Small business owners in the UK are gaining confidence regarding potential business growth – despite continuing challenging economic conditions; according to new research from American Express and Small Business Saturday.
Seventy-nine per cent of small business owners expect to grow their business over the next 12 months – an increase of thirteen per cent since last year. American Express also found the same percentage believe their business is currently in good shape, compared to 74 per cent a year ago.
Despite the challenging trading environment, 64 per cent forecast that business performance in the final quarter of 2023 will be better than the previous two years. Only 15 per cent of surveyees believe it will be worse.
The annual American Express barometer survey of 1,000 UK SME decision-makers found that 35 per cent think running a business has become harder over the last year. Inflation continues to impact a large proportion of small businesses as 53 per cent of respondents cited the rising costs of goods, services, and energy as the biggest challenge to running their business in the next six months.
Fixed costs such as business rates and taxes (25 per cent), and labour (23 per cent) were identified as other significant challenges. Meanwhile, 57 per cent of respondents believe cashflow challenges have hampered their growth ambitions.
“Uplift” in small business owner confidence
Despite concerns about challenges, a significant proportion of SME businesses are taking proactive action to drive growth over the coming months. Thirty per cent plan to ramp up sales and marketing activity, while 25 per cent aim to diversify their product or service offer. Another 20 per cent revealed plans to invest in new technology.
Amanda Salt, vice president of small and medium enterprises and 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.”
Eighty-two per cent of SME owners and decision-makers in the UK believe that small businesses need to be better recognised and supported for their economic and community contributions.
Eighty-two per cent of all respondents believe entrepreneurship should be celebrated more, with 76 per cent even calling for enhanced support from the government; suggesting introducing new measures that encourage small business growth.