Entrepreneurs' Survey 2011
Fittingly launched on 23 September at MADE: The Entrepreneur Festival in Sheffield, the Entrepreneurs’ Survey 2011 identifies the issues and opportunities currently facing entrepreneurs in the Yorkshire and Humber region.
The survey was sponsored by YABA, law firm Nabarro and chartered accountants Barber Harrison & Platt.
“Three years ago when the economy turned tail, reducing costs was a good survival strategy,” says YABA Chair, Andrew Burton, in his foreword.
“But going forward, firms are unlikely to grow without more capital. And external informal investors – venture funds and business angels – have much to offer businesses besides injecting new money.”
The survey team interviewed 100 young companies from across the region during July and August 2011, from a range of industry sectors and at varying stages of growth. Views were obtained on a variety of issues, including key opportunities and challenges, technology, growth, international expansion, funding, priorities and the region. The survey report also contains detailed case studies from in-depth interviews with six of the region’s entrepreneurs.
Here are the survey’s key findings:
Challenges and opportunities
- 44 % reported ‘cash flow and funding’ as their biggest challenge
- 23% cited ‘markets and customers’
- 13% said ‘time pressures’
- The need to generate sales and address skills needs, primarily in finance, sales and marketing was also an issue.
Funding and priorities
- 81% have self-financed or used family resources to fund their business
- 75% have not borrowed from a bank
- 86% expect future working capital to come from cash generated internally, with only 13% expecting it to come from banks
- 39% intend to reduce debt in the next year
- Only 7% have received investment from Finance Yorkshire, South Yorkshire Investment Fund and Partnership Investment Finance (the Region’s Government-backed funds for SMEs)
- External equity (15%) comes from private equity and venture capital, including family and friends, with only 1% from angel investors
- Only 8% have made use of Enterprise Investment Scheme relief (EIS)
- None had used the Enterprise Finance Guarantee Scheme
- Of those that have looked for funding in the Region, over half believe there are constraints with access to funding. One third do not know how to go about accessing funding more widely
Growth and opportunities
- 75% with an established business achieved or exceeded projected revenue growth
- 73% are projecting more than 10% growth in the next 12 months and of these 22% in excess of 50 per cent growth
- Key growth strategies include development of new products, technology and innovation (6%), and expansion into export markets (8%). 34% expressed an interest in moving into new markets and export. However, 83% are currently trading in the UK and still see the UK as the best opportunity for growth over the next three years
- 61% of respondents believe that they have opportunities to expand and grow.
Priorities
- Priorities include cost reduction (more than 50%), increased productivity (71%), new products and services (75%) and new markets (70%)
- 6% cited failure of competitors as their main opportunity
- Low priority was ascribed to renegotiating finance and growth by acquisition
Enterprise culture
- Those surveyed were the decision makers, and of these, 65% were aged 35–54 with only 1% aged under 25
- Almost all surveyed were men
- 74% employ fewer than five people; 86% fewer than 10 people
- One third use staff incentives to remunerate staff
- Advice is readily sought from accountants (74%) and less frequently from lawyers (38%)
- 30% intend to use mentors in the next 12 months
