Company Formation 2009 Survey

97% of start up and small businesses are ‘optimistic’ about the future!

The Made Simple Group (MSG), providers of online business solutions to the start up and small business communities, recently invited their customers to participate in their ‘Coping with the Recession’ survey.

Over 850 customers participated in the survey conducted during December 2008.  Given the somewhat bleak circumstances, the results are perhaps, not as one would at first expect.

Recently the CBI reported on a recent survey they undertook of 500 SMEs.  The findings reported that most SMEs expect the first quarter of 09 to be more difficult than the last and that ‘there was little optimism about the imminence of any recovery ‘.

There’s no disputing that times, in reality, are difficult for many – and it’s no longer credible to blame the ‘media frenzy’ – whipping us all up into a self fulfilling prophecy.  However, findings from MSG’s survey definitely erred to the more positive.  This positivity may correlate with the fact that 74% of the businesses surveyed are relatively young businesses (trading for up to 3 years), with 43% having been trading for under a year.   Even so, of the range of participants, 96% were ‘pleased that they had started their business’ – regardless of the climate – with only 7% stating that they were ‘very concerned’ about the future potential for their business. For the significant majority ‘optimistic’ was the plea.

The survey asked participants their views on the pre budget report and whether or not any of the proposed schemes the Government were putting in place to assist small business were likely to have a positive impact on business.

VAT cuts were encouraged by 20% and the delayed increase in corporation tax by 33% – however, unfortunately, 55% of small businesses surveyed felt that; ‘nothing the Government have put forward is going to help’.

The invitation for participants to suggest what they would consider helpful to assisting businesses through these difficult times found that businesses were looking for assistance with grants, HMRC payment support (a 2 year holiday on corporation tax was suggested!), and the Government taking a stance on enforcing payment terms.

The latter, enforcing payment terms, was echoed throughout the findings from the question ‘What are the three biggest challenges for your small business?  With 815 participants responding to this question, the theme of ‘managing cash flow’ ran throughout the majority of answers.  The three challenges were clearly: 1) Managing cash-flow; getting people to pay on time, debtors and credit control was clearly a dominant element – as was 2) marketing; visibility, getting new customers, retaining new customers, whilst keeping marketing costs manageable – and 3) financial management; access to funding, vat, tax and keeping accurate accounts.

It was no surprise that in today’s break neck, technology enabled business environment ‘time’ was constantly mentioned as a key challenge for small businesses.  With comments relating to; having the time to keep a pace with technology and business development matters, time management, finding time to run the business, manage the debtors and keep new business coming in – it was evident that, for many small business owners, there just aren’t enough hours in the day.