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Inside the Minds of Business Leaders: Report findings

The Study

Sample

A total of 200 business leaders were interviewed by telephone.

The target population was leaders of businesses with a turnover of between £1 million and £10 million, based in London, Hertfordshire, Essex, Norfolk or Cambridgeshire.

Fieldwork was conducted between 25th November – 22nd December 2015.

Interpretation

Where results do not sum to 100%, this may be due to computer rounding, multiple responses, or the exclusion of ‘don’t know’ categories.

Data has not been weighted.

Captains of Industry

At various points we refer to data from Ipsos MORI’s 2015 ‘British Captains of Industry’ study – widely acknowledged as the authoritative source of opinion on Britain's business elite.

We interviewed 102 participants, who are executive-level board directors and chairmen from companies which are:

• Top 500 industrials by turnover; and

• Top 100 financial companies by capital employed.

Fieldwork was conducted September – December 2015.

Our Sample Profile (1)

Cambridgeshire

= 50 (25%)

Norfolk = 50 (25%)

London = 50 (25%)

Hertfordshire / Essex = 50 (25%)

48%

29%

15%

9%£1m to £2.49m

£2.5m to £4.99m

£5m to £7.49m

£7.5m to £10m

Our Sample Profile (2)

Sole owner or shareholder 14%

Majority owner or shareholder 18%

Minority owner or shareholder 20%

Neither owner nor shareholder 42%

25%

24%

16%

7%

7%

6%

6%

6%

5%

2%

Manufacturing / Production

Techology / Other business services

Retail / Consumer goods

Construction / Real estate

Transportation / Travel

Health and wellbeing

Financial / Insurance

Food and hospitality

Not for profit

Telecommunications

Prospects and Confidence

Example of layout

3 in 5 say their business is growing…

Base: All (200). Q7. Which of the following, if any, best describes your company’s present position, in financial terms?

Say their company is

growing

17% say it is growing rapidly

Just 8% say their company is shrinking

61%say their company

is growing in financial terms

58%

62%

60%

64%Norwich

Cambridgeshire

Herts/Essex

London

Example of layout

7

Say their company is

growing

27% think it will stay the same

Just 10% expect it to get worse

This matches the 57% of Captains of Industry who expect business for their own company to improve in the next 12 months

57%expect their

company’s financial position to improve

in the next 12 months

…and 3 in 5 are optimistic about growth prospects

Base: All (200). Q8: Do you think that the financial position of your company will improve, stay the same or get worse over the next 12 months? Base: British Captains of Industry (102) Interviewed Sept – Dec 2015.

48%

60%

58%

62%Norwich

Cambridgeshire

Herts/Essex

London

5749

44

14

27 2733

37

1016

20

40

6 94

10

% Expect to improve in next 12 months% Expect to stay the same% Expect to get worse% Don't know

CountyCompany

Expect to improve 57% 49% 44% 14%

58% among Captains of

Industry

Respondents are bullish about prospects for their own region and the UK, but are downbeat about the EU economy

Base: All (200). Q9a/b/c: And do you think that the general economic condition of your county/the UK/the EU will improve, stay the same or get worse over the next 12 months? Base: British Captains of Industry (102) Interviewed Sept – Dec 2015.

UK EU

49%across the 4 regions

expect their county’s economic condition

to improve

Cambridgeshire business leaders are most optimistic about their county’s economic prospects

Base: All (200).Q9a: And do you think that the general economic condition of the county will improve, stay the same or get worse over the next 12 months?

9

46%

46%

40%

64%Norwich

Cambridgeshire

Herts/Essex

London

Issues and Concerns

15%

14%

13%

11%

11%

15%

Government policy / regulation

Future business / sales / revenue

Market fluctuations /exchange/interest rates

Cash flow / late payments

Recruiting / retaining talent

Nothing

“Staff. Lack of an appropriate skill-base”

1111

“The amount I'm owed. The length of time our customers are taking to pay us” “Health and safety and

getting all the paperwork right”

“Investment decisions for the future. Trying to have some confidence about the trading situation in the future”

What keeps you awake at night?

Base: All (200). Q10. At present, what one issue affecting your business is likely to keep you awake at night? [open end]

Example of layout

1212

30%

25%

19%

11%

10%%

4%

3%

Finding new customers

Finding and retaining the right talent

Dealing with regulation

Setting our strategy for the future of the business

Securing the funds we need to grow the business

Keeping up to date with technological changes

Raising our profile

% Saying issue is of most concern, from prompted list

According to Captains of Industry the most important problems facing large companies are

very similar: finding and retaining talent; regulation; and growth challenges

Leaders are concerned about new business, talent and regulation

Base: All (200). Q11A. And thinking of these same issues, which one, if any, is of most concern to you? Base: British Captains of Industry (102) Interviewed Sept – Dec 2015.

Example of layout

1313

30%

25%

19%

Finding new customers

Finding and retaining the right staff

Dealing with regulation

% Saying issue is of most concern, from prompted list

“Our market is niche and the only way forward is to expand our client base”

“We always need to be finding new customers… If we don't look for new customers, they will just dry up”

“Lots of customers out there we haven't tapped yet. Finding new customers is an issue as we rely on word of mouth”

Securing new business is the number one concern…

Base: All (200). Q11A. And thinking of these same issues, which one, if any, is of most concern to you?

25%

25

19

Finding / retaining the right talent

Finding and retaining the right …

Dealing with regulation

1414

“We are in a retirement and affluent area which doesn't attract the right sort of people who we could have working for us”

“Our business is a person to person business and when we have great staff who move we need to start all over again”

…while recruiting the right people, and then keeping them, is a challenge

% Saying issue is of most concern, from prompted list

Base: All (200). Q11A. And thinking of these same issues, which one, if any, is of most concern to you?

“In our trade you need good staff who know what they're doing. The people who already have these staff won't let them go. They are paying more to keep these staff which is what I would do myself if I was able to find them”

Example of layout

1515

19%

25%

19%

Dealing with regulation

Finding and retaining the right staff

Dealing with regulation

“It is overcomplicated; for a small business it is time consuming, expensive, and you get no help with it”

“We have too many silly EU regulations to deal with”

“I think there is too much red tape, and of course we’re authorised and keeping up [with] the regulation is just too much”

Red tape can be a headache…

Base: All (200). Q11A. And thinking of these same issues, which one, if any, is of most concern to you?

% Saying issue is of most concern, from prompted list

% Strongly agree % Tend to agree

% Neither/nor % Tend to disagree

% Strongly disagree % Don't know

1616

the level of regulation we have

to deal with is having a negative impact

on our business

31

2318

20

8 153% agree

77% of Captains of Industry agree that ‘the level of regulation on UK businesses is harming the UK economy’

…indeed, a majority say regulation is harming their business

Base: All (200). Q14. To what extent do you agree or disagree with each of the following statements: Base: British Captains of Industry (102) Interviewed Sept –Dec 2015.

21

18

19

21

16

7

Example of layout

17

20

22

20

23

161

But interest rates and bank lending are less of a concern

% Strongly agree % Tend to agree

% Neither/nor % Tend to disagree

% Strongly disagree % Don't know

a rise in interest rates would

seriously harm our business

42% agree

the banks make it difficult for

businesses like ours to secure the funds we need to grow

39% agree

Base: All (200). Q14. To what extent do you agree or disagree with each of the following statements:

Planning and Strategy

“This will be when I have finished working and retire”

“The first month we made a profit”

“The day that we got the money in the bank from the trade sale”

“When we achieved our ISO 9001 standard”

“When I changed and closed my old business down and re-opened on the internet”

“When we were able to put money in to pensions”

“The first time I could walk out of the office knowing that our day to day business activities were successfully going

on without me”

“When we paid back our overdraft”

“When I got a million pounds in the bank for the first time”

How leaders identify the ‘tipping point’ of business success

Base: Half the sample (100). Q27. Please describe, in your own words, any one tipping point or defining moment which made you think that your business was a success? [open end]

40%

30%

26%

We have a business plan that we refer back to, and review, regularly

We have a business plan, but do not tend to refer to it in the day-to-day running of the business

We do not have a business plan, we run the business on a day-to-day basis

29

2612

29

311

% Monthly

% Quarterly

% Every six months

% Once a year

% Every few years

% Never reviewed

% Don't know

How often is it reviewed?

7 in 10 have a business plan… and 4 in 10 review it regularly

Base: All (200). Q15. Which of the following statements, if any, best describes how business planning takes place in your company? Base: All who have a business plan (140). Q16. And how regularly, if at all, is your business plan reviewed?

Example of layout

39%

31%

22%

19%

To be acquired by or merge with another

company

To sell the business to an individual or group of

investors

A management buy-out

To leave the business to the owner's family

32% Have an exit planwhich is…

…there is little difference in the prevalence of exit plans between higher (£5-10m) and lower (£1-5m)

turnover businesses

1 in 3 have an exit plan…of these, most plan to sell or merge

Base: All who have an exit plan (64). Q18. And to the best of your knowledge, which of the following statements, if any, describes this exit plan?

Example of layout

62%

43%

28%

25%

Owners have no immediate plans to exit the business

Do not see the need for an exit plan

Owners are too busy focusing on running the business

An exit plan has simply never been mentioned

58%do not

have an exit plan

Because…

Where there is no exit plan, this is most often because owners do not see the need…yet

Base: All who do not have an exit plan (116). Q19. And to the best of your knowledge, which of the following statements, if any, best describe why your business does not have an exit plan?

Example of layout

23

56%

51%

42%

25%

22%

22%

Research online (e.g. Google)

A government body (e.g UK Trade & Industry)

Someone within our business

Our bank

Our accountants

Our insurers

45%55%

Yes No

Do you export?

Who would you turn to for advice?

Nearly half export: they seek advice from the internet, government bodies and colleagues within their business

Base: All (200). Q20. Does your business export any products/services to countries outside the UK? Base: All who export overseas (91). Q22. And who, if anyone, would you turn to for advice on exporting products/services?

The Relationship with Europe

1 in 3 would retain the status quo with Europe, while a similar proportion favour ‘Brexit lite’. Few advocate either closer integration or a complete exit

25

34%

14%

30%

Britain’s relationship with Europe remaining broadly the same as at

present

39% among Captains of Industry

Britain returning to being part of an economic community,

without political links

(‘Brexit lite’)

49% among Captains of Industry

13%

Britain and other member states moving towards

closer political and economic integration

7% among Captains of Industry Britain leaving the

EU altogether

1% among Captains of Industry

Base: All (200). Q12: Which of the following options for Britain’s future role in Europe do you feel would be best for your business? Base: British Captains of Industry (102) Interviewed Sept – Dec 2015.

2626

47

47

28

124

% Very positive impact % Fairly positive impact% Neither positive nor negative impact % Fairly negative impact% Very negative impact % Don't know

‘Would make no difference’ = 47%

(61% among Captains of Industry)

‘Fairly/very negative

impact’ = 40%

34% among Captains of

Industry

‘Fairly/very positive impact’ = 11%

(5% among Captains of Industry)

2 in 5 think Brexit would impact their business for the worse; just 11% say it would be beneficial. For half, it would make no difference

Base: All (200). Q13: If the United Kingdom voted to leave the EU, how positive or negative an impact do you think this would have on your business? Base: British Captains of Industry (102) Interviewed Sept – Dec 2015

“You will have a change in the whole structure with import duties added on. It will push up prices and have a negative affect and push up inflation”

The impact of Brexit, in their own words

Think Brexit would be very positive for their business

“Just to give us the bureaucracy again to be able to look after ourselves… and deal with markets outside the EU in a more competitive manner”

“Because the EU rules which we are suffering from are crippling companies in this country. Specifically, the employment rules”

Think Brexit would be very negative for their business

“Because our export orders would decline. Our customers find it easier dealing with companies in the EU”

Base: All who said the impact of Britain leaving the EU would be very positive (7) or very negative (23) for their business. Q13A. And why do you say this?

At Price Bailey - It’s all about youThe right advice for your business life pricebailey.co.uk

Keith BurnsDirector of Marketing and Business Development, Price Bailey LLPTel: 01279 755 888 Email: keith.burns@pricebailey.co.uk

Matthew PainterDeputy Managing Director, Ipsos MORI Reputation CentreTel: 020 7347 3173Email: matthew.painter@ipsos.com

Dominic DamesickResearch Executive, Ipsos MORI Reputation CentreTel: 020 7347 3183Email: dominic.damesick@ipsos.com

For more information

This work was carried out in accordance with the requirements of the international quality standard for market research, ISO 20252:2012