sage Business Index the role of government featured heavily – over half of small business surveyed put government bureaucracy and legislation as the least favourable aspect to doing business in their country. 

We spoke to Simone Clarkin, just one our 6 million customers throughout the small and medium business sector.  Simone is the owner of Newcastle based deli Mmm… and we asked for her thoughts on the impact red tape.

“There’s a lot of bureaucracy and red tape involved in being a small business and it takes a lot of time out of your day to cope with that.  It does take a lot of time when it would be nice to be spending time actually dealing with customers and looking for new products, rather than spending time doing ‘back room’ stuff.”

Governments have said concerted efforts have been made – and more are planned – to reduce red tape in a drive to help businesses grow.  These commitments include the Canadian ‘Red Tape Action Plan’ and a pledge by UK Business Secretary Vince Cable to scrap hundreds of thousands of regulations. 

The pledges follow research that is consistent in showing the impact bureaucracy can have on business; Canadian Prime Minister Stephen Harper has called excessive regulations and paperwork “a silent killer of jobs”. 

Mirroring this sentiment, the Australian Chamber of Commerce recently released statistics showing that 72% of businesses are spending more on regulation than they were two years ago.  The report says nearly 40% of businesses surveyed take more than 5 hours each week completing regulatory paperwork.

Join the debate #SageBI.

We know from past Sage Indices that credit and funding has always been a challenge for SMBs, entrepreneurs and start-ups. There has been much debate about the role of the Government and banks in working together to help ease the burden for a sector that has long been established as the true growth engine of most developed economies – to little effect.

So in true SMB fashion, small organisations and start-ups have found another way forward. Crowd-sourced funding appears to be the positive fallout of the worldwide crisis. An online initiative called Kickstarter has gained popularity in the US where the original credit crunch began and has experienced such huge success it’s now coming to the UK this autumn.

Since Kickstarter’s 2009 launch it has funded more than 20,000 projects, with several eclipsing the $1m pledge mark; remarkable given today’s harsh credit and venture capital environment. If it does as well in the UK, it may well spread further afield. Indeed a growing number of UK-based companies are already using the site, either by setting up a US company or partnering with an existing one.

This is a welcome development that could help ease the current gridlock of stalled economies across Europe – especially since by their own admission, export sales are incredibly important to the survival and growth potential of many SMBS. If sole traders across Europe hired just one more employee, the impact to GDP and the economic outlook would be significant.

If we look at the latest full Sage Index of September 2011, recruiting employees came way down the list of future planning priorities meanwhile diversifying into new markets made first or second place for all countries polled.

Perhaps there are lessons to be learned from moving away from the traditional when the traditional no longer services your needs and do what entrepreneurs do best – be creative in business.

The Deutsche Börse AG and the Institute for Supply Management this week released the findings of its annual Chicago Business Barometer Report (CBBR). This edition shows business conditions have improved for the 28th consecutive month in the US although there are also signs of a slowdown in the economic recovery – you could say not entirely unexpectedly given the harsh trading environment last year across all geographies. Importantly however the index also points towards US businesses still having a positive outlook in spite of the present global conditions.

If we compare these results with the findings of the 2011 Sage Business Index, US SMBs’ attitudes towards future prospects had already started to improve towards the end of 2011 and while no-one could have accurately predicted the Eurozone crisis; this was still in the context of an overall cautious optimism. Big on the list of future plans then was the idea of investing in the “future”. For SMBs in US, Q4 of 2011 was about investment in sales, marketing; innovation through technology and diversifying into new markets. One US business owner is quoted saying: “Those who are more innovative, adaptable and efficient will survive.”

It would appear the US SMB community is sticking to the plan.

Last year’s respondents from the Sage Business Indices where snapshots of attitudes towards business outlooks were taken first in February and again in September, showed cautious optimism early in the year that only marginally improved by the Autumn. And with the exception of Spain – that marginal improvement was mirrored globally.

Broadly speaking when it came to global economic confidence, the general mood was that global confidence was declining, with the UK and US the least optimistic of all regions. Compare these results with their feelings about local economies and the picture was decidedly mixed. Canada’s SMBs appeared upbeat while the US and most of Europe were much less so. One exception were Germany’s small enterprises – relatively speaking they were positively brimming with confidence and all of this of course pointing to the fact that no-one really knew what to expect.

Another US business owner said it best: “I’m confident there will be a recovery, but it is years down the road”. Wise words indeed.