Small business owners have been warned that employee perception of their company is even more important than what customers think, according to new research by Manchester Business School.

The business school found that that firms experience an 18% increase in sales by raising employee opinions above customers'. However, businesses were warned that it is still vital to meet customer expectations to prevent drops in future sales.

"Our study focused on comparing primary measures of reputation to financial data at the level of individual businesses, something which has not been done before. The correlation between what we call the reputation gap and sales performance was clearly evident," said Gary Davies, professor of corporate reputation at Manchester Business School.

"Organisations that ensure they engage with employees to build strong corporate values and improve their views of the business can benefit from growth of up to 18% the following year."