DescriptionDespite small businesses playing such a vital part of regional economies, accurate information on their current activities and constraints on future growth is scarce. This tool aims to build a comprehensive picture of the types of small businesses in an area. It encompasses the extent of their integration and satisfaction with the local economy and labour market, and characterises and ranks their main concerns and constraints. Many local and regional economic development initiatives emphasise re-location of large enterprises to boost growth. This tool assists development of structured and realistic measures to remove impediments to growth in the diversity of existing small businesses.
UsesWhat can be done to strengthen the operating environment for our small businesses? What are the gaps in our small business profile? What scope is there for new niche local businesses to replace imports? What are our main infrastructure constraints? What are the main policy issues for local, state and federal governments that are having the greatest impact on our small businesses? What sort of information flows should we improve in order to assist small business growth?
These are the core questions that this tool addresses. The tool builds a number of outcomes including:
a collection of good quality primary information;
easily understood analysis of this information and comparisons with other regions;
immediate strategies for small business development and employment growth.
The tool allows for focus on particular types of small businesses in economic sectors significant in particular regions:
retail for example, is typically one of the largest sectors of employment and growth and may be strengthened with a regional approach to retail planning;
manufacturing can be analysed for potential areas in which critical mass can be strengthened, business networks fostered and export activities extended—both exports outside the region and overseas. Manufacturing can also be analysed to target very small, new, probably home-based manufacturers, primary processors and service providers so as to ensure that business formation is as active as possible, and that as these business grow their energy and employment stays in the region.
How it worksThe tool is built from tightly focused and carefully constructed surveys of businesses in the region. The means of survey can be flexible and can include interview, telephone, or mail. Critical components include the structure of the sample, the extent to which different survey types are integrated and the nature of the questions asked. The critical components of the tool include design of the sample, design of the survey, and the means of conducting the survey.
The scale of the work that can be handled and paid for determines the sample design. The tool can be as small as an approach to a range of predominant retailers in a small town, or as large as a survey of thousands of small businesses in a metropolitan area. While it may be small or large, it should always be representative of the kinds of businesses in the area. We suggest sampling at least four businesses from each of the target business types, to obtain representative views. But the views of 400 would be more revealing. The key is that business people are approached directly, on a narrow range of questions important to the region’s growth.
Survey design must meet the needs of both the researchers and the subjects. The questions must be short, sharp and clear, yet provide the information needed. The surveys must be short enough so as not to inconvenience working people, nor seek confidential information.
The sample and survey influence the types of surveys actually undertaken. Face-to-face interviews take longer, but guarantee strong results. Telephone surveys must be a lot shorter, but are less resource-intensive. Mail-out and mail-back surveys are the cheapest to run, but good response rates requires effort around the area, through media and business and community groups, to encourage people to respond. A good compromise is short surveys that are dropped off and collected the same day. Different types of surveys can be combined—gathering detailed information from a small group backed up by less detail from a bigger group.
PrerequisitesRegions looking at using this tool need to have a rough idea of who is out there—how many businesses, what size, what types, and where they are located. Most areas either already have this information or can draw it from existing sources. The ABS has some useful estimates based on businesses registering with the ATO as group employers.
The second prerequisite is a clear idea of what you need to know. This will help determine if this is the right tool to use, and how it should be applied. There is wealth of material already published about business conditions and business competitiveness which can be used to guide use of this tool, or may already answer the main questions you have.
How to startScanning the scale of the survey work and the main answers is the first step. This may be done in conjunction with business groups, councils or other relevant organisations or individuals in the region.
You will need to marshal the resources you need to use the tool—people across the region who can assist with the survey work, people to help design, collate and analyse the survey, and the funds to drive it.
Strengths This tool’s greatest strength is the quality of the primary data gathered. Information is collected directly from the people who are affected by any programs and policy changes.
With the right questions, the right directions will follow. With a properly constructed sample, some of the answers can be generalised across the whole region to give a picture of emerging skills needs, infrastructure bottlenecks or employment trends. With tight targeting of issues and business types, the suggestions for systematic attention that the tool will generate can be immediately applicable, yielding immediate results.
Weaknesses This tool can be expensive. Gathering good quality primary data is not cheap, and a broad survey of a number of business types in a number of areas will either cost real dollars or real people’s time (and probably both!).
The quality of the output depends very much on the attention given to the design of the sample, the survey and the sampling methodology. Using the tool can be risky if all these elements are not handled well.
WarningsBe prepared for negative reactions from people in the region—comments from the sidelines such as, ‘it’s a waste of time' or, ‘nothing ever gets done’.
Our experience is that the business people approached during these surveys are usually very keen to talk about how they fit in to the local area, and what they would like to see improved. But the outcomes may not fit with the aspirations of some of those on the sidelines.
While the analysis will provide a number of leads for explicit and achievable action, this may not always happen fast enough. Don’t build expectations too high at the outset.
Indicative price/costsTotal costs depend primarily on the scale of the surveys. As a rough guide, for a sample of 10% of 20,000 businesses in a good-sized region we would expect:
at least a week focusing existing data and shaping the sample;
a week developing and testing survey(s);
at least a week preparing interview timetables or mailing list;
at least two weeks collating the responses; and
at least two weeks analysing responses and writing up.
As a guide to data collection costs, apart from survey form design and printing, mail-out surveys will cost a dollar or two to envelope, mail out and return (if pre-paid replies are used and bulk mail-out prices can be used). Telephone surveys will cost around $5-$15 per completed survey call. Around 4-8 interviews can be done a day by one mobile person.
So collecting data from 200 interviews would cost at least $5,000, 500 tele-surveys another $2,500 to $7,500 and 1,000 completed mail-out surveys another $5–10,000 (assuming a 20% response rate).
Funding resource options
Judicious setting of questions and targeting of business types can help weave some different uses into the surveys. This opens the possibility of different agencies jointly funding the work.
Monitoring and performance evaluation
Careful checking of the estimates and assumptions made in setting up the surveys is important, as is checking of the completed survey information. Using the tool periodically will give a very valuable insight into how businesses in the region are responding to a wide range of external pressures.
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