To get a snapshot of Merseyside’s owner managers, their views of business in general and of corporate finance in particular, we surveyed 900 SMEs in early 2004, with a turnover between £0.75m and £10m.
Two of the most striking statistics were that just over half (51%) would sell their business if the right offer came along, even though 59% of the sample said their profits were up on 2003.
And not a single respondent had an independent non-exec director on their board. Not one. Some businesses had a spouse or other family member on the paperwork as a makeweight, but a working non-exec, no.
Very few – 6% – were backed by venture capital, although 39% said they were willing to explore the possibility. 70% were looking for development capital, however, and most of the amounts needed fell into the classic equity gap (£200,000 – £3m). Over a quarter said they were looking to make acquisitions.
To offer a picture of the people who responded, 43% were founders of the business, just over a quarter had bought the business and 16% inherited it. Most had two or three directors on the board, and 48% had between 11 and 50 employees.
The age of the businesses was spread fairly evenly over the last 100-odd years, with the single biggest group (15%) founded in the 1970s; 10% were less than 10 years old (of which only two were post-2000) and 7% were established in the 19th century.
• Why do you run your own business?
“I started my business when I became unemployed and divorced. It was a decision either to build a future or commit suicide.”
• What advice would you give somebody thinking about starting a business?
“Speak to as many people you can who have done the same thing, and learn from their experiences. Work on and not in the business, and focus on what really makes the business perform.”