The Steve Stuart Partnership - Corporate Finance Solutions

To get a snapshot of Merseyside’s owner managers and their views of business in general and of corporate finance in particular, we surveyed 900 SMEs 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.

Asked which important issues faced their business, the following cropped up several times:

• HR/recruitment
• interest rates
• foreign competition
• new technology
• foreign currency (euro)

• insurance costs
• regulation

One respondent said the first time he tried to raise some venture capital, in 1998, his manufacturing sector ‘was deemed not interesting enough’. At the second attempt
in 2001 ‘MSIF were very supportive’.

There was the wag who, when asked to name his most important adviser, wrote: ‘My Maserati dealer’. This lucky man said, when asked if would go for venture capital, said:‘Don’t need capital, got loads of the stuff.’ He also suggested that the government could help business
by ‘making it a criminal offence to be a solicitor’.

Almost every respondent said they thought that Liverpool getting the Capital of Culture title for 2008 would be a positive influence on the local economy and many said it would help their business. One comment, however, was not so positive: ‘I have just returned from
Hong Kong; when I arrived back in Liverpool I was disgusted and ashamed to say I am a resident of this city.’ He doesn’t explain why.

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