Small business confidence survey

ECONOMY IS RIPE FOR GROWTH SAY START UPS

Despite a spate of gloomy forecasts coming out of some sectors of the economy, confidence is exceptionally high among start-up companies. A survey conducted by small business experts, Teneric reveals that over 81% of fledgling firms believe that their businesses will see growth in the next twelve months and are optimistic for economic conditions in the year ahead.

87% of small businesses also said they planned to invest in their company over the next twelve months, but lack of funding was highlighted as a barrier to growth by almost 40% of firms. Not surprising given that just over one in ten companies were unsure about where to go to source finance. Just 12% of companies said they would seek a Government grant or loan even though there are many schemes available for SMEs. Instead personal funds and bank loans were the preferred options.

Peter Hale, director of small business advisors Teneric, comments: “Confidence among entrepreneurs is currently very high and this is evident in the findings of our survey. While successive interest rate rises have made the business community somewhat apprehensive; these companies remain firmly committed to growth.

“However the lack of awareness about funding does cause concern and small businesses should ensure they are aware of all resources available to them, particularly through Government-backed schemes.”

The research also looked at the importance of business planning in growing a successful company. 94% of companies surveyed said that a business plan is important for growth. Of these, 70% have developed or updated their plan within the last year, suggesting that business success is certainly aided if not dependent upon an up to date and meaningful business plan.

Peter Hale concludes: “Without clearly defined and realistic targets, which are reviewed on a regular basis, businesses will not achieve their full potential. Although confidence is high among small businesses, this must be matched with strategic planning to reach the ultimate goal of broadening market share and maximising profits.”

Ends

Notes to Editors

For further information contact Peter Hale on 0845 108 0347 or email peter@teneric.co.uk

Below is the breakdown of the results of our small business confidence survey undertaken during September 2004. 404 small business entrepreneurs responded to our online questionnaire during the first two weeks of September 2004.

1. How optimistic are you for the UK economy over next 12 months?
Very optimistic	46	11.95%
Quite optimistic	268	69.61%
Not very optimistic	65	16.88%
Not at all optimistic	6	1.56%
2. Will your business be better or worse off in 12 months?
Better	307	81.22%
Worse	13	3.44%
Same	58	15.34%
3. How important is a business plan for your business?
Very important	277	73.47%
Quite important	76	20.16%
Not very important	22	5.84%
Not at all important	2	0.53%
4. When did you last update your own business plan?
Within the last 6 months	234	61.90%
Within the last year	36	9.52%
Over a year ago	21	5.56%
I don't have a business plan	87	23.02%
5. Are you thinking of investing in your business in the next 12 months?
Very likely	194	52.01%
Quite likely	131	35.12%
Not very likely	37	9.92%
Not all all likely	11	2.95%
6. Where would you go to get financing to fund this investment?
I don't need finance at the moment	63	16.89%
My own/ company funds	120	32.17%
The bank	61	16.35%
Government grants/ loans	45	12.06%
Equity from my house	18	4.83%
Other lender	26	6.97%
Don't know	40	10.72%
7. How would you go about securing this finance ?
I don't need finance at the moment	125	33.51%
Consult a website I know about	11	2.95%
Consult a business advisor	101	27.08%
Work with my bank	80	21.45%
Consult with my mortgage company	12	3.22%
Don't know	44	11.80%
8. What's holding you back from growth?
Lack of funding	132	38.37%
Government red tape	46	13.37%
Lack of investment	50	14.53%
World economy	33	9.59%
Lack of skills/ knowledge	83	24.13%

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