Yesterday I was lucky enough to be invited to the top of 30 St Mary Axe (aka The Gherkin) to meet the Chief Executive of Sage, Guy Berruyer, and members of the press at a special sneak preview of Sage's fourth Sage Business Index.
The report measures the confidence of nearly 11,000 companies in 15 countries and gives an interesting insight into the pressures and challenges of small businesses worldwide. As a Sage Business Expert I was asked to join a round table discussion on these small business statistics along with two other Sage customers from France and Germany.
The poll took place in September 2012 and 59% of respondents were owners, directors or senior managers, with 48% male and 52% female. Half the businesses surveyed had between 2 and 24 employees and 69% have been operating for 10 years or more with just 3% less than one year old. The businesses were from a range of industries including retail, manufacturing, services and finance.
Because the survey is conducted every six months, trends have been emerging over the last two years. When asked if the global economy is improving or declining, the overall trend is towards the latter. In the UK, however, the perception is that our country's economy has improved in the last six months. Because of this, small British businesses are naturally feeling more confident in their prospects for the coming six months, despite the downbeat global economic climate. Certainly we feel this way at Blue Eyed Sun with our sales on track for strong double digit growth for this financial year. Interestingly in the last six months 34% of UK businesses surveyed actually increased revenues, with 35% staying the same and 26% decreasing.
The Sage Business Index also shows that key concerns for small businesses are over rising costs (energy, fuel and raw materials), uncertainty in the local economic market and decreased consumer confidence. In the UK, reduced cashflow in the supply chain is another key concern. The top three things our SME's feel that the British Government should be doing to help them are reduce business bureaucracy, reduce business tax and pressurise banks to lend more. Health & Safety law is regarded as the most burdensome legislation in the UK by 30% of those interviewed, significantly more than any other country.
Whilst, in some respects, the survey reminds us of some things we already know (the current business environment is challenging) what I found most inspiring about the report and the meeting is how small businesses have been rising to the situations they are faced with. And if I learnt one thing from this latest Sage Business Index it's this: you can't sit and complain or get depressed about the changes that take place around you, you can only adapt to what is happening and find new ways to grow.
To give you three examples from the Sage Customers in the room yesterday. My German counterpart, Mark Fehling, had to take drastic action transform his 25 year old family wholesale and retail business, specialising in electrical components, into a thriving online retailer achieving 30% annual growth over the last 5 years. Claude Carniel had to look abroad and overcome the complexities of exporting his French produce into new territories like Japan, Hong Kong and Singapore in order to avoid stagnating in his own marketplace. Lastly, Blue Eyed Sun has rebranded, launched a new website and added new best selling products in the last twelve months in order to grow. We've also diversified into the wedding stationery market with Ivy Ellen, started distributing to new markets internationally and are even licensing our designs onto gift items in the coming months.
As Sage's Chief Executive, Guy Berruyer, said to me before the meeting started, "In business you have to try things. At Sage we try things and if they work we keep doing them. If they don't work we stop doing them, try to learn from them and move on." I agree with this approach. We must see the situation for what it is and we mustn't be afraid to try things and to experiment with change.
So, whilst the economic mood is still sombre, we can still adapt. We can't control the weather, but we can choose how we respond to it. It is encouraging to see from the Sage Business Index that small businesses are optimistic despite the perceived economic climate. We must take heart and we must take action. What are you doing to improve your business this year?