Small Business Survey Scotland: 2021

This report sets out the findings from the Longitudinal Small Business Survey (LSBS) 2021 for Scotland. It focusses on small and medium-sized enterprises with at least one employee (SME employers). It outlines the key characteristics of SME employers in Scotland and provides an overview of their perceptions on a range of themes including innovation, fair work and access to finance. In addition, the report provides an insight into business performance and outlook.

As at March 2021, there were an estimated 342,125 SMEs operating in Scotland, of which those with employees represented 31 per cent (105,905 enterprises). SMEs with employees accounted for 44 per cent of total Scottish employment and 38 per cent of turnover.

Survey method and reporting

The survey for Scotland is part of a UK-wide large-scale telephone survey of 11,483 owners and managers of SMEs, commissioned by the Department for Business, Energy and Industrial Strategy (BEIS) and was conducted between the 13th September 2021 and the 1st April 2022. The survey is the latest of a series of annual and biennial Small Business Surveys dating back to 2003. From 2015 onwards, the survey introduced a longitudinal tracking element and is now carried out on an annual basis. The longitudinal element of the survey established a ‘panel’ of businesses that might be resurveyed in subsequent years. This is to allow for analysis of how combinations of factors affect business performance over time.

This report provides a snapshot of the state of SMEs with employees (defined as businesses with between one and 249 employees) surveyed in Scotland between September 2021 and April 2022. Enterprises with no employees have been excluded from the dataset on which this report is based. This is consistent with the reporting of the survey from 2015 onwards.

In 2021, 677 SMEs with employees took part in the survey in Scotland. 378 businesses in Scotland had taken part in prior year surveys (“panellists”) and 299 businesses were new to the survey in 2021 (“top ups”). The survey sample is stratified by business size (micro businesses with 1-9 employees, small businesses with 10-49 employees and medium-sized businesses with 50-249 employees) and by sector (defined by Standard Industrial Classification (SIC) 2007).

The data have been weighted to ensure that the results are representative of the overall Scottish SME population. Because of changes in terms of sampling and changes to the questionnaire in 2021, data cannot always be compared with previous editions of the Small Business Survey Scotland.

Table 1: Sample Breakdown by Sector, Longitudinal Small Business Survey 2021, Scotland

In order to reduce the average interview length and therefore boost response rates, three cohorts (A, B and C) were created for the 2021 survey (Table 2). Respondents were randomly assigned to one of the three cohorts and some questions were only asked of one cohort although most questions went to all three cohorts. Throughout the report, it is made clear where questions have been asked to one of the cohorts only or the full sample.

Table 2: Sample Breakdown by Cohort, Longitudinal Small Business Survey 2021, Scotland and UK

Where possible, the report provides results disaggregated by size band (micro, small and medium-sized businesses) and sector and provides comparisons with the UK as a whole and prior year findings. Where comparisons are drawn between sub-groups (e.g. size band), findings are reported in terms of differences between a particular sub-group (e.g. micro firms) and the overall finding (SMEs as a whole). Due to smaller sample sizes for sub-groups, the survey's estimates may be affected by sampling errors and therefore apparent differences of a few percentage points between sub-samples may not reflect real differences in the population. Therefore, sub-group comparisons (e.g. Scotland vs. UK; 2021 results vs. 2020 results; size band; and sector) in the report are displayed only when the difference with the overall finding is statistically significant at 95 per cent confidence level.