Entrepreneurial Business: the state and status of global SMEs

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  • Because of the important contribution that entrepreneurs make to economic growth,and by virtue of their role as innovators and drivers of employment, business owners worldwide to obtain a snapshot ‘state of thenation’ picture of the SME sector. In order to take the pulse of entrepreneurial spiritworldwide Regus asked business owners about their companies’ performance,their professional worries, whether the support they are getting from governmentsis a case of “too-little too-late”, and what the personal toll is in terms of stress thatthey are subject to, as they develop and manage their businesses in the currenteconomical climate.
  • The largest economy in the world, once icon and foundation of naked entrepreneurialcapitalism, the USA reveals a disappointing net -9% of entrepreneurial firms reportingprofit growth and flat net revenue growth. With news that 59% of small businesses inthe USA finding credit unavailable, with half having actually been declined, it is easyto conclude that lack of access to credit is at least one reason USA entrepreneursare struggling behind many of their peers globally where institutions and governmentsmay have enforced better support of the segment13
  • Nevertheless Chinese SMEs struggle with access to credit and lending remains politically driven to favour state-owned organisations. To help SMEs the Chinese Banking Regulatory Commission announced in September 2009 that a total of 17 banks had established institutions specialisingin SMEs.Later in 2009, the government declared it would increase procurements from SMEs and grant one year breaks on tax and social security obligations in 2010.The downturn hit Chinese SMEs particularly hard with 20% of Chinese SMEs going bankrupt in March 2009.
  • Spanish (91%) and Mexican (83%) companies are particularly disillusioned with their government rating them as very poor
  • In India in particular the government, theReserve Bank of India and Public Sector Banks have taken a number of measuresto provide SMEs with stimuli ranging from extending the loan limit under the CreditGuarantee Scheme, increasing guarantee cover, creating an advisory to CentralPublic Sector Enterprises to ensure prompt payment of bills and a reduction ofinterest rates for micro enterprise borrowing17. A third of Chinese companies alsoappear optimistic about government intervention.
  • In Mexico and South Africa this issue is particularly pronounced with fully 75% and 72% of respondents respectively agreeing this is the case.
  • Cash flow problems are the most likely cause of small business failures, the majority of which occur in their first 18 months of trading
  • This is despite the fact that entrepreneurial SMEperformance has only just stabilised, with revenues up 6%, but profits flat.
  • Moreover, SMEs are considerably more advanced than their larger counterparts in their attitude to flexible working practices and locations for employees, and just as positiveabout hiring working mothers.Over half (54%) of entrepreneurs declare that part time mothersare valuable to them as they bring skills and experiencenot otherwise available.
  • – such as non-standard working hours,
  • Entrepreneurs are taking destiny into their own hands Investment in part time mothers and flexible working arrangements (flexi-time, tele-working etc) attracts the best talent and allows for rapid and elastic expansionReduction in their asset costs particularly those associated to unused or underused office space and expensive property leases
  • Entrepreneurial Business: the state and status of global SMEs

    1. 1. Entrepreneurial BusinessThe state and status<br />Of global SME’s<br />1100 locations | 500 cities | 85 countries<br />Presented by: Name | Date: Date<br />
    2. 2. Overview<br />Is entrepreneurialism vital to your economy?<br />How well is entrepreneurial business being fostered and supported?<br />How does this affect overall economic development? <br />How important are entrepreneurialSMEs across the globe?<br />
    3. 3. Global Report<br />Regushas polled the opinions of:<br />10,000business respondents<br />5,600 business owners<br />Spanning 78countries<br />To obtain a snapshot of the global SME sector<br />
    4. 4. How do we recognise entrepreneurialism?<br />Company size definition:<br />Small business= 1 to 49employees<br />Medium business= 50 to 249employees<br />Large business= 250+employees<br />Entrepreneurs = respondentsowning a substantial shareholdingin their firm<br />
    5. 5. European snapshot<br />In Europe, entrepreneurs make a fundamental contribution to all member economies, employing around 66% of the EU population <br />Entrepreneurs account for around 50% of company turnover in Western Economies<br />
    6. 6. Focus on the US<br />A reported 22 million SMEs represent 50% of GDP, 67% of export volume and 67% of employment<br />The US reveals a disappointing net -9% of entrepreneurial firms reporting profit growth and flat net revenue growth<br />50% of small businesses inthe USA have been declined credit<br />
    7. 7. China<br />China SMEs contribute to around:<br />59% of GDP <br />50% of tax revenues <br />68% of trade revenues <br />75% of urban employment <br />
    8. 8. A look at the Rest of world<br />
    9. 9. Entrepreneurial economic performance<br />In India, 36%net of entrepreneurs experienced revenue growth<br />
    10. 10. Increasing Staff – the Positive Indicator<br />In China, 67%net of entrepreneurial companies plan to add staff<br />
    11. 11. The Entrepreneurial Environment<br />
    12. 12. Supporting SMEs – What is Needed?<br />
    13. 13. Smaller businesses feel ignored<br />Entrepreneurs feel ignored by government and ignored by the press<br />75% of entrepreneurs<br />feel that the interests of small and medium-sized enterprises are typically overlooked<br />by governments<br />
    14. 14. Pressure on banks to lend important<br />74% of entrepreneurs declare that banks should lend more to entrepreneurs<br />
    15. 15. Unable to access credit<br />Priority areas for entrepreneur support:<br />Dedicated government-backed venture capital funds (86%)<br />Effective pressure on the banks to lend to smaller businesses (74%)<br />Enforceable legal penalties for late payment (72%)<br />
    16. 16. Setting up business becoming more difficult<br />59% of entrepreneurs revealed that it has become more difficult to launch a business in the past few years<br />
    17. 17. Legal penalties for late payment<br />72% of entrepreneurs declared that legal penalties should be introduced for late payment of invoices <br />Cash flow problems are the most likely cause of small business failures<br />
    18. 18. Entrepreneur’s hire more staff<br />Entrepreneurs are nevertheless investing in growth, with 40% intending to hire new staff over the next six months<br />A higher proportion than larger businesses (36%) <br />
    19. 19. Positive about hiring working mothers<br />36% of entrepreneurs,(the same proportion as all businesses globally), declaring that they plan to hire working mums in the next two years.<br />
    20. 20. Better attitude towards flexible working<br />Interestingly, entrepreneurs are just as enthusiastic as larger corporations about flexible working practices<br />Globally, 76%of entrepreneurial<br />businesses offer flexible working<br />
    21. 21. Better attitude towards working location<br />In fact a greater proportion of entrepreneurial businesses (76%) offer flexibility over work location, compared to corporates (66%)<br />
    22. 22. Stress and Professional Concerns<br />46% of entrepreneurs report rising stress levels in 2010<br />
    23. 23. Causes of stress<br />The top three causes of stress are:<br />1 - ‘falling revenues/profits’ <br />2 - ‘lack of working capital to invest in the upturn’<br />3 - ‘late payment’<br />
    24. 24. Conclusion<br />Is entrepreneurialism vital to your economy?<br />How well is entrepreneurial business being fostered and supported?<br />How does this affect overall economic development? <br />How important are entrepreneurialSMEs across the globe?<br />

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