Gatwick Diamond Initiative Business Barometer Survey Findings Spring 2015

Transcription

1 Gatwick Diamond Initiative Business Barometer Survey Findings Spring BACKGROUND The Business Barometer research study is commissioned by The Gatwick Diamond Initiative (GDI) to help monitor local economic conditions on a regular basis. Conducted by Prowse & Company Ltd, this online survey is designed to source primary data from local businesses to measure how the Gatwick Diamond is performing as a location for business. The survey provides quantitative and qualitative evidence of business trends to aid the Gatwick Diamond Task Groups in their activities. Importantly, the survey offers a snapshot of business confidence in the Gatwick Diamond area. In addition to general business questions, each survey also considers a particular theme. The Spring 2015 survey focuses upon local supply chain issues. A total of 85 responses were received between February and March SUMMARY OF FINDINGS Business confidence and outlook Confidence levels reported by respondents is generally high with 68% of businesses expecting to grow business turnover over the next six months. Conversely, only 2% anticipate a reduction in business turnover. In terms of staffing and recruitment, businesses appear to be gearing up for growth with 60% expecting to increase their staffing levels over the next six months and no businesses planning to contract their staffing levels. There is also growing confidence relating to business costs with 54% of respondents stating that they do not anticipate the need to further consolidate and reduce their business costs over the next six months. Access to finance Despite increasing signs of growth among businesses in the Gatwick Diamond, only 12% have sought external finance to fund that growth. Opinions on the availability of finance appear to be positive. Of those respondents for whom external finance is relevant to their business, 17% found the availability of business finance options to be excellent and a further 56% found it acceptable. Nevertheless, over a quarter of respondents still found the options to be poor. Prowse & Co. Ltd May

2 Business concerns The most commonly cited areas of concern among respondents centred on skills/recruitment of staff, growing the business and economic uncertainty in the run-up to the General Election. Issues relating to loss of office space and employment land to housing development were also raised, as were transport and infrastructure concerns. Local supply chains The study indicates that there is a healthy local supply chain in operation across the Gatwick Diamond area. Almost three quarters of businesses (71%) sell products or services to other local businesses within the Gatwick Diamond. Conversely, 88% of businesses purchase products or services from other Gatwick Diamond companies. 43% of Gatwick Diamond businesses give priority to purchasing from local suppliers. Three quarters (75%) of purchasing businesses take into account social and community impact when deciding whether to buy locally. A further 52% make their decision based on environmental impact. Other important considerations when deciding whether to purchase locally include: cost, quality and lead times. A number of respondents expressed a preference for doing business with someone they know which is easier to do when local. While Gatwick Diamond companies are active in buying locally, the overall value of those purchases appears to be relatively low. Less than 25% of annual purchasing spend is transacted locally (i.e. from Gatwick Diamond suppliers). Factors that seem to stop local businesses buying more locally are mainly related to price and availability of a particular product or service locally. A number of Gatwick Diamond businesses operate in sectors that require specialist suppliers and these are not always part of the local supply chain. For other purchasers, it s a case of insufficient capacity among local suppliers to fulfil orders. Growing the local supply chain Meet the Buyers Just over a quarter (27%) of respondents have attended a Gatwick Diamond Meet the Buyers event in the past. On the whole, their experience had been positive, particularly from a networking point of view. New business gained as a direct result of attending was less evident, however. For a small number of businesses, their expectations had not been met and their attendance at the event had not yielded the results they had hoped. The role of the Gatwick Diamond Initiative The top five areas that respondents would like the Gatwick Diamond Initiative to focus their lobbying efforts on for the year ahead are: 1. Skills/training issues 2. Infrastructure investment 3. Business support 4. Transport 5. Influencing national/regional policy Prowse & Co. Ltd May

3 3. SURVEY FINDINGS A. Profile of Respondents Prowse & Co. Ltd May

4 B. General Business Confidence Prowse & Co. Ltd May

5 C. Local Supply Chains Prowse & Co. Ltd May

6 Supporting verbatim comments Our policy is to prioritise local and sustainable products wherever possible We give priority to local suppliers with ISO 9001 We will use a local supplier unless there are positive cost, quality or logistical reasons why we should not. We look to develop long term strategic partnerships across the supply chain We purchase from local farmers As a local authority we are obliged to get 'value' (tends to be on price and provision). We work to support local businesses and will use them where we can. Where possible I prioritise purchasing from local businesses, often in favour of cost We choose on quality, on-time delivery, partnership and cost We always try to purchase from local suppliers especially for services. With regard to product it is sometimes more cost effective to purchase from a wider field. Yes, where local food provenance is required on menus. A conscious effort is made to procure from local depots where the Head Office or major distribution centre for the product(s) concerned are located elsewhere. Primarily aim to purchase in West Sussex followed by Hampshire / Surrey & then remainder of the South East So long as prices are competitive and there is a willingness to be competitive, the business goes local I believe in supporting local businesses, everyone wants a bargain, but quality counts above that. You will forget the difference in pennies, but you won't forget the bad quality. We will source suppliers wherever we can from Mole Valley and then look in Surrey and Sussex, SE then elsewhere. Yes for services for local trade counters We try to source locally but more importantly we will try and source from companies that are clients of the firm We are a service industry but are required to use other professional services usually in an urgent situation and always use local people for speed and proven reliability Where possible we use local suppliers to provide us with materials, however we work in an environment where the products and services are type approved by the client, thus restricting the use of local suppliers We encourage our budget holders to use businesses that are based in the Gatwick Diamond, providing their costs, quality and customer service meet our requirements We choose on value, timing and quality We operate on very short lead times and so prefer to source locally, but often find it more expensive than other areas of UK / Europe We purchase goods from businesses with premises in the area, not over the Internet No formal policy but I prefer to deal with companies nearby if possible Prowse & Co. Ltd May

7 Other reasons given Importance of local relationships It makes good business sense in some cases We use specialist products that are made by international companies, however whenever possible, we purchase from local wholesalers. Cost On-time delivery and ability to partner in R&D Even with the delights of modern technology it is preferable to be able to meet with people face to face and this is often easier with local suppliers Quality, on-time delivery and cost Simply looking for the best quality supplier we can identify wherever they are based - within reason Price Cost and continuity of supply Right technology Cost/quality advantage to buy locally Cost and reputation of supplier Quality of service and speed of delivery Maintaining contact with Supply Chain; prefer to be able to visit easily. Cost/Price Cost and service levels Finding what we need and getting it quickly We try to buy and work as ethically as possible. We look to see if supplier is a client of the firm The quality and style of local creative product is just not good enough for our customers Quality at a fair price, locally sourced where possible Problems are solved very quickly Specialisms Business continuity - local suppliers can still deliver services during periods of travel disruption. Speed of service - local suppliers can usually get to site quicker than national providers. Has to be realistic in terms of value and service to client Links and business development Service Prowse & Co. Ltd May 2015 Lead time 7

8 Q15. Are there any factors which stop you buying locally? Answered: 48 Skipped: 37 Availability of services. Logistics - if we need something in France, usually a local company will be cheaper and more flexible Specialist parts that aren't manufactured here Availability of products We often buy in partnership with other authorities. Many of our big contracts are specialist. Suppliers need to be set up in our accounting system Availability of products In some cases unable to source products locally and in one case because I dislike the attitude of the particular trader Capacity and quality Volume or capability to meet delivery schedules. Normally have to split suppliers due to their manufacturing capacity Lack of availability of some parts - too long a lead time for some parts will mean we will buy from non-local suppliers Overseas manufacture With three separate regions in which we do business, we look for local/regional supply chains wherever possible. There might be more opportunities to procure locally if buyers were aware of local suppliers/supplier depots. An on-line Gatwick Diamond Suppliers Directory on a category-by-category basis could assist in increasing local supply chains? Lack of knowledge / expertise Price and size of orders Availability and cost Our main supplier is based in Oxford, therefore we only purchase local services and consumables We can only buy what is available. There are not enough big industrial businesses near Gatwick On a like for like product / quality, etc it will usually be cost Obviously it is more expensive in the South East but it is better for us to have local suppliers who you can meet face to face if there are issues Specialised industry specific requirements that cannot be sourced locally Most of my products come from national and international companies who are not local. Books can only come from the book trade If they can supply what I want I will use local suppliers Lack of supply Local artists are just not of sufficient calibre or professional enough to supply us Prowse & Co. Ltd May

9 Q15. Are there any factors which stop you buying locally? (cont) Availability Specialist knowledge Sometimes price Price can be a factor Specific parts are not available locally Stock holding, returns policies Specialisms Our client approves products and services we provide, thus restricting the use of local suppliers Some products that we buy are not manufactured in the local area e.g. laboratory products and raw materials Price Cost Availability of some products / services at service levels and prices needed Price We buy a lot of precision machined parts so sometimes it is not possible to get the expertise in manufacturing these items locally No suppliers of some our main raw materials (plastic CD and DVD cases and Polycarbonate) Prowse & Co. Ltd May

10 Q17 If YES, what was the outcome of your attendance at the event? Answered: 16 Skipped: 69 Positive Used it more to keep in touch with existing customers; more than actual leads, but thoroughly recommend and would not miss Acquired new customers and increased awareness of our services Networked to get new contacts and contracts in place for our office We acquired new customers Very good results We obtained a new customer from the Gatwick Diamond Did not attend as a formal supplier, but did network with other local organisations with a view to developing some projects. We did a small amount of business, but it was very good for networking and exchanging ideas and contacts Made some good contacts, but no business Neutral Colleagues attended, do not know specific outcome Made a few contacts but no business came as a result Advertised jobs through network. We however received no business Negative No great success Totally useless for us... its B2B and not what we need as a retailer Didn't get to see all the potential customers that we had arranged to meet as they left early. Wasn't that impressed Fairly negative - buyers did not follow through interest shown at event, rendering it an experience but of no trading value Prowse & Co. Ltd May

11 D. ACCESS TO FINANCE Prowse & Co. Ltd May

12 E. BUSINESS CONCERNS Q17 What is the most pressing business concern for you currently? Answered: 61 Skipped: 24 National and local policy-related issues General election Uncertainty due to election Political deadlock How the economy is turning around and the impact that may have. We, in Surrey, are in a privileged position where I don't think the recession has hit us any where nearly as hard as other parts of the country. Legislation and red tape Settled politico-economic background Public sector funding cuts, uncertainty of election Tax related legislation The election Currency fluctuations Keeping the economy improving. Absolute lack of any reduction in Red Tape The UK business rate structure that sees most of what little there is not remaining local. The lack of business communication at ground roots level by the local authorities, LEPS, SCC concerning local issues which affect the business wellbeing. Access to (qualified/skilled) staff Non-availability of appropriately qualified staff Finding staff. Talent Workforce skills Finding staff Prowse & Co. Ltd May

13 Lack of qualified employees Managing huge growth and finding staff Quality staff Availability of staff Availability of quality recruits Sourcing the right qualified staff Recruitment of people with the correct skills People at right levels hard to find, for us this means exceptional lawyers and managers Recruiting employees with a good attitude and work ethic Talent Growing the business/finding new customers Growth of the business Marketing and sales Footfall More clients Securing additional new/replacement revenues Internal restructure. Develop facilities Effectiveness and use of resources and systems Changes in trends and technology having an impact on the value of my business To grow Growth Keeping volumes up in a declining market Creating new business Growth Sourcing new markets Income generation A new contract Competition from competitors on fees meaning pressure on margins Capacity and on time delivery Prowse & Co. Ltd May

14 Lack of sales, changes in shopping habits - impact of the internet - the changes in the way people shop and the time one has to now spend on digital marketing which currently on our shop realises just 10% of sales. Retail footfall is seriously down as people check prices on line and then shop to buy specifics or collect Click and Pay items, small High Street shops become showrooms for items bought more competitively elsewhere. No easy answer to this but its destroying commerce as we know it in the High Street Increasing the number of small businesses that work from our business centre Not being able to offer our specific services to Gatwick Airport Employment land The loss of office space in the area to housing Lack of light industrial space More employment land Transport/ Infrastructure Uncertainty over the airport and transport infrastructure Runway expansion in the South East Infrastructure & lack of investment particularly in roads and "Business Quality Broadband" Lack of Airlines carrying cargo into Gatwick. Poor supply of high quality premises locally with good telecommunications connectivity Financial Costs Finance - we are a pre-revenue start-up with an exciting globally relevant product - we need financial support Pressures on our customers to show value for their investment Cost reduction while retaining service quality Prowse & Co. Ltd May

15 F. CONCLUSIONS Other suggested areas for the Gatwick Diamond Initiative to focus on: As a supplier of finance, provided through Coast to Capital LEP, in the funding gap, we have an interest in addressing any funding issues. However, raising awareness of the existence of the funds is an ongoing challenge More factory units. There is nothing over 50,000 sq ft to allow us to grow. We might have to move away Persuade local authorities that cheapest never means best and costs more in the long run! Review of business rate Supporting the expansion of London Gatwick Airport Help in building effective websites, selling on line, using social media better... Contact with the cargo community Loss of commercial land to private development rights Continuing to support the second runway at Gatwick. Promoting the importance of a thriving Gatwick Diamond economy to MP's who are seeking election Prowse & Co. Ltd May