what do small businesses want from their banks? · pdf filewhat do small businesses want from...

Help for what matters

What do small businesses want from their banks?Enterprise Northern Ireland& Ulster Bank research document

UB report v2.indd 1 12/09/2016 09:20

2 Help for what matters

ENTERPRISE NORTHERN IRELAND AND ULSTER BANK RESEARCH DOCUMENT

Introduction ....................................................................3

Foreword ..........................................................................4

Executive Summary .......................................................5

The Enterprise Northern Ireland Study .....................7

Survey Respondents ......................................................8

Findings Part 1 – The performance of the Northern Ireland economy ..........9

Part 2 – The financial position of businesses ................................15

Part 3 – Interaction with banks ...............22

Conclusion .................................................................... 26

Appendices ....................................................................27

Contents

UB report v2.indd 2 12/09/2016 09:20

3Help for what matters

Introduction

Entrepreneurs, microenterprises and SMEs are actively being encouraged to start up and grow, driving growth in the private sector, and ultimately growth in the Northern Ireland economy. To create that sense of entrepreneurial culture it is critical that barriers which restrict enterprise are removed/reduced, and ensure that there is:

• Appropriate access to business finance • A more positive and supportive business

environment focused on ease of starting up and doing business

• Better and more targeted business support• The right skills and ambitions among individuals

to start up and grow a business

Access to finance is recognised as one of the key barriers to would-be entrepreneurs wishing to start a new business, or to existing business owners wishing to develop and grow, reducing levels of business start-up and limiting expansion.

Enterprise Northern Ireland and Ulster Bank both recognise that research is central to good policy making. In order to ensure that small business

banking services are informed by a robust evidence base, this research provides evidence on what it is that small businesses want from a bank. It explores the relationship small businesses have with their bank, and their perceptions of the type of relationship they would like to have. The study also explores attitudes of small business owners towards the economy and the range of challenges they face, not only in their banking relationships, but in other areas impacting on their survival and growth.

This report presents the findings of a survey conducted by Enterprise Northern Ireland, in association with Ulster Bank, during Spring 2016.

It is hoped that the findings emerging from the research will provide a better understanding of the challenges limiting the growth of the SME sector in Northern Ireland and support a better future for the start-up, micro and small business communities located here.

Introduction

UB report v2.indd 3 12/09/2016 09:20



Foreword

The microenterprise and SME sector1 is hugely important in Northern Ireland, accounting for around 75% of all private sector turnover and employment2. Addressing issues which either prevent or discourage growth in this sector can only have a positive impact on the local economy particularly as the Northern Ireland Executive works to rebalance the economy towards a larger private sector.

Banks play a critical role in supporting the microenterprise and SME sector and in supporting efforts to rebuild the wider economy. This is why it is so important to understand the key elements inherent in the relationship that a microenterprise or small business has with its bank.

The ability to find sufficient start-up and working capital to see a new business successfully move through its initial stages is acknowledged to be one of the biggest barriers facing new small business owners. Restricted access to finance at start-up is known to have a detrimental impact on the longer-term success of a new venture – initial under-capitalisation can limit the performance, size and growth prospects, and threaten the viability of businesses established. Further, access to finance is essential for small businesses wishing to grow, enter new markets or employ additional staff.

Academic literature points to a number of reasons why businesses may find it difficult to access finance from banks to support their entrepreneurial efforts. These are frequently categorised under the headings of ‘supply-side discrimination’ and ‘demand-side reluctance’ and include:

– Demand-side reluctance – for instance, being risk-averse and wanting to avoid increasing financial commitments; a preference for businesses to develop organically, with growth funded through profits; not having sufficient work experience or savings accrued to act as collateral to secure loans; lack of confidence to present their business idea to potential investors; generally-held perceptions that bank charges are too high, that banks penalise small business owners to make up for their own previous lending mistakes, and that lending policies are unsupportive, unhelpful and inflexible, failing to take the needs of small businesses and their own owners into consideration, particularly when problems occurs.

– Supply-side discrimination – for instance, reluctance of banks to fund less-creditworthy business investments; failure to offer suitable forms of start-up funding for specific cohorts of potential small business owners who may require different approaches and attitudes than other would-be entrepreneurs (eg women, young entrepreneurs; home-based businesses; microenterprises); discrimination and stereotyping.

The survey on which this report is based was undertaken in recognition of the fact that the ability of a microenterprise or SME to access finance is hugely dependent on the nature of the relationship it has with its bank. The research therefore provides valuable baseline information on the nature and state of relationships between microenterprises/small businesses and their banks.

1 Defined as a business with between 0 and 249 employees 2 UU SME Centre/FSB (2015). ‘The contribution of small businesses to Northern Ireland’

UB report v2.indd 4 12/09/2016 09:20


Executive Summary

IntroductionEnterprise Northern Ireland, in partnership with Ulster Bank, undertook this study to ascertain the key challenges for microenterprises and SMEs and to determine the support measures, products and services respondents want from their banks to help start, develop and grow their businesses.

The survey was undertaken in Spring 2016, with a total of 229 responses received.

The profile of respondents indicated that 57% of businesses surveyed employ staff, with the majority (52%) employing between 1-9 employees. T h e y represented a broad range of businesses in both manufacturing and services located across Northern Ireland.

Economy and Business Performance The majority of respondent businesses had no strong sense that the economy was performing very well, with 60% believing the Northern Ireland economic performance was bad or indifferent. In fact, 1 in 4 businesses thought the Northern Ireland economy was performing poorly. Respondent businesses were generally more positive about their own performance, although 1 in 4 sole traders responding to the survey rated their current business performance as poor.

In terms of their more detailed performance, business turnover had improved for almost half of businesses during the last year. For the remaining businesses, turnover was either unchanged (36%) or had fallen (17%) over the previous year; labour and production costs had increased for more than 1 in 3 businesses and a sizeable 28% had seen profits fall, most particularly micro/small businesses.

Around half of businesses considered the current financial health of their business as good while 1 in 5 believed it to be bad.

The main problems or barriers identified by respondent businesses were attracting more customers (52%), keeping the costs of doing business down (49%), making time for family and friends (48%), ensuring a good work life balance (41%), managing cash flow and economic uncertainty (38%).

Respondents also indicated concerns around poor sales and the availability of skilled labour.

Interestingly, businesses without staff were much more concerned with issues around family and work/life balances than those with staff.

The amount of debt in the businesses had increased for 23%, or almost 1 in 4 businesses. Debt had remained unchanged for 23% and had decreased for 16%. Some 40% of respondents had no debt in the business.

Access to financeJust over one-third (37%) of businesses had borrowed/tried to borrow over the last 12 months while 63% had not. Those businesses that had borrowed/tried to borrow were more likely to be those in a bad state of financial health – (38% compared to 28% of those in good financial health).

The types of facilities the businesses had borrowed/tried to borrow from were diverse, including a related company, shareholders, family or friends (49%) followed by a bank overdraft facility or credit line (40%). Credit cards and bank loans also featured for 31% of businesses. They were much less likely to have accessed internal funds (9%) or some of the newer forms of lending through crowd sourcing (11%) or peer-to-peer lending (6%).

Respondents reported varying degrees of success depending on the finance type applied for, with only 22% receiving the full amount of a requested bank loan and 9% in part. 48% of respondent businesses found

UB report v2.indd 5 12/09/2016 09:20



the borrowing process ‘difficult’ and 13% reported it as being ‘impossible’ – 39% of businesses described the process as ‘easy’.

27% of businesses plan to use bank finance in order to grow their business over the coming year. A further 15% stated that they would require bank finance to invest in plant and machinery, whilst 11% wanted to invest in people.

Respondent businesses indicated the main factors limiting their ability to secure the funding they needed as including insufficient collateral or guarantee (34%), financing not available (24%) or at too high a price (15%). There were also concerns around reduced control of the business and the impact of media stories about the economy and access to finance.

Banking RelationshipsThe main source of business support identified by SME respondents was another business owner (34%) or family members (25%). Only 1% stated that they would turn to a bank representative for advice or guidance, indicating that banks have some way to go to be considered as a source of support for SME owner-managers.

Although ease of access to finance is the most important support that businesses want from banks, customer service and relationship management are also considered important. Respondents recognise that the relationship between a bank and small business is important, as the strength of the relationship can inform bank’s lending commitments.

When asked how the banks could address the issues for which they have a remit, and could work to make business start-up and growth easier, a number of key themes emerged from the survey results. Most significantly, businesses called for banks to:

• Make finance more available• Adjust to meet the needs of the businesses they

deal with• Get to know the business owner and business

better• Offer access to a network of other small

business owners

The findings also offer insights into how businesses interact with and use banks to support their needs. 36% of businesses are in touch with their bank on a daily/weekly basis however around one third – 32% - indicate that they interact with their bank on less than a quarterly basis. The vast majority – 85% of businesses – use internet banking.

As such, the findings provide a important baseline of information regarding the attitudes of micro/small businesses on the state of the economy, the performance of their business and on the relationship they have with their bank.

UB report v2.indd 6 12/09/2016 09:20


The Enterprise Northern Ireland Study, in association with Ulster Bank

In Spring 2016, Enterprise Northern Ireland, in association with Ulster Bank, embarked upon a study exploring the views of microenterprise and small business owner-managers with a view to uncovering what it is that they want from their relationship with their banks. As well as exploring access to finance issues, the study looked at the wider business banking relationship. The study started, however, by examining attitudes to the economy.

Objectives of the Enterprise Northern Ireland studyTo gain the views of microenterprise/small business owner-managers on:

• The key challenges for microenterprises and SMEs in area such as financial health, economic performance and wider business concerns

• How they interact with banks and view the relationship they have with their bank

This survey has been designed to discover how small businesses interact with banks, and to establish opportunities for going forward. We are also interested in uncovering the key issues facing small businesses and determining what sort of help they need from banks.

MethodologyIn Spring 2016, microenterprises and small businesses who received support from Enterprise Northern Ireland-managed programmes (specifically the Regional Start Initiative, Start Up Loans and the Northern Ireland Small Business Loan Fund) were invited to complete an online survey. The survey was distributed by means of SurveyMonkey. In total, 229 businesses responded to the survey

The survey questions focused on uncovering attitudes towards the economy, attitudes towards current banks and the constituent elements of current banking relationships. In addition, a number of questions relating to the size, sector and time in business were also included in the survey.

UB report v2.indd 7 12/09/2016 09:20



Survey Respondents

The majority of the 229 businesses who responded to the survey were either micro-enterprises with less than 10 employees (53%), or sole traders (28%).

Number of employees in respondents’ business

Employment Size

Sole Trader 28%

Micro Enterprise (<10 employees) 53%

Small Enterprise (10 - 49 employees) 4%

Medium/Large Enterprise (50+ employees) 0%

No employment information 14%

TOTAL 100%

Respondents represent a number of sectors including wholesale/retail, manufacturing and a wide range of services including professional services, IT and others.

Respondents’ business sector

The survey was in three parts:• part one focused on attitudes towards the performance of the Northern

Ireland economy• part two focused on the financial position of businesses participating in

the survey• part three focused on respondents’ attitudes to their current banking

relationship.

(n=229)

UB report v2.indd 8 12/09/2016 09:20


Findings

PART 1: THE PERFORMANCE OF THE NORTHERN IRELAND ECONOMYThe businesses had mixed views around the current performance of the Northern Ireland economy. Overall, there was no strong sense that the economy was performing very well.

Chart 1

While 40%, or 2 in 5 respondents, believed that Northern Ireland’s current economic performance was ‘good’, a similar proportion (37%) thought it was ‘indifferent’ – in other words, just okay (Chart 1). A significant minority, almost 1 in 4, thought that Northern Ireland’s current economic performance was ‘bad’.

CommentA sizeable number of respondents indicated concerns about the state of the economy – 60% considered Northern Ireland’s current economic performance as ‘bad’ or ‘indifferent’.

The micro/small business sector is the backbone of the economy, and its importance is likely to increase in the future, as setting up small businesses will be the route many take if existing private sector companies cannot create sufficient jobs to cater for the contraction of the public sector in Northern Ireland brought about by RPA.

(n=228)

UB report v2.indd 9 12/09/2016 09:20



It is therefore crucial that the concerns of small business owners around the economy are addressed by all with a remit or responsibility for enterprise support and economic development. This will ensure that the necessary conditions are created to help new business start-up and existing businesses to flourish and grow, enabling the private sector to create new employment and grow its existing employment base.

Business PerformanceCompared to the Northern Ireland economy overall, respondents were generally more positive about their own businesses performance (Chart 2). Some 55% of respondents believed that their own business performance was good, compared to 17% who believed their business was currently performing badly.

Chart 2

Those respondents who believed that their business was currently performing badly were much more likely to be sole traders. In fact, almost 1 in 4 sole traders responding to the survey thought that their current business performance was poor.

CommentIt is important that concerns raised by sole traders regarding the performance of their business are taken

(n=226)

UB report v2.indd 10 12/09/2016 09:20


into account. Although they may not have employees, sole trader businesses comprise around 72% of SMEs in Northern Ireland, so they undoubtedly play an increasingly significant role in the economy. For instance, the existence of sole traders increases competition, variety and innovation in the economy.

It is imperative that those with a remit for, or an interest in, rebalancing the economy by rebuilding the private sector must ensure that their policies and practices do enough to support expansion amongst those sole traders who want to make the transition to employing staff, expand their business and sustain their growth.

In terms of the more detailed performance of the businesses (Chart 3):• Around half of responding businesses had seen their turnover increase over the last 12 months while

for the remaining half, turnover was either unchanged (36%) or had fallen (17%) over the year;• Labour and production costs had increased for just over 1 in 3 businesses over the same time;• While profits had improved over the year for 36% of businesses, a sizeable 28% had seen profits fall.

These businesses were most likely to be micro/small businesses;• Only 1 in 5 businesses (20%) had been able to increase the mark up on their goods/services.

Chart 3

(n=224)

UB report v2.indd 11 12/09/2016 09:20



Financial health of the businessAround half of respondents (48%) rated the financial health of their business as ‘good’. However, a sizeable minority of 20%, or 1 in every 5, rated the financial health of their business as ‘bad’ (chart 4).

Chart 4

Business concernsMost pressing business concerns3 (chart 5, overleaf) centre around attracting more customers (52%) and keeping the costs of doing business down (49%), while at the same time making time for family and friends (48%) and ensuring a good work life balance (41%). Managing cash flow is also an important issue (41%). Interestingly, economic uncertainty (38%) also features as a key business concern. Only 17% of respondents indicated that they had no pressing problem.

(n=226)

3 Most pressing concern is assessed as those who ticked ‘1’ and ‘2’ on the scale provided

UB report v2.indd 12 12/09/2016 09:20


Chart 5

The most pressing concern for those businesses without staff is ensuring a good work/life balance, whilst for those with those with staff, the most pressing concern centred on attracting more customers. Making time for family and friends is a pressing concern for businesses with and without staff.

Top 3 Most Pressing Business Concerns4

Businesses Without Staff Businesses With Staff

Ensuring a good work/life balance Attracting more customers

Making time for family and friends Managing cash flow

Keeping the cost of doing business down Making time for family and friends

Table 1 (see Appendix 1) demonstrates the full breakdown of how pressing each potential problem area is considered for the business.

(n=199)

4 Rank=1 for extremely pressing concern

UB report v2.indd 13 12/09/2016 09:20



Respondents were invited to give detailed information on the most pressing problems faced by their business. Responses include:

• “VAT. I used to be on the flat rate but went over the turnover limit, despite this being a very unusual peak, never repeated since. I cannot get on the flat rate scheme now and the VAT is killing my business”. (Wholesale-retail sector; 9-14 employees)

• “My biggest problem is that I can only buy small quantities of raw materials needed to make my products - costs of production are high and this needs to be passed onto the customer who are increasingly reluctant to pay more, especially as there are cheaper alternatives available”. (Craft sector, sole trader)

• “Business is good. However, it requires a lot of attention, which is fine, but the payout for all of the work is not as well as if you worked this hard or this many hours in a normal job. Also a normal job would have a lot more time for the person, better benefits (holidays, sick, etc.). I enjoy business and hate to complain, however there isn’t much support or ‘known’ support where I’m based and it does make it difficult to maintain the business as well as the most important subject, grow the business & make more money”. (Professional services, 3 employees)

• “I must work long hours and overtime to keep business on top. It can be hard finding good staff. Also hard trying to keep management running well and account of everything whilst working long hours with clients”. (Professional services, 4 employees)

• “I’ve had to completely change my business model, which is depressing because it’s no longer what I wished to do/dream job”. (Hospitality sector, sole trader)

• “I’m in tourism, so the political scene as seen by foreign markets is a problem. Also, the rate of Euro against Sterling” (Tourism sector; sole trader)

• “Finding banking facilities is very difficult”. (Exploitation of patent, sole trader)

UB report v2.indd 14 12/09/2016 09:20


PART 2: THE FINANCIAL POSITION OF BUSINESSESAround 2 in every 5 businesses responding to the survey had no debt in their business at the time the research was undertaken (Chart 6).

Debt in the business

Chart 6

Over the last 12 months the amount of debt in the business has increased for 23% or almost 1 in 4 businesses. It has decreased for 16%.

(n=202)

UB report v2.indd 15 12/09/2016 09:20



Chart 7

Just over one-third (37%) of businesses had borrowed/tried to borrow over the last 12 months while 63% had not. Those businesses that had borrowed/tried to borrow were more likely to be those in a bad state of financial health – (38% of those who reported poor financial health had borrowed/tried to borrow versus 28% of those in good financial health).

The types of facilities the businesses had borrowed/tried to borrow from were diverse (chart 7, page 13). They were, however, more likely to have approached a related company, shareholders, family or friends (49%) followed by a bank overdraft facility or credit line (40%). Credit cards also featured for 31% of businesses. They were much less likely to have accessed internal funds (9%) or some of the newer forms of lending through crowd sourcing (11%) or peer-to-peer lending (6%).

Respondents reported varying degrees of success depending on the finance type applied for:• In the case of a bank loan, 22% received the loan amount in full and 9% in part• Trade credit had a higher success rate, with 31% of applications being received in full and 9% in part.• The other external financing options had a much higher success rate with 50% receiving all funding

applied for and 20% receiving it in part. Other external finance referred to include the Enterprise NI Start Up Loan Fund and the Northern Ireland Small Business Loan Fund.

(n=65)

UB report v2.indd 16 12/09/2016 09:20


One respondent stated that they had “... borrowed from an online business lender. Could only receive £1000 of what was needed and that was at a terrible interest rate”. This respondent stated that they had gone down this route “... because the banks are horrific at helping”. (Professional services, 3 employees).

A significant 18% of bank loan applications were refused, or the terms attached to loans offered were deemed by businesses as unacceptable.

Chart 8

The borrowing process was generally viewed as difficult by the majority of businesses responding to the survey (chart 9, overleaf): • 48% of businesses found the process difficult• 13% of businesses actually found the process impossible• for 39% of businesses, the process was considered ‘easy’

(n=45, 33, 44)

UB report v2.indd 17 12/09/2016 09:20



Chart 9

One business owner described their experience seeking start-up funding from a bank, saying: “ I had a bad experience asking for finance from a bank when I started out three years ago - never again! I

would rather go hungry than go through that ordeal again!” (Professional services, 3 employees).

Another respondent stated:“ I know the banks are saying that they are open for business, and that they are lending more to small businesses, but this has not been my experience. I was turned down flat when I asked for a small loan, with no advice or guidance as to how my application or request for money could be improved. It knocked my confidence and would have stalled my dreams of running my own business had not my family stepped in and gave me the money. I found the bank experience very intimidating and demoralising”. (Craft sector, sole trader)

Finance for expansion plansBusinesses were asked to indicate whether, over the coming 12 months, they intended to use bank finance in order to expand (chart 10, overleaf). The majority of businesses, 59% or 3/5ths, stated that they did not plan to use bank finance to expand. However, a sizeable 27% do have expansion plans for which they will need to access bank finance. Some businesses also plan to access bank finance to invest in plant and machinery (15%) and to invest in people (11%). Other areas requiring bank finance include stock and transport needs.

(n=71)

UB report v2.indd 18 12/09/2016 09:20


Chart 10

Some respondents gave further details regarding why they had no plans to attempt to access bank finance over the coming year:• “Will be focusing on keeping my head above water!” (Professional services, 1 employee)• “It’s a waste of time even asking the bank; they don’t want to know”. (Manufacturing, sole trader)• “My bank has refused me for several small loans” (Services, sole trader)

CommentA sizeable 27% of businesses indicate that they have expansion plans for which they will need to access bank finance, including the need to invest in plant and machinery, people, stock and transport needs.

This finding indicates the potential of microenterprises and small businesses to expand and grow if the conditions are right. It is beholden upon everyone with a remit for enterprise support and economic development to ensure that key supportive mechanisms are in place and that entrepreneurs have ready access to them in order to enable them to develop and grow.

(n=196)

UB report v2.indd 19 12/09/2016 09:20



Factors limiting access to finance Around 2 in every 5 businesses believe there are no obstacles that limit them getting the finance needed for their business (chart 11). For those that believe there are limiting factors they are most likely to focus on:

• insufficient collateral or guarantee from the business (34%)• financing for their purposes is not available (24%)• price is too high (15%)

Other issues raised include the extent of personal debt, poor credit history, directors’ attitude to risk

According to one respondent, “I wanted to purchase land to expand business and the funding just isn’t available because I can’t make a good amount of cashflow without expanding but can’t expand without an unavailable mortgage”. (Hospitality, sole trader)

Chart 11

Businesses reported that they are most likely to turn to another business owner (34%) first for advice about their business followed by a family member (25%). They stated that they are least likely to turn to a bank representative (1%) or other financial adviser (5%) (chart 12).

(n=186)

UB report v2.indd 20 12/09/2016 09:20


Chart 12

(n=195)

UB report v2.indd 21 12/09/2016 09:20



PART 3: INTERACTION WITH BANKSBusinesses are split almost equally over their degree of confidence in talking about finance with banks – some 54% are confident in talking with banks about finance while 46% are not.

Confidence approaching banks

Chart 13

What do you want from your bank?Ease of finance is the most important support that businesses want from banks. Customer service and relationship management are also considered important. Businesses are least likely to place having a local presence as their number 1 priority and view Internet banking as more important. Ranked in order of importance, the most important supports that businesses want from banks are:

1. Ease of finance2. Customer service3. Relationship management4. Internet banking5. Competitive products6. Interest rates7. Local presence

(n=194)

UB report v2.indd 22 12/09/2016 09:20


In terms of what businesses would like to see/receive from banks that they are not currently experiencing (chart 14, overleaf), businesses would like to see banks:

1. Making money more available (28%)2. Adjusting to meet the needs of the business (20%)3. Knowing the business owner and business better (16%)4. Offering access to a network of small business owners (16%)

Chart 14

Other responses include:

• “Be able to speak to a person and complete form as hard copy. Do not want to input financial information online”. (Craft sector, sole trader)

• “Be able to speak to someone when i want too without having to wait forever”. (Natural health, sole trader)

• “Loans with the lowest percentage”. (Manufacturing, two employees)• “Free business account - why should we pay for it?” (Services, sole trader)• “Acknowledgement!” (Wholesale/retail, four employees)

(n=190)

UB report v2.indd 23 12/09/2016 09:20



CommentThe survey results show that customer service and relationship management are important to small businesses.

Relationship management provides the opportunity for banks to develop a closer understanding of the business’ needs. However, given some of the comments above, it is clear that some businesses are not receiving satisfactory levels of customer service from their bank, nevermind relationship management.

Moving forward, it is important that banks structure their customer service and relationship management to meet the needs of small businesses rather than the banks.

Around one third of businesses indicated that they interact with their bank on less than a quarterly basis. However, 36% are in touch with their bank daily/weekly (chart 15).

Chart 15

The majority of businesses (85%) use Internet banking (Chart 16).

(n=194)

UB report v2.indd 24 12/09/2016 09:20


Internet banking

Chart 16

These findings demonstrate that businesses recognise the value of the online trade and transactions facilitated by online banking, with 85% of respondents using online banking. This supports other findings within the survey that a local presence is the least valued support that businesses want from banks.

However, with respondents indicating that customer service and relationship management are of prime importance to them, it is difficult to see how these can be delivered if the opportunity to engage with bank staff in branches is removed.

(n=196)

UB report v2.indd 25 12/09/2016 09:20



Conclusion

The need to rebalance and rebuild our economy by strengthening and growing the private sector has been a cornerstone of past and current Programme for Government commitments. Other institutions, such as banks, also have a significant role to play as they have a major influence on our potential for economic growth and recovery.

Access to finance is essential for microenterprises and small businesses if they are to develop, grow and employ staff, and a good relationship with a bank can be a major determinant on its ability to access such finance. Small businesses have struggled to access finance from high street banks since the 2008 credit crunch, with many experiencing difficulties finding the investment needed to start a new business, grow an existing business and create jobs. Banks therefore play an important role in supporting the growth of the private sector in Northern Ireland.

This study has provided an important baseline of information regarding the attitudes of SMEs on the state of the economy, the performance of their

business, on the relationship they have with their bank and the relationship they would like to have in order to start and grow businesses. For instance, although the business respondents overwhelmingly use internet banking facilities, the findings suggest it is important that the banks maintain a regional branch presence in order to ensure they are providing a broad-base from which they can maintain contact with the communities in which they and their business customers are based, and that opportunities for face-to-face contact are not lost in favour of technology.

The key messages coming from the research show that more transparent, diverse and supportive systems and services from the banking sector, as well as a real choice of competitive products and services, are needed in order to help the growth of microenterprises and small businesses, benefiting the future economy of Northern Ireland.

UB report v2.indd 26 12/09/2016 09:20


Appendices

UB report v2.indd 27 12/09/2016 09:20



Table 1 below demonstrates the full breakdown of how pressing each potential problem area is considered for the business.

Table 1: On a scale of 1 to 5, where 1 indicates “extremely pressing” and 5 indicates “not an issue”, please demonstrate below how pressing each potential problem area is for your business?

1 Extremely pressing

2 3 4 5 Not an issue

Attracting more customers

25% 26% 21% 15% 12% 100%

Making time for family and friends

23% 25% 24% 9% 19% 100%

Managing cash flow 22% 19% 32% 18% 9% 100%

Keeping the costs of doing business down

22% 27% 27% 14% 10% 100%

Ensuring a good work/life balance

22% 20% 27% 14% 18% 100%

Poor sales 20% 17% 35% 13% 15% 100%

Availability of skilled staff

17% 13% 19% 15% 36% 100%

Economic uncertainty 16% 22% 36% 13% 13% 100%

Keeping on top of red tape/bureaucracy

14% 21% 33% 12% 21% 100%

Beating the competition 13% 25% 30% 17% 15% 100%

Taking care of employees

10% 14% 19% 14% 44% 100%

No pressing problem 9% 8% 39% 11% 33% 100%

Availability of experienced managers

8% 13% 23% 9% 47% 100%

Appendix One

(n=196)

UB report v2.indd 28 12/09/2016 09:20


ENTERPRISE NORTHERN IRELANDEnterprise Northern Ireland is the representative body for the regional network of Local Enterprise Agencies across Northern Ireland, and as such, is committed to supporting the growth of indigenous, home-grown micro and small businesses. Making up almost 90% of businesses in Northern Ireland, these microenterprises are the backbone of the Northern Ireland economy, the foundation upon which it is built. The LEA network works to improve the economy by helping these businesses start, grow and create jobs through the provision of many successful business development programmes and support interventions.

ULSTER BANKThis report was produced in association with Ulster Bank.

UB report v2.indd 29 12/09/2016 09:20



Notes

UB report v2.indd 30 12/09/2016 09:20

UB report v2.indd 31 12/09/2016 09:20

Help for what matters

Important Information Ulster Bank Limited, Registered in Northern Ireland No. R733. Registered Office: 11–16 Donegall Square East, Belfast, BT1 5UB. Member of The Royal Bank of Scotland Group plc. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, and entered on the Financial Services Register (Registration number 122315). Calls may be recorded.

UB report v2.indd 32 12/09/2016 09:20

what do small businesses want from their banks? · pdf filewhat do small businesses want from...

Documents