SPS Business Survey reveals optimism, but with some underlying concerns.
An online business survey conducted by SPS in February 2008 revealed a broadly
optimistic picture for South East businesses for the year ahead with 27% of companies
expecting this year to be better than last year, while 20% expect it to be worse,
the remaining 53% expecting no change.
A more detailed analysis however reveals some contradictions that may point to
a less rosy picture.
Commenting on the results Paul Chapman from SPS said
“Two aspects in particular made us think that some companies may be over optimistic
about the future and may need to review their plans:
- Increasing market share was identified as the biggest opportunity for expansion this year by 62% of respondents. However at the same time 57% of companies rated their sales functions as ‘fair’ and 43% said it needed improvement. Only 13% rated their marketing function as ‘good’.
- There is a clear contradiction here in that companies are expecting to increase market share while their marketing and sales functions are viewed as underperforming!
- 87% of respondents stated that they have sufficient management skills, but only 29% plan and monitor their plans well and only 13% of companies described their management team as ‘good’. Additionally business owners were not confident that they could rely on staff to drive the business.
- This is a complex issue for all small and medium size businesses. SPS strongly believe that all companies, whatever their size, must have “access to the right management skills” as a very high priority
We conclude that a number of companies are not as well placed as they need
to be to either maximise opportunities or withstand pressures that come with the
less certain economic outlook.
Directors of all companies need to look critically at their organisation – at
least annually - and see how they could improve their business effectiveness.
A good management team and an effective marketing and sales function has to be
the goal of any company who aspires to greater success”
Survey Highlights
47% of businesses were happy with their performance in 2007 v 20% who were unhappy
27% of businesses expect business to be better in 2008, compared to 20% who expect
a worse year and 53% who expect no change
The top 3 business opportunities identified by respondents were:
- Increasing their share of the market in their current market sector
- Driving expansion based on recruiting new skills and expertise into the business
- Improving the strategic planning of their company
The top 5 operational issues facing companies were:
- Increased competition
- business owners have to drive success – they can’t rely on subordinates to do this
- Pressure on pricing
- Sales teams performing below requirements
- Business owners are working unsustainable hours
Operational Effectiveness
The percentages of respondents rating themselves as ‘good’ in operational areas
were:
Management Team - 13%
Marketing - 13%
Sales - 0%
Product / Service delivery - 38%
Customer Service - 50%
- Even allowing for some natural modesty this response highlights cause
for concern and suggests that some companies need to ‘raise their game’ in order
to be successful
Financial Health
50% of companies believe that they have sufficient working capital
37% of companies have sufficient working capital but would struggle in an economic
downturn and 12% of respondents have ongoing issues with capital
Planning for the future
Only 29% of companies have a business and operational plan that they review regularly
– 42% of businesses say that they have a plan – but they do not monitor and review
it
87% of respondents believe that they have sufficient skills in house to plan
and take important decisions