FSB 2006 survey

Skills, red tape and crime are the main barriers to small business growth

The FSB today launched the largest survey of its kind into the problems small businesses face when trying to grow. “Lifting the Barriers to Growth 2006” is the fourth biennial survey of the FSB’s 195,000 business members.

The survey was analysed by the Universities of Stirling and Strathclyde and reveals that FSB members employ nearly 2 million people. This is further reflected in the fact that more than half the businesses in the survey have increased their workforce in the past two years.

The survey received 18,939 responses and the headline results are that skills, red tape and crime are the main barriers to small business growth.

John Walker, FSB National Policy Chairman said:

“Over 97% of UK businesses have less than 20 employees. Small firms make up over 50% of the private sector workforce, some 13 million workers, and generate over half of the UK’s GDP.

“These problems, which our survey confirms yet again, must therefore be addressed by the Government because our country’s economic health depends on the success of small businesses. We are regularly in touch with the Government to improve the situation for small firms and we look forward to fruitful future developments.

“Regulation, both its volume and complexity, crime and a poorly skilled workforce are issues that we have raised many times before. It is therefore worrying that they are still the main barriers to growth for small firms. It demonstrates that action taken so far has been inadequate. We will therefore call on the Government in our discussions to do more to lift these barriers and open up the way for small businesses to prosper.”

Key areas from the survey are:

Skills

• Finding skilled employees is a major barrier to growth for small firms. A quarter of all businesses reported encountering one or more skills barriers when seeking to recruit new employees (such as literacy, numeracy, technical skills or communication skills).
• Training in small businesses tends to be informal, rather than classroom based.
• There is a need for employees to be skilled in the basics before they commence employment.

Red Tape

• 56% of firms report an increase in time spent on regulation, 27% report no change and less than 1% report a decrease.
• 55% are unhappy about the complexity of legislation, 53% because of the volume and 51% because of the cost of complying with it.
• Regulation causes a great deal of dissatisfaction and this is most strongly felt in the Financial Services and Hospitality trades.
• The longer a company has been trading the more dissatisfied it is with red tape.

Crime

• 57% of small firms have been the victim of at least one crime in the past year.
• Many small firms feel that reporting crimes to the police is unlikely to achieve anything, which is why only 60% do so.
• Respondents felt that an increased police presence, speedier police response times and tougher sentencing were more likely to make an impact on crime against business than local crime prevention or other similar schemes.

Click here to read the Lifting the Barriers to Growth 2006 survey in full.