Eight in 10 (79%) small business owners expect to grow their business over the next 12 months – an uplift of thirteen percentage points year-on-year, according to new research from American Express and Small Business Saturday UK. The survey also found the same percentage (79%) believe their business is currently in good shape, (compared to 74% a year ago).
Despite the challenging trading environment that many small businesses still face, almost two thirds (64%) are defying the odds and forecast that business performance in the final quarter of 2023 will be better than the previous two years. Only about one in seven (15%) of those surveyed believe it will be worse.
The annual Barometer survey of 1,000 UK SME owners and decision makers found that collectively over one third (35%) think running a business has become harder over the last year. Inflation is playing its part, with over half (53%) of respondents citing the rising costs of goods, services, and energy as the biggest challenge to running their business in the next six months, along with fixed costs such as business rates and taxes (25%), and labour (23%). Almost six in 10 (57%) respondents believe cashflow challenges have hampered their growth ambitions.
More positively, a significant proportion of SME businesses are taking proactive action to drive growth over the coming months; nearly one third (30%) plan to ramp up sales and marketing activity, a quarter (25%) aim to diversify their product or service offer, and a fifth (20%) will invest in new technology.
Amanda Salt, Vice President, Small & Medium Enterprises, UK Card Services at American Express, said: “While SMEs continue to face a challenging environment, there are real signs of positivity in our research, with an uplift in business owners and leaders feeling confident about the future, along with plans to invest across a number of areas of their operations. Our focus is on backing these businesses and the entrepreneurs that run them – helping them drive growth and succeed in the period ahead.”
The research also looked more broadly at the standing of entrepreneurialism in the UK. Respondents were asked whether they thought people understood the challenges and hard work involved in being a small business owner; responses were divided with 50% agreeing and 30% disagreeing.
However, there was no division when it came to the need for small businesses to be better recognised and supported for their economic and community contributions; over eight in 10 (82%) believe entrepreneurship should be celebrated more, with three quarters (76%) calling for greater support from the Government with measures that encourage small business growth.
When asked who they turn to for business advice and support, over a third (37%) say they seek out fellow business owners and entrepreneurs who have ‘been there and done that’, ahead of other sources such as family, friends and trade associations. Seven in 10 (70%) believe that the challenges of the past three years have made them more resilient as a business leader.
Michelle Ovens, Director of Small Business Saturday UK, added: “It has been another really tough year for small businesses, so it’s great to see the tide starting to turn and businesses regaining confidence. Behind our nation’s 5.5 million small firms are real people who have shown phenomenal bravery, determination, and resilience in the face of all that has been thrown at them in recent years. With over a third saying it is increasingly hard to run a small business, and three quarters feeling there needs to be more recognition of entrepreneurship, we need to support them more than ever, and celebrate their incredible impact on local communities and the wider economy.”
Small Business owners respond to Barometer survey findings
Kaye Sotomi, founder of inclusive hair salon chain Chop Chop London said, “I share the same sentiment as my fellow small business owners – I’m confident and excited about the future but aware that I’ll face hurdles as I continue to grow my business. I, like the survey respondents, will protect my business from rising costs by strategically investing in activities that I know will make a difference to my business including sales and marketing.”
Carl Reader, entrepreneur and small business consultant said, “Small businesses are the backbone of our economy. Most SME owners would agree that their business is like their baby, and it requires a similar level of round-the-clock care and support. Which is why entrepreneurship should be more celebrated in the UK. Whether it’s checking in with friends and family with small businesses or offering discounts to small business owners, we can all play a role in championing our fantastic SME community.”