Economic survey reveals obstacles to small business growth

Jul 19, 2013

Banks' continued reluctance to lend to small businesses, coupled with the bite of public spending cuts, are the two greatest obstacles to growth of small and medium sized enterprises, according to a two-year study of business owners' attitudes.

A team of academics from the University of Lincoln's Business School established a regular online questionnaire to gauge perceptions of the and recovery by SMEs in Lincolnshire and Rutland. It examined the relationship between businesses' perceptions of the economy and their growth .

Owner-managers were encouraged to complete a bi-monthly survey between July 2010 and May 2012, the first two years of the Coalition Government and a period when Britain re-entered recession. Around 100 SMEs took part in the study, called the Lincolnshire and Rutland Economic Snapshot Survey, which was run by Lincoln Business School and supported by the Lincolnshire and Rutland Employment and Skills Board.

Findings have been published in the latest issue of the Journal of Small Business and Enterprise Development.

"Confidence is critical to growth," said Professor David Rae, Director for Enterprise & Innovation in Lincoln Business School at the University of Lincoln, who led the research. "As such, it is important for policymakers to listen to the concerns of owner-managers.

"The results of our survey, albeit a snapshot of one region of England, indicate that the outlook of small business owner-managers is influenced more by immediate trading conditions than national or international economic factors."

He added: "It is evident that the SME sector has been affected disproportionately by two consequences of the economic crisis and the Government's attempts to reduce the Budget deficit: the shortage of available finance and loss of business from the public sector.

"There are measures that can be taken to address these issues. Most significantly, the lack of access to finance remains a major barrier to small , five years after the initial credit crunch. This poses a risk to the UK's prospects of economic recovery which should not be underestimated. Steps can also be taken to support small businesses to develop new revenue streams and business models."

The article 'SME Perceptions of and Responses to the Recession' by Professor David Rae, Dr Liz Price and Veronica Cini is published in the latest issue of the 'Journal of Small Business and Enterprise Development', published by Emerald.

Explore further: Launching a new brand: Is partnering with a popular brand a good idea?

More information: www.emeraldinsight.com/journal… 092532&show=abstract

add to favorites email to friend print save as pdf

Related Stories

Entrepreneurial women needed to create growth and jobs

Nov 01, 2012

When it comes to adopting an entrepreneurial spirit, it's the men who have the edge. Despite European women accounting for over half of the population, they only make up a third of the EU's entrepreneurs, ...

Recommended for you

Professor analyzes role of trade sanctions against Iran

21 hours ago

Israeli Prime Minister Benjamin Netanyahu addressed Congress on Tuesday as about 50 Democratic lawmakers threatened to boycott the address, offering the latest and one of the most clear microcosms of the debate about Iran's ...

Think twice about investing in own company

Mar 04, 2015

Employees whose retirement plan is invested in stock of the company where they work do not pull out money as the firms approach financial distress, a recently released, but yet to be published paper, co-authored ...

When performance comparisons spur risky behavior

Mar 02, 2015

When you're at work, there are two types of people you compete with: People with similar responsibilities at your own company, and rivals with similar duties at other companies. How do those different flavors ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.