Study of 4,000 small businesses in the UK, Europe and the US shows record numbers increased their revenue in the past year – but there is widespread unease over SME-focused government policies
London, UK (12 September 2016) - An international study published today by specialist global insurer Hiscox reveals a third year of solid growth for small businesses but widespread dissatisfaction with governments over what is seen as a lack of support for SMEs. Just 28% of small business owners and managers consider their government supportive of entrepreneurs. The lowest figure is in France (14%) while in the UK the figure has fallen from 45% to 35% in the past year.
The eighth annual Hiscox DNA of an EntrepreneurReport shows two-thirds of small businesses have increased revenue in the past year. For the first time in many years all six countries demonstrate similar growth rates. Optimism levels are down marginally in all but one country, Germany, but remain high by historic standards. The survey points to further expansion in the year ahead with large numbers of firms reporting growth in their customer base and stronger order books.
Bronek Masojada, Chief Executive Officer at Hiscox, commented: “Our study provides a unique insight into the mood and financial wellbeing of the small business sector and there is a strongly bullish tone to this year’s report. It is notable that small businesses in all the countries covered are now enjoying a positive growth phase, with several indicators pointing to another good year ahead. The findings mirror what we are seeing among our 366,000 small business customers worldwide, who have collectively generated double-digit growth for the two consecutive years. SMEs are the engines of growth and it is vital their interests are taken into account by policy-makers.”
Highlights from this year’s report include:
Majority shrug off Brexit: More than half of UK small firms say Brexit will have no impact on their business, though a significant minority (31%) see it as a negative. Almost as many Spanish firms (29%) are worried about Brexit as British SMEs.
Bank funding in short supply: There is no sign of an easing in credit conditions for smaller companies with 22% saying bank funding has got more difficult to access (up from 19% a year ago). One in six say they use their credit card to help fund the business and one in ten is contemplating turning to crowd sourcing and peer-to-peer lending sites in the coming year.
Growth surge among small businesses: Two-thirds of small businesses report increased revenue. The strongest performances are in the US and Germany (where 70% of firms report revenue growth) but there has been a marked upturn in Spain and France (where 69% and 60% of firms respectively have lifted revenue, up from 62% and 54% the previous year).
Recruitment down but hiring intentions positive: The proportion of firms taking on new staff has fallen from 21% to 13%, and one in ten firms has cut staff levels. But for the year ahead 21% are planning to increase headcount and only 4% expect to reduce staffing.
‘Bigger the better’ effect: The report reveals a widening gulf between the biggest companies and the smallest. More than five out of six firms (85%) with a turnover in excess of £10 million say they have increased revenue, up from 70% the previous year. Conversely, only three out of five firms (61%) with sales of £100,000 or less report revenue growth.
Political instability and lack of government support are key concerns: More than a third of respondents (36%) say political instability is a potential issue for their business. Spanish respondents appear the most concerned, with nearly two-thirds (64%) saying political instability is hurting their business, and more than half of French respondents (54%) agree.
Once again, the report also highlights widespread unease over SME-focused government policies. Only 28% of respondents consider their government to be supportive of entrepreneurs. In the UK, the figure has fallen from 45% to 35% - though the introduction of the National Living Wage and the European referendum may have coloured thinking. More than half (51%) of UK small business owners or managers agree with the statement ‘Our taxation system does not favour someone wanting to set up their own business’, up from 47% a year ago.
Brits say they are the most entrepreneurial: Asked which country ‘has the greatest entrepreneurial spirit’, respondents in five of the six countries put the US top. Only the British beg to differ: they pick themselves.
Cyber-crime a major issue: For the first time in this study, 11% of respondents say they have suffered a cyber-attack while 8% say they do not know whether they have been targeted. Of those who have suffered an attack, 26% say it proved costly, but only one in six (16%) was able to make an insurance claim. Just 8% say they have e-risks insurance.
For further information please contact:
|Lucy Hensher||+44 (0) 20 7448 6619||[email protected]|
|Caroline Cecil||+44 (0) 20 7610 4110||[email protected]|
Notes to editors
About The Hiscox DNA of an Entrepreneur Report
A full copy of TheHiscox DNA of an Entrepreneur Report can be accessed at www.hiscox.co.uk/dnaofanentrepreneur from 12 September 2016.
TheHiscox DNA of an EntrepreneurReport examines the attitudes and behaviours of small business owners annually. Conducted for Hiscox by Research Now, the findings are based on responses from more than 4,000 owners, founders or senior executives in businesses with up to 50 employees (1,000+ respondents each from the UK and the US and 500+ each from France, Germany, the Netherlands and Spain).
The sample was drawn from online panels contacted between 9th May and 6th June 2016. There is a statistical accuracy of +/- 1% to +/- 2% for the whole sample of 4,062 and +/- 2% to +/- 4% for each country’s sample, except for the UK and US where there is a statistical accuracy of +/- 1% to +/- 3%. Some figures may not add up to 100% due to rounding.
About The Hiscox Group
Hiscox is a global specialist insurer, headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Our ambition is to be a respected specialist insurer with a diverse portfolio by product and geography. We believe that building balance between catastrophe-exposed business and less volatile local specialty business gives us opportunities for profitable growth throughout the insurance cycle. It’s a long-standing strategy which in 2015 helped generate gross premiums written of £1,944.2 million and a profit before tax of £216.1 million.
The Hiscox Group employs over 2,200 people in 13 countries, and has customers worldwide. Through the retail businesses in the UK, Europe and the US, we offer a range of specialist insurance for professionals and business customers as well as homeowners. Internationally traded, bigger ticket business and reinsurance is underwritten through Hiscox London Market and Hiscox Re.
Our values define our business, with a focus on people, quality, courage and excellence in execution. We pride ourselves on being true to our word and our award-winning claims service is testament to that. For more information, visit www.hiscoxgroup.com.
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