International Survey Provides Unique Insight Into Small Business Landscape Across North America & Western Europe

41% of Small Businesses More Confident Than a Year Ago but Hindered By Bureaucracy and Lack of Funding

LONDON, February 23, 2011 - New research published by The Sage Group plc today reveals a
definitive landscape of small businesses' confidence, concerns and challenges
for the year ahead. The Sage Business Index (businessindex.sage.com/)
- International Small Business Insights, which surveyed 6,455 businesses
across the UK, Germany, France, Canada and the USA shows an average of 41% of
companies are feeling more confident about business in the year ahead
compared to the same time last year. German small businesses are the most
confident with 55% stating they are more positive, whilst of the 5 countries
the UK is the least confident, with only 34% of respondents stating they are
more positive. However, this relatively encouraging outlook is countered by,
on average, 19% of businesses who feel less confident than a year ago.
Furthermore, it is in marked contrast to Spanish small businesses, who were
surveyed in parallel*, and who have a very different attitude with only 12%
feeling more confident and 30% saying they feel less confident, with the
remainder seeing either no difference or having no opinion.

The economy and employment

This cautious optimism is reflected in small businesses views'
about economic revival with on average 53% stating that they feel their
country's economy is recovering slightly or significantly. But again,
demonstrating the uncertain nature of the recovery, an average of 26% of
respondents across these 5 countries think their economy is declining
slightly or significantly and in Spain almost half (47%) expressed fear that
their domestic economy is declining significantly. However, there is some
optimism amongst Spanish businesses when it comes to the global economy with
40% feeling optimistic about it recovering slightly in 2011. This echoes the
views of small businesses in their European neighbours, who have similarly
positive views about the global economy whilst US and Canadian businesses are
less positive about the global economic recovery compared to their own.

There is relatively good news for employment with stability
returning - in Germany and France far more businesses surveyed are planning
to recruit than reduce employee numbers and in the other countries those who
plan to reduce numbers are broadly offset by those who plan to recruit.

Hindering factors

Companies are in unanimous agreement about the factors that
restrict them - irrespective of country the least favourable aspect of doing
business is government bureaucracy and legislation. This is a significant
counterweight to the fact that on average 48% of respondents view their
entrepreneurial spirit and business culture as the most favourable thing
about their country as a place to do business. Whereas US and Canadian small
businesses have particularly strong views about government, citing their
handling of economic challenges as the second least favourable aspect of
doing business in these countries, in Western European there is a greater
concern about a lack of access to funding. German, French and UK small
businesses all rate this as the second least favourable aspect about doing
business in their regions.

Consequently all countries surveyed rate a lessening in
bureaucracy and legislation as the number one priority for government in
helping businesses. In each country this is followed by a reduction in
business tax, although in the US reducing national debt is given equal
importance to this. In France and the UK businesses view pressurising banks
to lend more as the third most important priority, in Germany it is reducing
national debt, whilst 26% of Canadian businesses also rate a reduction in
national debt and the creation of special assistance programs to help
start-up businesses as their next biggest needs.

Business challenges and future plans

When it comes to challenges, the findings paint a compelling
picture of businesses across two continents worrying about overheads, costs
and revenues and knowing they have to address expenditure, grow their
business and find new customers. In terms of how these challenges impact
their future plans, reducing expenditure was seen as highest priority by all
(around 50% cited this in each country). This was followed by monitoring
finances more closely and investment in sales and marketing, which was cited
as second or third by all.

From the research two countries emerged as champions of new
product innovation - France and Spain. 36% of French small businesses will
look to launch new products in 2011 and even more in Spain (41%) plan to do
so.

The role of technology

Technology will certainly have a role to play in 2011 for
small businesses across the globe, although there is a degree of reticence by
some small businesses for implementing or investing in new technology and the
picture is mixed across countries surveyed. However, the number one reason
for increased use of technology is to "Help make their business more
efficient" with well over 60% of responses in all cases.

Guy Berruyer, Chief Executive of The Sage Group said: "Our
survey represents the international voice of small businesses, who are a
major source of innovation and skills, contributing significantly to economic
productivity worldwide. They are clearly stating that they have the appetite
and drive to succeed, but whilst confidence appears to be slowly returning
bureaucracy and legislation are holding them back. This, in combination with
a lack of access to funding, is impacting how entrepreneurs feel about doing
business right now. If their concerns can be addressed it will improve the
landscape in which they operate, boost their prospects and the benefits will
be felt by all."

NOTES TO EDITORS:

About Sage

The Sage Group plc is a leading global supplier of business
management software and related products and services, principally for small
to medium-sized enterprises. Formed in 1981, Sage was floated on the London
Stock Exchange in 1989. Sage has 6.3 million customers and 13,400 employees
worldwide. We operate in over 24 countries covering the UK, Europe, North
America, South Africa, Australia, India and China. For further information
please visit www.sage.com.

About The Sage Business Index.

6,455 small businesses were surveyed across Germany, France, UK, Canada
and the USA during a two month period between November and December 2010.
Businesses were asked a range of questions regarding such issues as current
business confidence about both their own market and globally, how they feel
about economic recovery, their country as a place to do business, the role of
Government, what challenges they face as a business in 2011 and and the role
of technology in helping them do business in the future. 76% of respondents
had between 1 and 19 employees.

To download the full report, detailed data, graphics and
country summaries, as well as to read and contribute to our Business Index
blog and view additional content, please visit
www.businessindex.sage.com

*About the Spanish Research

*Sage also conducted separate, in depth research, amongst 7,091 small
businesses in Spain during the same time period. Entitled "Radiografia de la
Pyme", identical questions to those asked in The Sage Business Index research
about business confidence, the economy, business advice and development were
asked in the "Radiografia de la Pyme", and the responses to these have been
included in the International Small Businesses Insights report. The full
Spanish report will be available from mid March at www.sage.es and
www.businessindex.sage.com.

Contact information: For more information on The Sage Business Index - International Business
Insights please contact Ralph Charlton, Ralph.charlton at sage.com or Jennie Whitell, Jennie.whitell at sage.com or call Tel: +44(191)294-3193 . For press information please contact David Vindel, david.vindel at redconsultancy.com or Natalie Homer, Natalie.homer at redconsultancy.com or call Tel: +44(0)207-0256500