UK Firms Do Well in European Small Business League

2 May 2002 - Reacte, the first European benchmarking report, compared 1390 small businesses in nine different countries - UK, Austria, Germany, Spain, Greece, Ireland, Italy and Portugal - and measured their performances against each other in key aspects of their businesses. The firms sampled were split between the manufacturing and the service sector.

The report is intended to help small businesses compete more effectively in Europe by allowing them to compare themselves to the best and worst in each category.

The UK scored the highest marks in 20 of the 70 categories.

Report findings include:

* The UK had the highest pre-tax profit margin (relating to turnover) of all nine European countries. Portugal and Spain had the lowest;

* British manufacturers were least likely to go bust because they had sufficient liquid assets to cover their liabilities if creditors called in their debts. Conversely, the UK service sector came last in this category. Overall, German firms came out consistently best in both sectors;

* German companies received the highest number of customer complaints - UK firms had least;

* German workers took the highest number of sick days of all European countries surveyed;

* Italian firms were least likely to send out defective goods;

* UK manufacturers and German service sector companies were most likely to have more new customers than old ones, with Spain and Italy retaining old clients but not attracting new ones.

Nigel Griffiths, the UK minister responsible for small business commented:

"I want to give our millions of small businesses the competitive advantage in Europe, and this report gives them a unique opportunity to do that by comparing themselves to their international competitors.

"The SBS's benchmark scheme provides invaluable help to small companies by giving a no-holds-barred analysis of their strengths and weaknesses and comparing them to similar businesses in the same sector.

"This allows them to boost their productivity and helps to develop their economic growth - as so many companies across Britain who have already taken part in our benchmarking scheme have so successfully done."

Comparing the top 25% of manufacturing and service sector firms across Europe with the bottom 25%, the report came up with some intriguing results, including:

- the bottom 25% of manufacturing firms report double the complaints per customer than the top 25%;
- the top 25% of firms have an average of 12% of their turnover as cash in the bank, whereas the bottom 25% have on average just 1%;
- if their creditors called in their debts tomorrow, 25% of the companies surveyed across Europe would go bust; and
- the bottom 25% of companies surveyed only receive 50% of their supplies on time.

Other results from the report include:

- Spanish manufacturers were weakest when it came to delivering goods on time;

- Employees in UK manufacturing firms had the highest number of reported accidents;

- British manufacturers invested most in staff training in relation to turnover, but were only average in terms of spending per employee. Ireland and Austria came out top.

- Greece and Spain had the highest proportion of graduates working for small firms, with the UK at the lowest level.

- Greek and German firms were most likely to plough their sales turnover back into the company, with British firms the least likely to do so.

- UK manufacturers spent most money on marketing in their sector but, overall, German service sector firms spent the most.

- Germany makes the most money from developing new or innovative projects - UK firms make the least.

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