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Annual Sage Business Index

Sage Business Index finds global business confidence at a three-year high London, United Kingdom Friday 18th October, 2013 - Global business confidence is returning, encouraging a fresh attitude to risk-taking, according to research published today by Sage. Through its annual Business Index, Sage surveyed over 11,000 small and medium sized businesses in 17 countries across the world and found that businesses are now more confident than they have been for three years.

All scores recorded this year were at their highest since the Business Index began in February 2011, suggesting that business confidence is recovering following the worst of the global economic crisis. Businesses were most confident about their own prospects, which scored a global average of 62.01 out of 100, an increase of 5.55 points on last year. The prospects for their country’s economy scored a global average of 48.85, an increase of 6.38 points on last year. While the prospects for the global economy scored a global average of 48.60, an increase of 6.01 points on last year.

The Sage Business Index also found that in the new climate of economic confidence, business decision-makers identified risk-taking as key to growth. Nearly half (47%) of business leaders surveyed described themselves as risk takers, with 73% saying they did so because they feel they need to take risks to succeed. While only 32% of business decision-makers described themselves as risk averse. In a snapshot of international attitudes to entrepreneurial risk-taking, UK businesses described themselves as notably more risk-averse than most, (39% versus 32% globally).

In spite of greater optimism, most businesses feel that banks and governments are behind the curve and are failing to make the most of increased business confidence. Globally more than two-thirds (69%) of businesses agree that banks aren’t doing enough to make funding available to small businesses and a similar proportion (63%) feel that governments need to put more pressure on banks to lend.

Sage Group CEO Guy Berruyer, said: “After years of financial hardship, business confidence is at a three-year high. Businesses around the world are more optimistic about their own prospects. This shows in their willingness to take chances to succeed. However, if businesses are to take advantage on the upsurge of economic confidence, then they need support and access to a wide range of funding sources, as in the US. Our survey found that businesses in the US believe that the start-up and small business community should do the most to support itself rather than looking to government or banks. More should be done to encourage investment in small businesses the world over. I believe that the development and encouragement of more diversified funding sources, such as angel investment, venture capital, peer-to-peer and crowd-funding, should be a priority. Confidence is returning; a lack of support and access to finance now for small businesses could have detrimental effects on a national and international level.”

Due to this perceived lack of support from banks and government, more than half (57%) of businesses agree that they need to look at alternative funding sources. However, while 42% of small businesses feel positive towards peer-to-peer lending and crowd-funding, the majority (53%) feel they do not have enough information about it, while only 4% have already used it.

The Index also found that the biggest challenge for businesses globally was winning new customers. Managing cash flow and attracting and retaining the right employees were ranked the second and third biggest challenges globally. Other challenges noted by businesses included automating and streamlining processes and expanding to new markets or geographies.

More broadly over half (51%) of businesses feel that the responsibility for supporting startups and small businesses falls on governments. In contrast, just 7% think that governments currently do the most to support them. The only country where this trend was reversed was in the US where businesses are more self-sufficient. Unlike every other market surveyed, just 43% of small and medium sized businesses in the US believe that the Government needs to put more pressure on banks to lend to small businesses compared with 63% of all businesses surveyed globally.

Note to editors: As part of the Sage Business Index 2013, Sage interviewed 11,734 decision-makers from small and medium sized businesses in 17 countries, between 31 July and 28 August 2013. The research follows similar studies conducted in 2011 and 2012. All data is available on request.

SUMMARY OF KEY STATISTICS

  • Global confidence at a Business Index record high as businesses’ optimism about own prospects rises 5.5 points on 2012
  • UK businesses are increasingly confident about their own prospects (62.55, up from 58.46 in 2012). Business confidence in the UK is also higher than in all of the Eurozone countries, including France, Portugal, Spain and even Germany.
  • 47% of business leaders describe themselves as ‘risk-takers’, with 73% saying risk is necessary to succeed
  • In Brazil, business decision-makers are more willing to take risk to succeed in business. Over half 56% of Brazilian respondents describe themselves as risk-taking – more than any other market and twice the number who describe themselves as risk-averse 24%.
  • UK businesses describe themselves as among the most risk-averse (39% versus 32% globally). Austrians are the least likely to take risks, with nearly half 48% describing themselves as risk averse.
  • 57% of small businesses agree they need to look to alternative sources of funding but only 42% feel positive about peer-to-peer funding.
  • Banks aren’t doing enough to make funding available to small business, according to 69% of business leaders
  • Governments need to do more to support small businesses, with 63% agreeing they should put greater pressure on banks to lend

For more information on the Sage Business Index 2013 and to view a country by country comparison of the results visit http://businessindex.sage.com/

About Sage

The Sage Group plc is a leading global provider of business management software to small and medium sized companies, creating greater freedom for them to succeed. Sage understands how and why each business is unique. We provide products and services that suit varying needs, are a pleasure to use and are secure and efficient. Formed in 1981, Sage was floated on the London Stock Exchange in 1989 and entered the FTSE 100 in 1999. Sage has over 6 million customers and more than 13,380 employees in 23 countries covering the UK & Ireland, mainland Europe, North America, South Africa, Australia, Asia and Brazil. For further information please visit www.sage.com