According to the latest Vistage SME Confidence Index, UK small business confidence has dropped by 9.7 points from the previous quarter. This marks the seventh consecutive quarter the index has fallen, 17.9 points below the same period last year. Fears about a poor economic outlook have not completely overwhelmed optimism, however. 41% of managing directors and leaders expect their firms’ profitability to increase in the next 12 months.
The quarterly survey from Vistage, world’s largest executive peer-group mentoring organisation, found that while only 5% of businesses think that the economy will improve in the next year, more than half (55%) of leaders and owners believed they would see a rise in revenues in next 12 months.
With economic conditions in the UK persistently uncertain, small business leaders are seeking fresh thinking and strategies to insulate their business and remain focused on growth. The same report found that MBA programmes are not seen as a critical element to business survival. Just over a quarter (26%) of respondents believe that MBAs are valuable or important to their organisation’s success or their own careers, with only 15% having ever undertaken an MBA course.
Geoff Lawrence, Managing Director, Vistage UK said, “In the current economic climate, business leaders must do more to equip themselves with the necessary tools for recessionary conditions. What this survey tells us is that small business owners need practical solutions and clear direction for navigating rough economic headwinds.
“In the past, MBAs were the primary source of externalised guidance for leadership and management skills, and for leaders to expand their networks. However, as many of our members have found, there are far more inexpensive, efficient and more practical alternatives to MBAs where they can learn and apply new insights in real-time that will make a difference to their businesses immediately, such as peer groups”
Independent research about performance through the last major recession of 2008 revealed the effectiveness of peer-group mentoring in adverse conditions. This research showed that Vistage members’ businesses grew 5.8% in that period compared to non-Vistage member companies whose businesses declined by an average 9.2%.