While enduring tough economic struggles, UK SMEs are still hoping to grow their headcount by an average of 21% over the next 12 months, according to new research from business energy supplier, Opus Energy.
Despite official figures from the ONS showing a decline in consumer spending throughout much of 2018, entrepreneurs remain optimistic for small business growth. Of over 500 small business owners surveyed, over half (51%) intended to grow their business in terms of people, with some even predicting they’ll increase their workforce by 50%. IT (39%), health (33%) and financial services (28%) were the sectors expecting the most growth.
Even in the worst affected sectors, growth was still predicted. Half (50%) of retailers still expected to grow in 2019, at an average of 19%. 65% of food and beverage producers predicted an average headcount increase of 18% and 69% of manufacturers expected to grow at an average of 14%; despite facing the uncertainty of Brexit and the “death of the high street”.
Younger entrepreneurs were also more ambitious when it came to growing their team, with 18 to 34-year olds expecting a headcount increase of 32%. 35 to 44-year olds expected the next highest growth at 22%, compared with 55 to 64-year olds who predicted growth of just 12%. Interestingly, women were more optimistic about growth opportunities, predicting an average growth of 27%, whereas men averaged 18%.
Nikki Flanders, Opus Energy COO said, “While it’s always encouraging to see optimism amongst the UK’s small business community, the growth predictions may come as a surprise to some, given the current political climate and economic trends.
“However, this is another indication of the resilience of our SME business owners, who are feeling buoyant despite the economic turbulence. Small businesses are on the lookout for new talent and are offering fantastic opportunities for individuals at all stages within their career. Job seekers who are looking to grow their career might find success with a small business that has similarly ambitious plans.”
Considering the initial investment required to start a business, growth ambitions need to come to fruition if SMEs hope to thrive. When asked how they financed their business, 50% of respondents noted they had used their own savings, with 12% investing over £50,000. Most commonly, owners invested between £5,000-£10,000 into their firm (18%). Female entrepreneurs were less likely to use their savings or a bank loan than men, yet more likely to borrow from friends or family, or invest inheritance.
Flanders concluded, “At the end of 2018, British SMEs generated a staggering £2trn combined. These small businesses are essential to economic growth, so as a nation entering the new year, we need to encourage entrepreneurialism.
“By working hard to reduce the barriers and bureaucracy that prevent many SMEs from achieving success, we can play a part in enabling our UK economy to thrive.”